Metallurgical Corp of China Ltd Net Debt / EBITDA dropped on 3.2x from 9.0x to 5.9x in 2016 while Revenue increased on 2.1%
28/03/2017 • About Metallurgical Corp of China Ltd (
$1618) • By InTwits
Metallurgical Corp of China Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Metallurgical Corp of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 4.2%.
- CAPEX is quite volatile: 7,708 in 2016, 6,427 in 2015, 11,432 in 2014, 5,292 in 2013, 3,588 in 2012
- The company has potentially unprofitable business model: ROIC is at 4.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Metallurgical Corp of China Ltd ($1618) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 216,242 | 202,241 | 210,073 | 211,727 | 216,269 | 2.1% |
| Gross Profit | 16,040 | 21,068 | 22,189 | 22,909 | 24,900 | 8.7% |
| SG&A | 12,766 | 12,887 | 7,608 | 7,903 | 7,969 | 0.8% |
| EBITDA | 7,575 | 12,773 | 11,551 | 9,734 | 11,844 | 21.7% |
| Net Income | -6,943 | 2,981 | 3,965 | 4,802 | 5,376 | 12.0% |
Balance Sheet
|
|---|
| Cash | 32,084 | 31,243 | 28,571 | 28,736 | 44,768 | 55.8% |
| Short Term Debt | 74,437 | 74,343 | 60,235 | 86,019 | 82,030 | -4.6% |
| Long Term Debt | 57,065 | 42,224 | 43,669 | 30,760 | 32,024 | 4.1% |
Cash flow
|
|---|
| Capex | 5,334 | 2,902 | 2,760 | 3,357 | 3,115 | -7.2% |
Ratios
|
|---|
| Revenue growth | -2.6% | -6.5% | 3.9% | 0.8% | 2.1% | |
| EBITDA growth | -44.4% | 68.6% | -9.6% | -15.7% | 21.7% | |
| Gross Margin | 7.4% | 10.4% | 10.6% | 10.8% | 11.5% | 0.7% |
| EBITDA Margin | 3.5% | 6.3% | 5.5% | 4.6% | 5.5% | 0.9% |
| Net Income Margin | -3.2% | 1.5% | 1.9% | 2.3% | 2.5% | 0.2% |
| SG&A, % of revenue | 5.9% | 6.4% | 3.6% | 3.7% | 3.7% | -0.0% |
| CAPEX, % of revenue | 2.5% | 1.4% | 1.3% | 1.6% | 1.4% | -0.1% |
| ROIC | 2.5% | 5.5% | 4.8% | 3.6% | 4.3% | 0.8% |
| ROE | -15.5% | 7.0% | 8.6% | 8.9% | 8.0% | -0.9% |
| Net Debt/EBITDA | 13.1x | 6.7x | 6.5x | 9.0x | 5.9x | -3.2x |
Metallurgical Corp of China Ltd ($1618) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 41,616 | 52,481 | 45,278 | 76,895 | | | | |
| Net Income | 1,365 | 1,051 | 941 | 2,019 | | | | |
Balance Sheet
|
|---|
| Cash | 32,811 | 30,728 | 28,993 | 44,768 | | | | |
| Short Term Debt | 70,335 | 101,270 | 83,816 | 82,030 | | | | |
| Long Term Debt | 37,318 | 34,133 | 34,276 | 32,024 | | | | |
Ratios
|
|---|
| Gross Margin | 9.7% | 12.8% | 10.6% | 12.2% | | | | |
| Net Income Margin | 3.3% | 2.0% | 2.1% | 2.6% | | | | |
Revenue and profitability
Metallurgical Corp of China Ltd's Revenue increased on 2.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.77 pp from 9.8% to 10.5% in 2016.
Gross Margin increased slightly on 0.69 pp from 10.8% to 11.5% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Metallurgical Corp of China Ltd had CAPEX/Revenue of 1.4%. Metallurgical Corp of China Ltd showed almost no change in CAPEX/Revenue from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (4.34%) and ROE (8.04%). ROIC increased slightly on 0.75 pp from 3.6% to 4.3% in 2016. ROE decreased slightly on 0.86 pp from 8.9% to 8.0% in 2016.
Leverage (Debt)
Debt level is 5.9x Net Debt / EBITDA and 9.6x Debt / EBITDA. Net Debt / EBITDA dropped on 3.2x from 9.0x to 5.9x in 2016. Debt decreased on 2.3% while cash jumped on 55.8%.
Appendix 1: Peers in Engineering&Construction
Below we provide Metallurgical Corp of China 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 |
|---|
