China Agri-Industries Holdings Ltd EBITDA jumped on 31.5% while Revenue decreased on 5.4%
29/03/2017 • About China Agri-Industries Holdings Ltd (
$606) • By InTwits
China Agri-Industries Holdings Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Agri-Industries Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. 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 potentially unprofitable business model: ROIC is at 2.9%
- It operates with high leverage: Net Debt/EBITDA is 7.0x while industry average is 5.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Agri-Industries Holdings Ltd ($606) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 91,319 | 94,543 | 93,239 | 82,548 | 78,049 | -5.4% |
| Gross Profit | 5,864 | 5,703 | 4,329 | 4,286 | 4,909 | 14.5% |
| SG&A | 4,631 | 5,130 | 5,289 | 4,845 | 3,810 | -21.4% |
| EBITDA | 3,383 | 2,569 | 1,613 | 2,523 | 3,317 | 31.5% |
| Net Income | 1,228 | 1,568 | -775 | -333 | 1,419 | |
Balance Sheet
|
|---|
| Cash | 9,387 | 13,944 | 12,551 | 5,439 | 7,586 | 39.5% |
| Short Term Debt | 26,434 | 30,233 | 33,754 | 25,848 | 29,046 | 12.4% |
| Long Term Debt | 5,755 | 3,157 | 1,047 | 1,794 | 1,596 | -11.0% |
Cash flow
|
|---|
| Capex | 4,912 | 3,298 | 1,879 | 1,594 | 1,432 | -10.1% |
Ratios
|
|---|
| Revenue growth | 10.9% | 3.5% | -1.4% | -11.5% | -5.4% | |
| EBITDA growth | -22.7% | -24.1% | -37.2% | 56.4% | 31.5% | |
| Gross Margin | 6.4% | 6.0% | 4.6% | 5.2% | 6.3% | 1.1% |
| EBITDA Margin | 3.7% | 2.7% | 1.7% | 3.1% | 4.2% | 1.2% |
| Net Income Margin | 1.3% | 1.7% | -0.8% | -0.4% | 1.8% | 2.2% |
| SG&A, % of revenue | 5.1% | 5.4% | 5.7% | 5.9% | 4.9% | -1.0% |
| CAPEX, % of revenue | 5.4% | 3.5% | 2.0% | 1.9% | 1.8% | -0.1% |
| ROIC | 3.5% | 1.8% | -0.1% | 1.3% | 2.9% | 1.6% |
| ROE | 5.0% | 5.6% | -2.7% | -1.2% | 5.4% | 6.6% |
| Net Debt/EBITDA | 6.7x | 7.6x | 13.8x | 8.8x | 7.0x | -1.8x |
Revenue and profitability
The company's Revenue decreased on 5.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 3.1% to 4.2% in 2016.
Gross Margin increased slightly on 1.1 pp from 5.2% to 6.3% in 2016. SG&A as a % of Revenue decreased slightly on 0.99 pp from 5.9% to 4.9% in 2016.
Net Income marign increased on 2.2 pp from -0.40% to 1.8% in 2016.
Capital expenditures (CAPEX) and working capital investments
China Agri-Industries Holdings Ltd's CAPEX/Revenue was 1.8% in 2016. China Agri-Industries Holdings Ltd's CAPEX/Revenue decreased slightly on 1.7 pp from 3.5% in 2013 to 1.8% in 2016. Average CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at low ROIC (2.93%) and ROE (5.40%). ROIC increased slightly on 1.6 pp from 1.3% to 2.9% in 2016. ROE increased on 6.6 pp from -1.2% to 5.4% in 2016.
Leverage (Debt)
Debt level is 7.0x Net Debt / EBITDA and 9.2x Debt / EBITDA. Net Debt / EBITDA dropped on 1.8x from 8.8x to 7.0x in 2016. Debt jumped on 10.9% while cash jumped on 39.5%.
Valuation
The company's trades at EV/EBITDA 13.1x and P/E 14.3x while industy averages are 17.8x and 21.9x. China Agri-Industries Holdings Ltd's EV/(EBITDA-CAPEX) is 23.0x with the industry average at 22.8x.
