China Communications Construction Co Ltd reports 9.7% EBITDA growth in 2016 and 0.76 pp EBITDA Margin growth from 8.5% to 9.3%
28/03/2017 • About China Communications Construction Co Ltd (
$1800) • By InTwits
China Communications Construction Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.3% in 2016 vs. 8.5% in 2015 vs. 8.7% in 2012
- China Communications Construction Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 0.4%.
- CAPEX is quite volatile: 29,816 in 2016, 27,144 in 2015, 21,838 in 2014, 17,645 in 2013, 10,500 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Communications Construction Co Ltd ($1800) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 295,321 | 331,798 | 366,042 | 403,616 | 406,331 | 0.7% |
| Gross Profit | 32,598 | 33,938 | 39,272 | 49,754 | 54,499 | 9.5% |
| SG&A | 11,496 | 12,045 | 14,543 | 18,639 | 22,487 | 20.6% |
| EBITDA | 25,741 | 27,261 | 31,621 | 34,378 | 37,712 | 9.7% |
| Net Income | 12,277 | 12,568 | 13,985 | 15,828 | 17,210 | 8.7% |
Balance Sheet
|
|---|
| Cash | 67,503 | 81,238 | 71,823 | 94,960 | 108,720 | 14.5% |
| Short Term Debt | 69,187 | 87,818 | 91,034 | 86,605 | 99,484 | 14.9% |
| Long Term Debt | 75,058 | 99,157 | 137,801 | 168,578 | 173,996 | 3.2% |
Cash flow
|
|---|
| Capex | 7,364 | 8,096 | 11,032 | 14,016 | 10,711 | -23.6% |
Ratios
|
|---|
| Revenue growth | 0.4% | 12.4% | 10.3% | 10.3% | 0.7% | |
| EBITDA growth | 12.8% | 5.9% | 16.0% | 8.7% | 9.7% | |
| Gross Margin | 11.0% | 10.2% | 10.7% | 12.3% | 13.4% | 1.1% |
| EBITDA Margin | 8.7% | 8.2% | 8.6% | 8.5% | 9.3% | 0.8% |
| Net Income Margin | 4.2% | 3.8% | 3.8% | 3.9% | 4.2% | 0.3% |
| SG&A, % of revenue | 3.9% | 3.6% | 4.0% | 4.6% | 5.5% | 0.9% |
| CAPEX, % of revenue | 2.5% | 2.4% | 3.0% | 3.5% | 2.6% | -0.8% |
| ROIC | 8.5% | 7.0% | 7.0% | 6.4% | 6.1% | -0.3% |
| ROE | 15.7% | 13.8% | 13.2% | 12.0% | 11.2% | -0.8% |
| Net Debt/EBITDA | 3.0x | 3.9x | 5.0x | 4.7x | 4.4x | -0.3x |
China Communications Construction Co Ltd ($1800) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 80,515 | 102,230 | 107,414 | 137,094 | | | | |
| Net Income | 2,306 | 4,717 | 4,251 | 5,469 | | | | |
Balance Sheet
|
|---|
| Cash | 89,249 | 88,106 | 80,621 | 110,695 | | | | |
| Short Term Debt | 98,712 | 110,349 | 96,730 | 117,575 | | | | |
| Long Term Debt | 182,248 | 185,917 | 197,285 | 172,897 | | | | |
Ratios
|
|---|
| Gross Margin | 11.5% | 13.2% | 13.2% | 16.7% | | | | |
| Net Income Margin | 2.9% | 4.6% | 4.0% | 4.0% | | | | |
Revenue and profitability
China Communications Construction Co Ltd's Revenue increased slightly on 0.67%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.67 pp from 16.3% to 17.0% in 2016.
Gross Margin increased slightly on 1.1 pp from 12.3% to 13.4% in 2016. SG&A as a % of Revenue increased slightly on 0.92 pp from 4.6% to 5.5% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
China Communications Construction Co Ltd's CAPEX/Revenue was 2.6% in 2016. CAPEX/Revenue showed almost no change from 2013 to 2016. It's average CAPEX/Revenue for the last three years was 3.0%.
