Fosun International Ltd CAPEX dropped on 32.9% and Revenue decreased on 6.1%
28/03/2017 • About Fosun International Ltd (
$656) • By InTwits
Fosun International Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Fosun International Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.4%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 1,432 in 2016, 1,594 in 2015, 1,879 in 2014, 3,298 in 2013, 4,912 in 2012
- The company has business model with low profitability: ROIC is at 7.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Fosun International Ltd ($656) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 51,765 | 51,017 | 61,738 | 78,797 | 73,967 | -6.1% |
| Gross Profit | 9,325 | 10,358 | 14,616 | 17,662 | 25,872 | 46.5% |
| SG&A | 5,778 | 6,608 | 11,349 | 16,447 | 23,373 | 42.1% |
| EBITDA | 8,655 | 11,752 | 12,900 | 17,529 | 21,577 | 23.1% |
| Net Income | 3,707 | 5,519 | 6,854 | 8,038 | 10,268 | 27.7% |
Balance Sheet
|
|---|
| Cash | 19,314 | 12,777 | 25,849 | 37,955 | 35,755 | -5.8% |
| Short Term Debt | 27,152 | 31,809 | 46,741 | 49,060 | 44,155 | -10.0% |
| Long Term Debt | 30,155 | 37,525 | 49,714 | 66,770 | 82,607 | 23.7% |
Cash flow
|
|---|
| Capex | 4,701 | 6,508 | 5,031 | 7,890 | 5,296 | -32.9% |
Ratios
|
|---|
| Revenue growth | -8.9% | -1.4% | 21.0% | 27.6% | -6.1% | |
| EBITDA growth | -3.3% | 35.8% | 9.8% | 35.9% | 23.1% | |
| Gross Margin | 18.0% | 20.3% | 23.7% | 22.4% | 35.0% | 12.6% |
| EBITDA Margin | 16.7% | 23.0% | 20.9% | 22.2% | 29.2% | 6.9% |
| Net Income Margin | 7.2% | 10.8% | 11.1% | 10.2% | 13.9% | 3.7% |
| SG&A, % of revenue | 11.2% | 13.0% | 18.4% | 20.9% | 31.6% | 10.7% |
| CAPEX, % of revenue | 9.1% | 12.8% | 8.1% | 10.0% | 7.2% | -2.9% |
| ROIC | 6.1% | 7.9% | 6.8% | 6.9% | 7.6% | 0.7% |
| ROE | 11.1% | 14.8% | 15.4% | 12.9% | 12.2% | -0.7% |
| Net Debt/EBITDA | 4.4x | 4.8x | 5.5x | 4.4x | 4.2x | -0.2x |
Revenue and profitability
Fosun International Ltd's Revenue decreased on 6.1%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.9 pp from 22.2% to 29.2% in 2016.
Gross Margin surged on 12.6 pp from 22.4% to 35.0% in 2016. SG&A as a % of Revenue surged on 10.7 pp from 20.9% to 31.6% in 2016.
Net Income marign increased on 3.7 pp from 10.2% to 13.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
Fosun International Ltd's CAPEX/Revenue was 7.2% in 2016. Fosun International Ltd's CAPEX/Revenue decreased on 5.6 pp from 12.8% in 2013 to 7.2% in 2016. Average CAPEX/Revenue for the last three years was 8.4%.
Return on investment
The company operates at good ROE (12.22%) while ROIC is low (7.64%). ROIC increased slightly on 0.74 pp from 6.9% to 7.6% in 2016. ROE decreased slightly on 0.68 pp from 12.9% to 12.2% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.2x and Debt / EBITDA is 5.9x. Net Debt / EBITDA dropped on 0.2x from 4.4x to 4.2x in 2016. Debt increased on 9.4% while cash decreased on 5.8%.
