Dongfeng Motor Group Co Ltd reports 27.7% EBITDA growth in 2016 and 0.78 pp EBITDA Margin growth from 2.4% to 3.2%
28/03/2017 • About Dongfeng Motor Group Co Ltd (
$489) • By InTwits
Dongfeng Motor Group Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dongfeng Motor Group Co Ltd doesn't have a profitable business model yet: 2016 ROIC is 1.5%
- Dongfeng Motor Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 2,778 in 2016, 3,132 in 2015, 3,121 in 2014, 814 in 2013, 387 in 2012
- The company has potentially unprofitable business model: ROIC is at 1.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dongfeng Motor Group Co Ltd ($489) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,090 | 37,263 | 83,114 | 126,566 | 122,535 | -3.2% |
| Gross Profit | 354 | 4,681 | 10,817 | 16,929 | 17,515 | 3.5% |
| SG&A | 1,518 | 4,447 | 7,527 | 10,835 | 11,401 | 5.2% |
| EBITDA | -1,123 | -333 | 2,285 | 3,078 | 3,930 | 27.7% |
| Net Income | 9,092 | 10,528 | 12,797 | 11,550 | 13,345 | 15.5% |
Balance Sheet
|
|---|
| Cash | 17,940 | 21,739 | 25,233 | 31,806 | 30,851 | -3.0% |
| Short Term Debt | 2,697 | 17,597 | 30,175 | 17,930 | 22,177 | 23.7% |
| Long Term Debt | 0 | 0 | 350 | 7,559 | 7,087 | -6.2% |
Cash flow
|
|---|
| Capex | 387 | 814 | 3,121 | 3,132 | 2,778 | -11.3% |
Ratios
|
|---|
| Revenue growth | -95.4% | 511.9% | 123.0% | 52.3% | -3.2% | |
| EBITDA growth | -106.9% | -70.3% | -786.2% | 34.7% | 27.7% | |
| Gross Margin | 5.8% | 12.6% | 13.0% | 13.4% | 14.3% | 0.9% |
| EBITDA Margin | -18.4% | -0.9% | 2.7% | 2.4% | 3.2% | 0.8% |
| Net Income Margin | 149.3% | 28.3% | 15.4% | 9.1% | 10.9% | 1.8% |
| SG&A, % of revenue | 24.9% | 11.9% | 9.1% | 8.6% | 9.3% | 0.7% |
| CAPEX, % of revenue | 6.4% | 2.2% | 3.8% | 2.5% | 2.3% | -0.2% |
| ROIC | -2.1% | -1.6% | 0.8% | 1.2% | 1.5% | 0.3% |
| ROE | 18.1% | 18.0% | 18.7% | 14.6% | 14.7% | 0.1% |
| Net Debt/EBITDA | | | 2.3x | -2.1x | -0.4x | 1.6x |
Revenue and profitability
The company's Revenue decreased on 3.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.78 pp from 2.4% to 3.2% in 2016.
Gross Margin increased slightly on 0.92 pp from 13.4% to 14.3% in 2016. SG&A as a % of Revenue increased slightly on 0.74 pp from 8.6% to 9.3% in 2016.
Net Income marign increased slightly on 1.8 pp from 9.1% to 10.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 2.3%. CAPEX/Revenue showed almost no change from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 2.8%.Battling declining revenue Dongfeng Motor Group Co Ltd invested a large share of EBITDA (70.7%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at good ROE (14.72%) while ROIC is low (1.50%). ROIC showed almost no change in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 7.4x Debt / EBITDA. Net Debt / EBITDA jumped on 1.6x from -2.1x to -0.4x in 2016. Debt surged on 14.8% while cash decreased on 3.0%.
Appendix 1: Peers in Auto Manufacturers
Below we provide Dongfeng Motor Group Co 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 |
|---|
| Byd Co Ltd ($1211) | -4.2% | 16.4% | 7.2% | 40.2% | |
| Geely Automobile Holdings Ltd ($175) | | 16.6% | -24.3% | 38.6% | 78.3% |
| Guangzhou Automobile Group Co Ltd ($2238) | 18.0% | 45.2% | 18.9% | 31.4% | |
| Great Wall Motor Co Ltd ($2333) | | 31.7% | 10.2% | 21.3% | 29.6% |
| Wuling Motors Holdings Ltd ($305) | 8.7% | 1.5% | 0.8% | 10.8% | |
| |
|---|
| Median (9 companies) | 2.3% | 9.0% | 7.2% | 10.8% | 5.4% |
|---|
| Dongfeng Motor Group Co Ltd ($489) | | 511.9% | 123.0% | 52.3% | -3.2% |
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% | 21.5% |
| Qingling Motors Co Ltd ($1122) | 12.3% | 15.2% | 15.1% | 18.7% | |
| Geely Automobile Holdings Ltd ($175) | 18.5% | 20.1% | 18.2% | 18.2% | 18.3% |
| 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% | |
| |
|---|
| Median (9 companies) | 11.8% | 13.4% | 13.8% | 15.3% | 15.0% |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 5.8% | 12.6% | 13.0% | 13.4% | 14.3% |
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% | 15.6% |
| Geely Automobile Holdings Ltd ($175) | 14.6% | 15.8% | 15.9% | 14.4% | 13.6% |
| 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% | |
| |
|---|
| Median (9 companies) | 6.6% | 7.4% | 7.8% | 7.5% | 8.5% |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -18.4% | -0.9% | 2.7% | 2.4% | 3.2% |
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% | 7.1% |
| Byd Co Ltd ($1211) | 13.0% | 11.2% | 4.2% | 5.7% | |
| Geely Automobile Holdings Ltd ($175) | 4.5% | 3.9% | 5.0% | 5.3% | 1.1% |
| |
|---|
| Median (9 companies) | 4.5% | 3.9% | 4.2% | 5.3% | 4.1% |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 6.4% | 2.2% | 3.8% | 2.5% | 2.3% |
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% | 25.0% |
| Geely Automobile Holdings Ltd ($175) | 16.2% | 19.6% | 13.4% | 15.0% | 22.6% |
| 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% |
| |
|---|
| Median (9 companies) | 4.5% | 5.7% | 5.1% | 6.2% | 14.4% |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -2.1% | -1.6% | 0.8% | 1.2% | 1.5% |
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 | 0.2x |
| Guangzhou Automobile Group Co Ltd ($2238) | | | 13.2x | 0.3x | |
| |
|---|
| Median (8 companies) | 1.8x | 1.9x | 0.6x | 0.3x | 0.2x |
|---|
| Dongfeng Motor Group Co Ltd ($489) | | | 2.3x | -2.1x | -0.4x |
