Geely Automobile Holdings Ltd reports 126% Net Income growth and 78.3% Revenue growth
22/03/2017 • About Geely Automobile Holdings Ltd (
$175) • By InTwits
Geely Automobile Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Geely Automobile Holdings Ltd is a fast growth stock: FY2016 revenue growth was 78.3%, 5 year revenue CAGR was 20.7% at FY2016 ROIC 22.6%
- Geely Automobile Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's in pair with industry average of 5.5%.
- CAPEX is quite volatile: 894 in FY2016, 989 in FY2015, 1,338 in FY2014, 424 in FY2013, 220 in FY2012
- The company has highly profitable business model: ROIC is at 22.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Geely Automobile Holdings Ltd ($175) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 24,628 | 28,708 | 21,738 | 30,138 | 53,722 | 78.3% |
| Gross Profit | 4,559 | 5,766 | 3,963 | 5,471 | 9,842 | 79.9% |
| SG&A | 2,802 | 3,387 | 3,023 | 3,744 | 5,063 | 35.2% |
| EBITDA | 3,584 | 4,526 | 3,462 | 4,346 | 7,280 | 67.5% |
| Net Income | 2,040 | 2,663 | 1,431 | 2,261 | 5,112 | 126.2% |
Balance Sheet
|
|---|
| Cash | 4,189 | 5,478 | 7,203 | 9,167 | 15,045 | 64.1% |
| Short Term Debt | 2,289 | 1,610 | 1,057 | 72 | 274 | 282.3% |
| Long Term Debt | 1,374 | 0 | 1,820 | 1,929 | 2,068 | 7.2% |
Cash flow
|
|---|
| Capex | 1,105 | 1,121 | 1,076 | 1,603 | 589 | -63.3% |
Ratios
|
|---|
| Revenue growth | 17.5% | 16.6% | -24.3% | 38.6% | 78.3% | |
| EBITDA growth | 18.6% | 26.3% | -23.5% | 25.5% | 67.5% | |
| Gross Margin | 18.5% | 20.1% | 18.2% | 18.2% | 18.3% | 0.2% |
| EBITDA Margin | 14.6% | 15.8% | 15.9% | 14.4% | 13.6% | -0.9% |
| Net Income Margin | 8.3% | 9.3% | 6.6% | 7.5% | 9.5% | 2.0% |
| SG&A, % of revenue | 11.4% | 11.8% | 13.9% | 12.4% | 9.4% | -3.0% |
| CAPEX, % of revenue | 4.5% | 3.9% | 5.0% | 5.3% | 1.1% | -4.2% |
| ROIC | 16.2% | 19.6% | 13.4% | 15.0% | 22.6% | 7.6% |
| ROE | 18.2% | 18.4% | 8.6% | 12.3% | 23.3% | 11.0% |
| Net Debt/EBITDA | -0.1x | -0.9x | -1.2x | -1.6x | -1.7x | -0.1x |
Revenue and profitability
The company's Revenue jumped on 78.3%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.87 pp from 14.4% to 13.6% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased on 3.0 pp from 12.4% to 9.4% in FY2016.
Net Income marign increased on 2.0 pp from 7.5% to 9.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 1.1%. The company showed decline in CAPEX/Revenue of 2.8 pp from 3.9% in FY2013 to 1.1% in FY2016. It's average CAPEX/Revenue for the last three years was 3.8%.
Return on investment
The company operates at high and attractive ROIC (22.56%) and ROE (23.26%). ROIC increased on 7.6 pp from 15.0% to 22.6% in FY2016. ROE jumped on 11.0 pp from 12.3% to 23.3% in FY2016.
Leverage (Debt)
Debt level is -1.7x Net Debt / EBITDA and 0.3x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from -1.6x to -1.7x in FY2016. Debt jumped on 17.1% while cash jumped on 64.1%.
Management team
Gui Sheng Yue is a Geely Automobile Holdings Ltd's CEO. Gui Sheng Yue has spent 12 years at the company.
