China Resources Power Holdings Co Ltd reports 24.8% Net Income decline and 3.2 pp EBITDA Margin decline from 41.9% to 38.8%
23/03/2017 • About China Resources Power Holdings Co Ltd (
$836) • By InTwits
China Resources Power Holdings Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Resources Power Holdings Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 26.6%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 1,493 in FY2016, 660 in FY2015, 544 in FY2014, 1,504 in FY2013, 1,099 in FY2012
- The company has business model with low profitability: ROIC is at 9.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.4x while industry average is 3.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Resources Power Holdings Co Ltd ($836) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 62,436 | 69,582 | 70,681 | 71,436 | 66,213 | -7.3% |
| EBITDA | 17,805 | 23,587 | 23,467 | 29,937 | 25,660 | -14.3% |
| Net Income | 7,897 | 11,437 | 9,637 | 10,447 | 7,859 | -24.8% |
Balance Sheet
|
|---|
| Cash | 4,397 | 5,878 | 8,285 | 7,274 | 4,347 | -40.2% |
| Short Term Debt | 23,506 | 19,131 | 20,897 | 27,404 | 21,297 | -22.3% |
| Long Term Debt | 59,876 | 73,438 | 79,536 | 61,114 | 70,167 | 14.8% |
Cash flow
|
|---|
| Capex | 10,374 | 23,258 | 24,483 | 16,811 | 16,319 | -2.9% |
Ratios
|
|---|
| Revenue growth | 2.8% | 11.4% | 1.6% | 1.1% | -7.3% | |
| EBITDA growth | 31.5% | 32.5% | -0.5% | 27.6% | -14.3% | |
| EBITDA Margin | 28.5% | 33.9% | 33.2% | 41.9% | 38.8% | -3.2% |
| Net Income Margin | 12.6% | 16.4% | 13.6% | 14.6% | 11.9% | -2.8% |
| CAPEX, % of revenue | 16.6% | 33.4% | 34.6% | 23.5% | 24.6% | 1.1% |
| ROIC | 7.7% | 9.7% | 8.0% | 11.0% | 9.2% | -1.9% |
| ROE | 14.7% | 18.5% | 13.6% | 14.1% | 11.0% | -3.1% |
| Net Debt/EBITDA | 4.4x | 3.7x | 3.9x | 2.7x | 3.4x | 0.7x |
Revenue and profitability
China Resources Power Holdings Co Ltd's Revenue decreased on 7.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.2 pp from 41.9% to 38.8% in FY2016.
Net Income marign decreased on 2.8 pp from 14.6% to 11.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 24.6% in FY2016. The company's CAPEX/Revenue decreased on 8.8 pp from 33.4% in FY2013 to 24.6% in FY2016. It's average level of CAPEX/Revenue for the last three years was 27.6%.The company invested a big chunk of EBITDA (63.6%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (9.17%) and ROE (11.02%). ROIC decreased slightly on 1.9 pp from 11.0% to 9.2% in FY2016. ROE decreased on 3.1 pp from 14.1% to 11.0% in FY2016.
Leverage (Debt)
Debt level is 3.4x Net Debt / EBITDA and 3.6x Debt / EBITDA. Net Debt / EBITDA surged on 0.7x from 2.7x to 3.4x in FY2016. Debt increased on 3.3% while cash dropped on 40.2%.