Return on investment
The company operates at low ROIC (6.06%) and ROE (11.25%). ROIC showed almost no change in 2016. ROE decreased slightly on 0.78 pp from 12.0% to 11.2% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.4x and Debt / EBITDA is 7.3x. Net Debt / EBITDA dropped on 0.3x from 4.7x to 4.4x in 2016. Debt increased on 7.2% while cash jumped on 14.5%.
Appendix 1: Peers in Engineering&Construction
Below we provide China Communications Construction Co Ltd benchmarking against other companies in Engineering&Construction 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 |
|---|
| CNQC International Holdings Ltd ($1240) | 21.6% | 91.0% | 103.7% | 807.4% | |
| China National Culture Group Ltd ($745) | | -76.8% | -55.8% | 592.3% | 86.7% |
| Vision Fame International Holding Ltd ($1315) | | 45.9% | -10.5% | 105.6% | 40.9% |
| Sino Credit Holdings Ltd ($628) | | | | 97.4% | -40.3% |
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
| |
|---|
| Median (46 companies) | 20.7% | 24.8% | 20.8% | 10.3% | 6.4% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 66.4% | 62.1% | 62.4% | 61.1% | |
| Huayu Expressway Group Ltd ($1823) | 43.6% | 65.6% | 64.0% | 58.9% | |
| Broad Greenstate International Co Ltd ($1253) | 20.1% | 28.7% | 35.8% | 36.7% | 37.4% |
| Sam Woo Construction Group Ltd ($3822) | 33.2% | 27.3% | 33.6% | 36.0% | 19.8% |
| Glory Flame Holdings Ltd ($8059) | 27.2% | 36.8% | 34.8% | 33.9% | |
| |
|---|
| Median (41 companies) | 17.5% | 16.9% | 16.1% | 16.3% | 12.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huayu Expressway Group Ltd ($1823) | 46.2% | 73.8% | 77.1% | 76.2% | |
| HNA Infrastructure Company Ltd ($357) | 62.8% | 63.7% | 62.8% | 61.7% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 31.2% | 20.6% | 36.2% | 60.9% | 38.4% |
| Beijing Capital International Airport Co Ltd ($694) | 53.4% | 52.9% | 50.3% | 51.6% | 50.9% |
| China National Culture Group Ltd ($745) | -30.4% | -72.7% | -279.2% | 45.3% | -14.6% |
| |
|---|
| Median (46 companies) | 10.0% | 11.2% | 9.7% | 9.0% | 5.3% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 36.8% | 5.7% | 85.4% | 155.4% | |
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
| Beijing Capital International Airport Co Ltd ($694) | 3.5% | 6.6% | 7.2% | 28.2% | |
| NEW Concepts Holdings Ltd ($2221) | 1.7% | 1.2% | 3.1% | 20.5% | 0.3% |
| Louis XIII Holdings Ltd ($577) | 1.2% | 29.5% | 9.3% | 16.1% | 47.3% |
| |
|---|
| Median (46 companies) | 2.3% | 3.3% | 1.8% | 2.1% | 2.4% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| In Construction Holdings Ltd ($1500) | | 52.8% | 37.0% | 49.4% | 40.4% |
| Chun Sing Engineering Holdings Ltd ($2277) | | 98.3% | 54.9% | 43.7% | 21.6% |
| NEW Concepts Holdings Ltd ($2221) | | 51.0% | 78.8% | 39.0% | 23.3% |
| Sam Woo Construction Group Ltd ($3822) | | 28.2% | 28.7% | 33.5% | 18.3% |
| Ngai Shun Holdings Ltd ($1246) | 68.8% | 77.2% | 45.2% | 31.0% | -2.9% |
| |
|---|
| Median (48 companies) | 6.1% | 6.1% | 5.4% | 5.6% | 2.5% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
| Hsin Chong Construction Group Ltd ($404) | 1.8x | 8.0x | 10.2x | 41.7x | |
| China Resources and Transportation Group Ltd ($269) | | | 66.7x | 29.7x | |
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | 2.7x |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (40 companies) | 0.8x | 0.3x | 0.2x | 0.7x | 0.9x |
|---|