Appendix 1: Peers in Iron/Steel
Below we provide Fosun International Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| CAA Resources Ltd ($2112) | | 103.2% | 38.0% | 261.2% | 125.5% |
| Newton Resources Ltd ($1231) | | | -41.6% | 170.9% | |
| Wanguo International Mining Group Ltd ($3939) | -1.0% | -11.0% | -16.2% | 0.7% | |
| Da Ming International Holdings Ltd ($1090) | | 29.3% | 29.8% | -8.1% | 13.7% |
| China Metal International Holdings Inc ($319) | -2.5% | 7.3% | 8.0% | -10.8% | |
| |
|---|
| Median (19 companies) | -12.0% | 0.6% | -6.0% | -21.1% | 15.5% |
|---|
| Fosun International Ltd ($656) | | -1.4% | 21.0% | 27.6% | -6.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newton Resources Ltd ($1231) | | -223.7% | 15.7% | 37.5% | |
| Wanguo International Mining Group Ltd ($3939) | 47.4% | 50.7% | 39.6% | 29.2% | |
| China Metal International Holdings Inc ($319) | 20.9% | 24.3% | 24.8% | 25.5% | |
| China Hanking Holdings Ltd ($3788) | 53.6% | 54.4% | 35.1% | 23.8% | |
| Vale SA ($6210) | 45.4% | 48.3% | 33.1% | 19.6% | 35.4% |
| |
|---|
| Median (19 companies) | 14.8% | 12.7% | 11.3% | 8.5% | 9.4% |
|---|
| Fosun International Ltd ($656) | 18.0% | 20.3% | 23.7% | 22.4% | 35.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 39.7% | 36.2% | 31.3% | 26.7% | |
| China Metal International Holdings Inc ($319) | 19.7% | 21.3% | 21.0% | 22.0% | |
| Xingda International Holdings Ltd ($1899) | 17.3% | 22.2% | 19.1% | 13.6% | |
| Tiangong International Co Ltd ($826) | 25.1% | 25.8% | 19.3% | 11.6% | |
| Xiwang Special Steel Co Ltd ($1266) | 9.2% | 11.7% | 13.4% | 11.2% | |
| |
|---|
| Median (19 companies) | 12.6% | 11.7% | 7.1% | 1.9% | 3,240.6% |
|---|
| Fosun International Ltd ($656) | 16.7% | 23.0% | 20.9% | 22.2% | 29.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newton Resources Ltd ($1231) | | 926.9% | 1,395.7% | 197.0% | |
| Vale SA ($6210) | 34.0% | 28.1% | 29.8% | 34.5% | 18.3% |
| China Hanking Holdings Ltd ($3788) | 38.0% | 35.7% | 20.2% | 30.5% | |
| Pan Asia Mining Ltd ($8173) | 1.5% | 0.4% | 2.4% | 24.4% | 7.6% |
| China Vanadium Titano - Magnetite Mining Co Ltd ($893) | 8.9% | 10.5% | 20.4% | 24.1% | |
| |
|---|
| Median (19 companies) | 8.3% | 10.5% | 6.4% | 7.2% | 12.9% |
|---|
| Fosun International Ltd ($656) | 9.1% | 12.8% | 8.1% | 10.0% | 7.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Metal International Holdings Inc ($319) | 11.0% | 12.0% | 12.7% | 11.4% | |
| Wanguo International Mining Group Ltd ($3939) | 38.4% | 24.4% | 15.0% | 11.1% | |
| Golik Holdings Ltd ($1118) | 7.0% | 7.4% | 10.0% | 10.8% | |
| CAA Resources Ltd ($2112) | 69.2% | 33.5% | 2.2% | 6.9% | |
| Xiwang Special Steel Co Ltd ($1266) | 7.8% | 8.7% | 11.5% | 4.6% | |
| |
|---|
| Median (19 companies) | 6.7% | 7.5% | 3.1% | -3.9% | 33.9% |
|---|
| Fosun International Ltd ($656) | 6.1% | 7.9% | 6.8% | 6.9% | 7.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Angang Steel Co Ltd ($347) | 21.4x | 4.0x | 4.3x | 29.1x | |
| China Hanking Holdings Ltd ($3788) | 0.4x | 2.5x | 4.7x | 27.3x | |
| Tiangong International Co Ltd ($826) | 2.5x | 3.0x | 3.2x | 6.9x | |
| China Oriental Group Co Ltd ($581) | 4.6x | 5.3x | 4.5x | 3.3x | |
| Xiwang Special Steel Co Ltd ($1266) | 5.8x | 4.3x | 1.9x | 2.1x | |
| |
|---|
| Median (10 companies) | 2.1x | 2.5x | 2.9x | 1.5x | 4.2x |
|---|
| Fosun International Ltd ($656) | 4.4x | 4.8x | 5.5x | 4.4x | 4.2x |