Appendix 1: Peers in Agriculture
Below we provide China Agri-Industries Holdings Ltd benchmarking against other companies in Agriculture 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Putian Food Holdings Ltd ($1699) | 11.7% | 7.9% | -0.3% | 5.7% | |
| Cypress Jade Agricultural Holdings Ltd ($875) | 1,594.6% | 0.2% | -61.3% | -2.5% | |
| CP Pokphand Co Ltd ($43) | | 9.2% | 1.7% | -6.9% | 3.0% |
| Chaoda Modern Agriculture Holdings Ltd ($682) | | -27.8% | -36.0% | -9.8% | -15.0% |
| |
|---|
| Median (4 companies) | 803.2% | 4.1% | -18.2% | -4.7% | -6.0% |
|---|
| China Agri-Industries Holdings Ltd ($606) | | 3.5% | -1.4% | -11.5% | -5.4% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Putian Food Holdings Ltd ($1699) | 25.8% | 25.9% | 23.0% | 19.6% | |
| CP Pokphand Co Ltd ($43) | 13.6% | 12.7% | 15.5% | 17.6% | 17.7% |
| Cypress Jade Agricultural Holdings Ltd ($875) | 32.8% | 30.6% | -19.2% | 3.4% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | -7.8% | -6.2% | -18.6% | -29.1% | -45.8% |
| |
|---|
| Median (4 companies) | 19.7% | 19.3% | -1.5% | 10.5% | -14.1% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 6.4% | 6.0% | 4.6% | 5.2% | 6.3% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cypress Jade Agricultural Holdings Ltd ($875) | 1.9% | -5.7% | -68.5% | 13.2% | |
| CP Pokphand Co Ltd ($43) | 7.6% | 6.1% | 8.0% | 9.9% | 10.1% |
| China Putian Food Holdings Ltd ($1699) | 20.1% | 20.7% | 16.1% | 9.2% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | -130.5% | -101.7% | -79.4% | -458.9% | -321.5% |
| |
|---|
| Median (4 companies) | 4.7% | 0.2% | -30.2% | 9.5% | -155.7% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 3.7% | 2.7% | 1.7% | 3.1% | 4.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Putian Food Holdings Ltd ($1699) | 18.8% | 26.8% | 9.0% | 16.7% | |
| Cypress Jade Agricultural Holdings Ltd ($875) | 17.7% | 16.2% | 14.6% | 13.1% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | 52.1% | 10.9% | 19.2% | 12.4% | 8.6% |
| CP Pokphand Co Ltd ($43) | 3.6% | 5.2% | 5.9% | 6.5% | |
| |
|---|
| Median (4 companies) | 18.2% | 13.6% | 11.8% | 12.8% | 8.6% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 5.4% | 3.5% | 2.0% | 1.9% | 1.8% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CP Pokphand Co Ltd ($43) | 19.7% | 13.5% | 15.2% | 16.7% | 16.2% |
| China Putian Food Holdings Ltd ($1699) | 27.8% | 20.4% | 11.4% | 5.0% | |
| Cypress Jade Agricultural Holdings Ltd ($875) | -15.4% | -17.7% | -52.2% | -0.1% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | -20.2% | -16.8% | -11.6% | -56.2% | -62.7% |
| |
|---|
| Median (4 companies) | 2.2% | -1.6% | -0.1% | 2.4% | -23.3% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 3.5% | 1.8% | -0.1% | 1.3% | 2.9% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cypress Jade Agricultural Holdings Ltd ($875) | 1.3x | | | 6.2x | |
| China Putian Food Holdings Ltd ($1699) | 0.1x | 1.1x | 2.0x | 5.2x | |
| CP Pokphand Co Ltd ($43) | 1.0x | 1.8x | 1.9x | 1.6x | 2.2x |
| |
|---|
| Median (3 companies) | 1.0x | 1.5x | 1.9x | 5.2x | 2.2x |
|---|
| China Agri-Industries Holdings Ltd ($606) | 6.7x | 7.6x | 13.8x | 8.8x | 7.0x |
