Aluminum Corp of China Ltd EBITDA surged on 124% in 2016 and EBITDA Margin increased on 4.0 pp from 4.4% to 8.4%
23/03/2017 • About Aluminum Corp of China Ltd (
$2600) • By InTwits
Aluminum Corp of China Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 8.8% in 2016, 4.4% in 2015, -2.4% in 2014, 7.5% in 2013, 0.5% in 2012
- Aluminum Corp of China Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 0.80 in 2016, 44,757 in 2015, 44,005 in 2014, 20,932 in 2013, 24,279 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 6.4x while industry average is 5.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Aluminum Corp of China Ltd ($2600) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 143,437 | 169,431 | 142,000 | 123,095 | 144,229 | 17.2% |
| Gross Profit | 11 | 2,751 | 671 | 3,881 | 10,555 | 171.9% |
| SG&A | 4,273 | 4,304 | 6,151 | 3,602 | 5,254 | 45.9% |
| EBITDA | 686 | 12,725 | -3,382 | 5,356 | 12,731 | 137.7% |
| Net Income | -8,234 | 975 | -16,208 | 149 | 368 | 147.9% |
Balance Sheet
|
|---|
| Cash | 9,064 | 11,382 | 16,269 | 20,807 | 23,814 | 14.4% |
| Short Term Debt | 67,915 | 73,348 | 75,359 | 63,246 | 58,459 | -7.6% |
| Long Term Debt | 36,636 | 46,295 | 44,769 | 54,001 | 47,323 | -12.4% |
Cash flow
|
|---|
| Capex | 9,150 | 8,519 | 8,334 | 9,372 | 6,264 | -33.2% |
Ratios
|
|---|
| Revenue growth | -1.7% | 18.1% | -16.2% | -13.3% | 17.2% | |
| EBITDA growth | -92.7% | 1,755.2% | -126.6% | -258.4% | 137.7% | |
| Gross Margin | 0.0% | 1.6% | 0.5% | 3.2% | 7.3% | 4.2% |
| EBITDA Margin | 0.5% | 7.5% | -2.4% | 4.4% | 8.8% | 4.5% |
| Net Income Margin | -5.7% | 0.6% | -11.4% | 0.1% | 0.3% | 0.1% |
| SG&A, % of revenue | 3.0% | 2.5% | 4.3% | 2.9% | 3.6% | 0.7% |
| CAPEX, % of revenue | 6.4% | 5.0% | 5.9% | 7.6% | 4.3% | -3.3% |
| ROIC | -2.7% | 3.3% | -6.4% | -1.2% | 3.6% | 4.8% |
| ROE | -17.2% | 2.2% | -44.6% | 0.4% | 0.9% | 0.5% |
| Net Debt/EBITDA | 139.2x | 8.5x | | 18.0x | 6.4x | -11.6x |
Aluminum Corp of China Ltd ($2600) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 20,897 | 28,876 | 41,655 | 51,938 | | | | |
| Net Income | 18 | 50 | 56 | 244 | | | | |
Balance Sheet
|
|---|
| Cash | 15,379 | 18,724 | 25,583 | 23,814 | | | | |
| Short Term Debt | 54,171 | 63,064 | 56,583 | 60,072 | | | | |
| Long Term Debt | 47,631 | 46,490 | 42,767 | 47,323 | | | | |
Ratios
|
|---|
| Gross Margin | 6.8% | 8.1% | 5.3% | 7.7% | | | | |
| Net Income Margin | 0.1% | 0.2% | 0.1% | 0.5% | | | | |
Revenue and profitability
Aluminum Corp of China Ltd's Revenue jumped on 17.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 41.6 pp from 46.6% to 88.2% in 2016.
Gross Margin increased on 4.2 pp from 3.2% to 7.3% in 2016. SG&A as a % of Revenue increased slightly on 0.72 pp from 2.9% to 3.6% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 4.3%. CAPEX/Revenue decreased slightly on 0.68 pp from 5.0% in 2013 to 4.3% in 2016. Average CAPEX/Revenue for the last three years was 5.9%.
