Bank of Communications Co Ltd CAPEX surged on 38.4% while Revenue decreased slightly on 2.0%
28/03/2017 • About Bank of Communications Co Ltd (
$3328) • By InTwits
Bank of Communications Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank of Communications Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.3%. At the same time it's a lot of higher than industry average of 2.3%.
- CAPEX is quite volatile: 35,584 in 2016, 25,711 in 2015, 17,793 in 2014, 15,105 in 2013, 9,763 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.0%
- It operates with high leverage: Net Debt/EBITDA is 4.4x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bank of Communications Co Ltd ($3328) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 271,566 | 297,013 | 333,632 | 357,489 | 350,511 | -2.0% |
| Net Income | 58,369 | 62,295 | 65,850 | 66,528 | 67,210 | 1.0% |
Balance Sheet
|
|---|
| Cash | 816,846 | 896,556 | 938,055 | 920,228 | 991,435 | 7.7% |
| Short Term Debt | 945,422 | 1,127,727 | 1,413,622 | 1,658,651 | 2,051,851 | 23.7% |
| Long Term Debt | 79,572 | 82,238 | 129,547 | 170,106 | 229,515 | 34.9% |
Cash flow
|
|---|
| Capex | 9,763 | 15,105 | 17,793 | 25,711 | 35,584 | 38.4% |
Ratios
|
|---|
| Revenue growth | 24.0% | 9.4% | 12.3% | 7.2% | -2.0% | |
| Net Income Margin | 21.5% | 21.0% | 19.7% | 18.6% | 19.2% | 0.6% |
| CAPEX, % of revenue | 3.6% | 5.1% | 5.3% | 7.2% | 10.2% | 3.0% |
| ROIC | 5.5% | 5.1% | 4.5% | 3.8% | 3.0% | -0.8% |
| ROE | 17.9% | 15.6% | 14.8% | 13.4% | 11.7% | -1.7% |
Revenue and profitability
The company's Revenue decreased slightly on 2.0%.
Net Income marign increased slightly on 0.57 pp from 18.6% to 19.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 10.2% in 2016. CAPEX/Revenue increased on 5.1 pp from 5.1% in 2013 to 10.2% in 2016. For the last three years the average CAPEX/Revenue was 7.6%.
Return on investment
The company operates at low ROIC (3.04%) and ROE (11.70%). ROIC decreased slightly on 0.77 pp from 3.8% to 3.0% in 2016. ROE decreased slightly on 1.7 pp from 13.4% to 11.7% in 2016.
Leverage (Debt)
Debt jumped on 24.7% while cash increased on 7.7%.
Appendix 1: Peers in Banks
Below you can find Bank of Communications Co Ltd benchmarking vs. other companies in Banks industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | | 43.4% | 6.8% | 116.4% | |
| Huishang Bank Corp Ltd ($3698) | | 22.8% | 24.3% | 24.6% | 17.3% |
| Shengjing Bank Co Ltd ($2066) | | 36.3% | 40.1% | 24.3% | 17.5% |
| Bank of Chongqing Co Ltd ($1963) | | 26.6% | 28.4% | 18.5% | |
| BOC Hong Kong Holdings Ltd ($2388) | 15.1% | 11.4% | -3.0% | 11.6% | |
| |
|---|
| Median (14 companies) | 36.7% | 12.1% | 23.6% | 4.8% | -3.3% |
|---|
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | 4.1% | 29.9% | 27.0% | 33.5% | |
| |
|---|
| Median (1 company) | 4.1% | 29.9% | 27.0% | 33.5% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dah Sing Banking Group Ltd ($2356) | 3.9% | 4.1% | 2.2% | 7.5% | |
| Dah Sing Financial Holdings Ltd ($440) | 3.0% | 3.4% | 1.7% | 5.9% | |
| Harbin Bank Co Ltd ($6138) | 19.8% | 9.9% | 6.5% | 5.8% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 4.0% | 4.3% | 4.8% | 4.4% | 2.0% |
| Shengjing Bank Co Ltd ($2066) | 1.6% | 2.2% | 5.0% | 3.0% | 2.3% |
| |
|---|
| Median (14 companies) | 2.6% | 2.9% | 1.8% | 2.5% | 1.8% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hang Seng Bank Ltd ($11) | 8.6% | 9.5% | 9.0% | 8.3% | 8.1% |
| Chong Hing Bank Ltd ($1111) | 5.5% | 5.2% | 16.4% | 5.7% | 5.6% |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 6.3% | 5.7% | 5.2% | 4.3% | 4.1% |
| Huishang Bank Corp Ltd ($3698) | 8.4% | 6.8% | 5.8% | 4.3% | 4.0% |
| Shengjing Bank Co Ltd ($2066) | 6.0% | 6.6% | 5.3% | 3.5% | 2.3% |
| |
|---|
| Median (12 companies) | 6.0% | 6.2% | 5.4% | 4.3% | 3.1% |
|---|
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -66.3x | -7.1x | -10.6x | -5.7x | |
| |
|---|
| Median (1 company) | -66.3x | -7.1x | -10.6x | -5.7x | |
|---|