Appendix 1: Peers in Electric
Below we provide China Resources Power Holdings Co Ltd benchmarking against other companies in Electric 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 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 26.0% | 46.7% | 4.1% | 19.6% | |
| CGN Power Co Ltd ($1816) | | -1.2% | 19.3% | 12.3% | 41.4% |
| Huadian Fuxin Energy Corp Ltd ($816) | 56.0% | 16.7% | 4.9% | 10.4% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | | 28.9% | -7.9% | 7.8% | 3.5% |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | | -1.8% | 2.9% | 6.7% | 1.9% |
| |
|---|
| Median (15 companies) | 9.7% | 11.8% | 7.2% | -3.5% | 1.9% |
|---|
| China Resources Power Holdings Co Ltd ($836) | | 11.4% | 1.6% | 1.1% | -7.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Power Assets Holdings Ltd ($6) | 60.0% | 63.5% | 85.6% | 99.4% | 99.5% |
| China Power New Energy Development Co Ltd ($735) | 73.3% | 70.8% | 72.0% | 74.9% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.1% | 58.6% | 54.0% | 53.7% | 53.0% |
| CGN Power Co Ltd ($1816) | 46.5% | 46.9% | 48.6% | 47.9% | 43.7% |
| Tianjin Development Hldgs Ltd ($882) | 8.5% | 5.0% | 18.7% | 18.6% | |
| |
|---|
| Median (6 companies) | 46.5% | 52.8% | 48.6% | 50.8% | 48.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 94.0% | 80.5% | 91.3% | 93.1% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 90.5% | 82.8% | 87.0% | 82.4% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.6% | 77.6% | 73.3% | 71.7% | 70.4% |
| Power Assets Holdings Ltd ($6) | 66.2% | 68.0% | 2,533.1% | 71.2% | -84.2% |
| CGN Power Co Ltd ($1816) | 66.0% | 62.6% | 60.5% | 59.4% | 52.9% |
| |
|---|
| Median (15 companies) | 32.1% | 39.0% | 42.3% | 52.1% | 30.5% |
|---|
| China Resources Power Holdings Co Ltd ($836) | 28.5% | 33.9% | 33.2% | 41.9% | 38.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerchina Holdings Ltd ($622) | 24.1% | 28.3% | 3.8% | 321.6% | |
| Huaneng Renewables Corp Ltd ($958) | 163.4% | 124.0% | 217.8% | 171.9% | |
| China Power New Energy Development Co Ltd ($735) | 82.2% | 80.1% | 119.5% | 99.0% | |
| Huadian Fuxin Energy Corp Ltd ($816) | 62.2% | 54.3% | 91.8% | 96.0% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 157.1% | 81.7% | 106.3% | 93.4% | |
| |
|---|
| Median (15 companies) | 31.9% | 26.7% | 15.8% | 20.0% | 12.3% |
|---|
| China Resources Power Holdings Co Ltd ($836) | 16.6% | 33.4% | 34.6% | 23.5% | 24.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CLP Holdings Ltd ($2) | 7.0% | 4.8% | 8.5% | 12.8% | 10.1% |
| China Power International Development Ltd ($2380) | 5.7% | 7.5% | 8.0% | 10.1% | 6.4% |
| Huadian Power International Corp Ltd ($1071) | 5.0% | 8.4% | 10.4% | 10.0% | |
| Amber Energy Ltd ($90) | 5.4% | 4.6% | 3.6% | 8.6% | |
| Huadian Fuxin Energy Corp Ltd ($816) | 7.5% | 8.1% | 7.7% | 6.2% | |
| |
|---|
| Median (15 companies) | 5.0% | 5.8% | 6.0% | 5.1% | 5.2% |
|---|
| China Resources Power Holdings Co Ltd ($836) | 7.7% | 9.7% | 8.0% | 11.0% | 9.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Meiya Power Holdings Co Ltd ($1811) | 9.1x | 8.1x | 4.3x | 8.6x | 6.5x |
| China Datang Corp Renewable Power Co Ltd ($1798) | 9.1x | 8.2x | 8.7x | 8.5x | |
| CGN Power Co Ltd ($1816) | 6.5x | 6.7x | 7.8x | 8.4x | 9.3x |
| China Power New Energy Development Co Ltd ($735) | 4.8x | 5.5x | 6.4x | 7.9x | |
| Huadian Fuxin Energy Corp Ltd ($816) | 6.9x | 6.2x | 6.5x | 7.4x | |
| |
|---|
| Median (13 companies) | 6.2x | 5.8x | 5.5x | 5.2x | 5.4x |
|---|
| China Resources Power Holdings Co Ltd ($836) | 4.4x | 3.7x | 3.9x | 2.7x | 3.4x |