Return on investment
The company operates at low ROIC (3.59%) and ROE (0.94%). ROIC increased on 4.8 pp from -1.2% to 3.6% in 2016. ROE increased slightly on 0.51 pp from 0.44% to 0.94% in 2016.
Leverage (Debt)
Debt level is 6.4x Net Debt / EBITDA and 8.3x Debt / EBITDA. Net Debt / EBITDA dropped on 11.6x from 18.0x to 6.4x in 2016. Debt decreased on 9.8% while cash surged on 14.4%.
Appendix 1: Peers in Mining
Below we provide Aluminum Corp of China Ltd benchmarking against other companies in Mining 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 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 89.7% | -95.8% | 2,361.6% | 1,178.3% |
| Real Gold Mining Ltd ($246) | -44.0% | -68.0% | -26.2% | 106.2% | |
| REX Global Entertainment Holdings Ltd ($164) | | 81.6% | -15.5% | 96.4% | 30.4% |
| Hengxing Gold Holding Co Ltd ($2303) | | | 3,467.3% | 78.0% | |
| Zijin Mining Group Co Ltd ($2899) | | 2.5% | 18.1% | 26.9% | 6.1% |
| |
|---|
| Median (48 companies) | 6.4% | -1.2% | -5.3% | -17.4% | 6.1% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 2.5% | 5.1% | 39.6% | 93.0% | 87.4% |
| REX Global Entertainment Holdings Ltd ($164) | -15.8% | -7.8% | -0.8% | 88.6% | 87.3% |
| China Billion Resources Ltd ($274) | 71.4% | 47.2% | 73.4% | 79.7% | |
| Sun International Resources Ltd ($8029) | 83.2% | 73.1% | 64.8% | 69.4% | 58.8% |
| Grand T G Gold Holdings Ltd ($8299) | | | | 57.3% | 59.0% |
| |
|---|
| Median (50 companies) | 15.2% | 14.0% | 15.4% | 15.5% | 26.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| G-Resources Group Ltd ($1051) | | 54.5% | 53.4% | 58.3% | |
| Grand T G Gold Holdings Ltd ($8299) | | | | 53.7% | 58.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 70.0% | 64.6% | 59.6% | 51.3% | |
| Timeless Software Ltd ($8028) | -113.1% | 24.7% | -13.7% | 46.1% | 28.0% |
| Hengxing Gold Holding Co Ltd ($2303) | | -766.2% | 24.5% | 43.9% | |
| |
|---|
| Median (50 companies) | 5.1% | 8.3% | 5.5% | 5.1% | 13.4% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% | 20.9% |
| Kaz Minerals ($847) | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% |
| Chinalco Mining Corp International ($3668) | | | | 115.6% | |
| China Dynamics Holdings Ltd ($476) | 1.8% | 0.0% | 1.0% | 113.8% | 5.7% |
| MMG Ltd ($1208) | 25.7% | 22.6% | 41.9% | 100.4% | 31.0% |
| |
|---|
| Median (49 companies) | 17.4% | 17.6% | 15.8% | 12.3% | 7.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Mining Co Ltd ($1164) | 2.6% | 3.3% | 7.9% | 16.7% | |
| United Co RUSAL PLC ($486) | 0.3% | -9.0% | 6.3% | 12.3% | 9.0% |
| Xingfa Aluminium Holdings Ltd ($98) | 7.6% | 8.8% | 11.7% | 11.8% | |
| Timeless Software Ltd ($8028) | -29.1% | 7.3% | -4.6% | 11.6% | 3.9% |
| China Hongqiao Group Ltd ($1378) | 24.8% | 17.0% | 14.1% | 10.6% | |
| |
|---|
| Median (51 companies) | 1.5% | 2.4% | 0.0% | -1.0% | 2.2% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 9.2x | 9.7x | 9.2x | 31.5x | |
| Chinalco Mining Corp International ($3668) | | | | 25.0x | |
| MMG Ltd ($1208) | 2.1x | 2.0x | 10.2x | 20.2x | 10.4x |
| Kaz Minerals ($847) | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 1.5x | 4.1x | 6.4x | 13.5x | |
| |
|---|
| Median (30 companies) | 2.0x | 1.9x | 4.5x | 3.8x | 4.4x |
|---|