Appendix 1: Peers in Auto Manufacturers
Below we provide Geely Automobile Holdings Ltd benchmarking against other companies in Auto Manufacturers industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -95.4% | 511.9% | 123.0% | 52.3% | |
| Byd Co Ltd ($1211) | -4.2% | 16.4% | 7.2% | 40.2% | |
| Guangzhou Automobile Group Co Ltd ($2238) | 18.0% | 45.2% | 18.9% | 31.4% | |
| Great Wall Motor Co Ltd ($2333) | 43.1% | 31.7% | 10.2% | 21.3% | |
| Wuling Motors Holdings Ltd ($305) | 8.7% | 1.5% | 0.8% | 10.8% | |
| |
|---|
| Median (9 companies) | -6.2% | 9.0% | 7.9% | 10.8% | 3.7% |
|---|
| Geely Automobile Holdings Ltd ($175) | | 16.6% | -24.3% | 38.6% | 78.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Wall Motor Co Ltd ($2333) | 24.1% | 25.9% | 25.0% | 22.3% | |
| Qingling Motors Co Ltd ($1122) | 12.3% | 15.2% | 15.1% | 18.7% | |
| Sinotruk Hong Kong Ltd ($3808) | 14.9% | 16.7% | 16.9% | 17.8% | |
| Byd Co Ltd ($1211) | 11.6% | 13.4% | 13.8% | 15.3% | |
| Dongfeng Motor Group Co Ltd ($489) | 5.8% | 12.6% | 13.0% | 13.4% | |
| |
|---|
| Median (9 companies) | 11.7% | 12.6% | 13.0% | 13.4% | 11.8% |
|---|
| Geely Automobile Holdings Ltd ($175) | 18.5% | 20.1% | 18.2% | 18.2% | 18.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Wall Motor Co Ltd ($2333) | 18.0% | 19.5% | 17.8% | 15.5% | |
| Byd Co Ltd ($1211) | 10.2% | 9.6% | 12.0% | 14.2% | |
| Qingling Motors Co Ltd ($1122) | 10.3% | 12.8% | 11.4% | 12.2% | |
| Sinotruk Hong Kong Ltd ($3808) | 6.6% | 7.4% | 7.8% | 7.5% | |
| Guangzhou Automobile Group Co Ltd ($2238) | -5.9% | -1.5% | 1.4% | 4.8% | |
| |
|---|
| Median (9 companies) | 4.7% | 4.6% | 4.2% | 4.8% | 3.5% |
|---|
| Geely Automobile Holdings Ltd ($175) | 14.6% | 15.8% | 15.9% | 14.4% | 13.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 22.7% | 10.1% | 15.7% | 14.7% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 8.9% | 10.1% | 13.4% | 12.5% | |
| Great Wall Motor Co Ltd ($2333) | 10.7% | 13.0% | 12.0% | 8.0% | |
| Byd Co Ltd ($1211) | 13.0% | 11.2% | 4.2% | 5.7% | |
| Dongfeng Motor Group Co Ltd ($489) | 6.4% | 2.2% | 3.8% | 2.5% | |
| |
|---|
| Median (9 companies) | 6.4% | 2.5% | 3.8% | 2.5% | |
|---|
| Geely Automobile Holdings Ltd ($175) | 4.5% | 3.9% | 5.0% | 5.3% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Wall Motor Co Ltd ($2333) | 27.7% | 32.2% | 25.5% | 22.5% | |
| Wuling Motors Holdings Ltd ($305) | 7.2% | 7.7% | 10.0% | 11.8% | |
| Byd Co Ltd ($1211) | 2.7% | 2.5% | 3.9% | 8.5% | |
| Dah Chong Hong Holdings Ltd ($1828) | 11.4% | 8.5% | 7.7% | 6.2% | 6.3% |
| Qingling Motors Co Ltd ($1122) | 4.5% | 5.7% | 5.1% | 5.8% | |
| |
|---|
| Median (9 companies) | 2.7% | 3.5% | 3.9% | 5.8% | 6.3% |
|---|
| Geely Automobile Holdings Ltd ($175) | 16.2% | 19.6% | 13.4% | 15.0% | 22.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 2.8x | 3.8x | 3.3x | 3.8x |
| Byd Co Ltd ($1211) | 3.4x | 6.7x | 3.9x | 2.9x | |
| Sinotruk Hong Kong Ltd ($3808) | 3.8x | 2.6x | 0.3x | 0.3x | |
| Great Wall Motor Co Ltd ($2333) | -0.2x | -0.1x | 0.1x | 0.3x | |
| Guangzhou Automobile Group Co Ltd ($2238) | | | 13.2x | 0.3x | |
| |
|---|
| Median (8 companies) | 2.0x | 2.2x | 1.6x | 0.3x | 3.8x |
|---|
| Geely Automobile Holdings Ltd ($175) | -0.1x | -0.9x | -1.2x | -1.6x | -1.7x |
