Industrial & Commercial Bank of China Ltd revenue started to decline in 2016: decreased 6.8% vs. 4.6% growth a year earliner
30/03/2017 • About Industrial & Commercial Bank of China Ltd (
$1398) • By InTwits
Industrial & Commercial Bank of China Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Industrial & Commercial Bank of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's a lot of higher than industry average of 2.3%.
- The company has business model with low profitability: ROIC is at 7.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Industrial & Commercial Bank of China Ltd ($1398) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 842,571 | 915,094 | 1,005,230 | 1,051,953 | 980,469 | -6.8% |
| Net Income | 238,532 | 262,649 | 275,811 | 277,131 | 278,249 | 0.4% |
Balance Sheet
|
|---|
| Cash | 3,174,943 | 3,294,007 | 3,523,622 | 3,059,633 | 3,350,788 | 9.5% |
| Short Term Debt | 1,487,938 | 1,269,979 | 1,539,870 | 2,266,070 | 2,017,344 | -11.0% |
| Long Term Debt | 232,186 | 253,018 | 279,590 | 306,622 | 357,937 | 16.7% |
Cash flow
|
|---|
| Capex | 31,852 | 44,427 | 53,957 | 42,297 | 39,281 | -7.1% |
Ratios
|
|---|
| Revenue growth | 19.4% | 8.6% | 9.8% | 4.6% | -6.8% | |
| Net Income Margin | 28.3% | 28.7% | 27.4% | 26.3% | 28.4% | 2.0% |
| CAPEX, % of revenue | 3.8% | 4.9% | 5.4% | 4.0% | 4.0% | -0.0% |
| ROIC | 9.9% | 10.2% | 9.9% | 8.1% | 7.1% | -1.0% |
| ROE | 22.9% | 21.9% | 19.7% | 16.7% | 15.2% | -1.5% |
Industrial & Commercial Bank of China Ltd ($1398) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 254,916 | 243,972 | 238,370 | 243,211 | | | | |
| Net Income | 74,764 | 75,453 | 72,575 | 55,457 | | | | |
Balance Sheet
|
|---|
| Cash | 3,323,225 | 3,331,693 | 3,302,564 | 3,350,788 | | | | |
| Short Term Debt | 2,049,716 | 2,245,643 | 1,877,657 | 2,017,344 | | | | |
| Long Term Debt | 311,938 | 320,772 | 338,651 | 357,937 | | | | |
Ratios
|
|---|
| Net Income Margin | 29.3% | 30.9% | 30.4% | 22.8% | | | | |
Revenue and profitability
Industrial & Commercial Bank of China Ltd's Revenue decreased on 6.8%.
Net Income marign increased on 2.0 pp from 26.3% to 28.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Industrial & Commercial Bank of China Ltd had CAPEX/Revenue of 4.0%. CAPEX/Revenue decreased slightly on 0.85 pp from 4.9% in 2013 to 4.0% in 2016. For the last three years the average CAPEX/Revenue was 4.5%.
Return on investment
The company operates at good ROE (15.15%) while ROIC is low (7.09%). ROIC decreased slightly on 0.99 pp from 8.1% to 7.1% in 2016. ROE decreased slightly on 1.5 pp from 16.7% to 15.2% in 2016.
Leverage (Debt)
Debt decreased on 7.7% while cash increased on 9.5%.
Appendix 1: Peers in Banks
Below you can find Industrial & Commercial Bank of China Ltd benchmarking vs. other companies in Banks industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | | 43.4% | 6.8% | 116.4% | |
| Huishang Bank Corp Ltd ($3698) | | 22.8% | 24.3% | 24.6% | 17.3% |
| Shengjing Bank Co Ltd ($2066) | | 36.3% | 40.1% | 24.3% | 17.5% |
| Bank of Chongqing Co Ltd ($1963) | | 26.6% | 28.4% | 18.5% | |
| BOC Hong Kong Holdings Ltd ($2388) | 15.1% | 11.4% | -3.0% | 11.6% | |
| |
|---|
| Median (14 companies) | 36.7% | 12.1% | 23.6% | 4.8% | -3.3% |
|---|
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | 4.1% | 29.9% | 27.0% | 33.5% | |
| |
|---|
| Median (1 company) | 4.1% | 29.9% | 27.0% | 33.5% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dah Sing Banking Group Ltd ($2356) | 3.9% | 4.1% | 2.2% | 7.5% | |
| Dah Sing Financial Holdings Ltd ($440) | 3.0% | 3.4% | 1.7% | 5.9% | |
| Harbin Bank Co Ltd ($6138) | 19.8% | 9.9% | 6.5% | 5.8% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 4.0% | 4.3% | 4.8% | 4.4% | 2.0% |
| Shengjing Bank Co Ltd ($2066) | 1.6% | 2.2% | 5.0% | 3.0% | 2.3% |
| |
|---|
| Median (14 companies) | 2.6% | 2.9% | 1.8% | 2.5% | 1.8% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hang Seng Bank Ltd ($11) | 8.6% | 9.5% | 9.0% | 8.3% | 8.1% |
| Chong Hing Bank Ltd ($1111) | 5.5% | 5.2% | 16.4% | 5.7% | 5.6% |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 6.3% | 5.7% | 5.2% | 4.3% | 4.1% |
| Huishang Bank Corp Ltd ($3698) | 8.4% | 6.8% | 5.8% | 4.3% | 4.0% |
| Shengjing Bank Co Ltd ($2066) | 6.0% | 6.6% | 5.3% | 3.5% | 2.3% |
| |
|---|
| Median (12 companies) | 6.0% | 6.2% | 5.4% | 4.3% | 3.1% |
|---|
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -66.3x | -7.1x | -10.6x | -5.7x | |
| |
|---|
| Median (1 company) | -66.3x | -7.1x | -10.6x | -5.7x | |
|---|
