China Railway Construction Corp Ltd revenue growth accelerated to 6.6% in 2016 vs. 1.3% a year earliner
31/03/2017 • About China Railway Construction Corp Ltd (
$1186) • By InTwits
China Railway Construction Corp Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 5.3% in 2016 vs. 5.5% in 2015 vs. 5.1% in 2012
- China Railway Construction Corp Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's in pair with industry average of 24.8%.
- CAPEX is quite volatile: 29,816 in 2016, 27,144 in 2015, 21,838 in 2014, 17,645 in 2013, 10,500 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Railway Construction Corp Ltd ($1186) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 469,872 | 569,962 | 575,260 | 582,522 | 621,183 | 6.6% |
| Gross Profit | 36,983 | 42,714 | 46,885 | 50,766 | 49,805 | -1.9% |
| SG&A | 14,556 | 16,482 | 16,389 | 16,678 | 17,811 | 6.8% |
| EBITDA | 23,859 | 25,961 | 29,885 | 31,751 | 33,003 | 3.9% |
| Net Income | 8,629 | 10,345 | 11,735 | 12,646 | 14,000 | 10.7% |
Balance Sheet
|
|---|
| Cash | 67,104 | 54,344 | 89,950 | 114,249 | 120,128 | 5.1% |
| Short Term Debt | 73,701 | 82,947 | 96,576 | 107,201 | 71,410 | -33.4% |
| Long Term Debt | 34,402 | 75,019 | 83,763 | 79,964 | 114,821 | 43.6% |
Cash flow
|
|---|
| Capex | 10,500 | 17,645 | 21,838 | 27,144 | 29,816 | 9.8% |
Ratios
|
|---|
| Revenue growth | 6.0% | 21.3% | 0.9% | 1.3% | 6.6% | |
| EBITDA growth | 12.9% | 8.8% | 15.1% | 6.2% | 3.9% | |
| Gross Margin | 7.9% | 7.5% | 8.2% | 8.7% | 8.0% | -0.7% |
| EBITDA Margin | 5.1% | 4.6% | 5.2% | 5.5% | 5.3% | -0.1% |
| Net Income Margin | 1.8% | 1.8% | 2.0% | 2.2% | 2.3% | 0.1% |
| SG&A, % of revenue | 3.1% | 2.9% | 2.8% | 2.9% | 2.9% | 0.0% |
| CAPEX, % of revenue | 2.2% | 3.1% | 3.8% | 4.7% | 4.8% | 0.1% |
| ROIC | 8.1% | 7.3% | 7.0% | 6.6% | 6.2% | -0.4% |
| ROE | 12.6% | 13.5% | 13.5% | 12.4% | 11.4% | -1.0% |
| Net Debt/EBITDA | 1.7x | 4.0x | 3.0x | 2.3x | 2.0x | -0.3x |
China Railway Construction Corp Ltd ($1186) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 115,636 | 146,694 | 156,460 | 202,393 | | | | |
| Net Income | 2,572 | 3,250 | 3,301 | 4,876 | | | | |
Balance Sheet
|
|---|
| Cash | 111,002 | 107,438 | 117,285 | 120,128 | | | | |
| Short Term Debt | 109,955 | 92,662 | 81,165 | 71,410 | | | | |
| Long Term Debt | 91,181 | 106,834 | 115,258 | 114,821 | | | | |
Ratios
|
|---|
| Gross Margin | 8.2% | 9.1% | 8.6% | 6.7% | | | | |
| Net Income Margin | 2.2% | 2.2% | 2.1% | 2.4% | | | | |
Revenue and profitability
China Railway Construction Corp Ltd's Revenue increased on 6.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.67 pp from 16.3% to 17.0% in 2016.
Gross Margin decreased slightly on 0.70 pp from 8.7% to 8.0% 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 the company had CAPEX/Revenue of 4.8%. CAPEX/Revenue increased slightly on 1.7 pp from 3.1% in 2013 to 4.8% in 2016. Average CAPEX/Revenue for the last three years was 4.4%.The company invested a large share of EBITDA (90.3%) to CAPEX.
Return on investment
The company operates at low ROIC (6.21%) and ROE (11.41%). ROIC showed almost no change in 2016. ROE decreased slightly on 0.96 pp from 12.4% to 11.4% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 5.6x. Net Debt / EBITDA dropped on 0.3x from 2.3x to 2.0x in 2016. Debt showed almost no change in 2016 while cash increased on 5.1%.
Appendix 1: Peers in Engineering&Construction
Below we provide China Railway Construction Corp 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 |
|---|
