Eye on Great Wall Motor Co Ltd with its long history of healthy growth
31/03/2017 • About Great Wall Motor Co Ltd (
$2333) • By InTwits
Pay attention to Great Wall Motor Co Ltd as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Great Wall Motor Co Ltd showed fast growth in the last financial year. The company's revenue surged on 29.6% in FY2016. The growth also happened in EBITDA of 30.9% for the same period.
In the last 3 years the company showed fast revenue growth of 20.1% from 2013 to 2016 annualy. EBITDA surged on 11.4% from 2013 to 2016 annualy.
Great Wall Motor Co Ltd ($2333) financials for the last 5 years
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 |
|---|
| Revenue | 41,565 | 54,727 | 60,317 | 73,147 | 94,783 |
|---|
| Revenue growth, % | | 31.7% | 10.2% | 21.3% | 29.6% |
|---|
| Gross margin, % | 24.1% | 25.9% | 25.0% | 22.3% | 21.5% |
|---|
| SG&A, % | 5.69% | 5.23% | 5.23% | 5.45% | 4.61% |
|---|
| EBITDA | 7,488 | 10,690 | 10,766 | 11,303 | 14,794 |
|---|
| EBITDA growth, % | | 42.8% | 0.7% | 5.0% | 30.9% |
|---|
| EBITDA margin, % | 18.0% | 19.5% | 17.8% | 15.5% | 15.6% |
|---|
| Net Income | 5,692 | 8,224 | 8,042 | 8,059 | 10,551 |
|---|
| Net Income margin, % | 13.7% | 15.0% | 13.3% | 11.0% | 11.1% |
|---|
| |
| CAPEX | 4,445 | 7,133 | 7,229 | 5,857 | 6,684 |
|---|
| CAPEX/Revenue, % | 10.7% | 13.0% | 12.0% | 8.01% | 7.05% |
|---|
| Debt | 4,393 | 4,791 | 4,214 | 5,914 | 4,570 |
|---|
| Cash | 5,596 | 5,523 | 3,082 | 2,458 | 1,892 |
|---|
| Net Debt/EBITDA | -0.2x | -0.1x | 0.1x | 0.3x | 0.2x |
|---|
| |
| ROIC, % | 27.7% | 32.2% | 25.5% | 22.5% | 25.0% |
|---|
| ROE, % | 29.8% | 33.2% | 26.2% | 22.5% | 24.6% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. The company's EBITDA margin increased slightly on 0.100 pp from 15.5% to 15.6% in 2016. In the last 3 years Great Wall Motor Co Ltd showed big decline in EBITDA margin of 3.90 pp from 19.5% in 2013 to 15.6% in 2016.
Great Wall Motor Co Ltd shows attractive ROIC at 25.0% for the last 12 months which assumes stable development model. Three years ago it was higher at 32.2%. For the last three years the average ROIC was 24.3%.
The company's Net Income margin increased slightly on 0.100 pp from 11% to 11.1% in 2016. In the longer period Net Income margin dropped on 3.90 pp from 15% in 2013 to 11.1% in 2016.
Great Wall Motor Co Ltd operates at ROE of 24.6%. It's average ROE for the last three years was 24.4%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.In FY2016 the company had CAPEX/Revenue of 7.05%. CAPEX/Revenue dropped on 5.98 pp from 13.0% in 2013 to 7.05% in 2016. Average CAPEX/Revenue for the last three years was 9.01%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.2x Net Debt/EBITDA. If we look for the longer period Great Wall Motor Co Ltd's leverage surged on 0.25x from -0.07x in 2013 to 0.18x in 2016.
Peers in Auto Manufacturers
Below we provide Great Wall Motor Co Ltd benchmarking against other companies in Auto Manufacturers 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -95.4% | 511.9% | 123.0% | 52.3% | |
| BAIC Motor Corp Ltd ($1958) | | 263.2% | 341.0% | 49.2% | 38.1% |
| Byd Co Ltd ($1211) | -4.2% | 16.4% | 7.2% | 40.2% | |
| Geely Automobile Holdings Ltd ($175) | | 16.6% | -24.3% | 38.6% | 78.3% |
| Guangzhou Automobile Group Co Ltd ($2238) | 18.0% | 45.2% | 18.9% | 31.4% | |
| |
|---|
| Median (10 companies) | -4.2% | 12.7% | 7.5% | 21.1% | 5.4% |
|---|
| Great Wall Motor Co Ltd ($2333) | | 31.7% | 10.2% | 21.3% | 29.6% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Qingling Motors Co Ltd ($1122) | 12.3% | 15.2% | 15.1% | 18.7% | |
| BAIC Motor Corp Ltd ($1958) | -4.8% | 3.2% | 15.9% | 18.2% | 22.6% |
| Geely Automobile Holdings Ltd ($175) | 18.5% | 20.1% | 18.2% | 18.2% | 18.3% |
| Sinotruk Hong Kong Ltd ($3808) | 14.9% | 16.7% | 16.9% | 17.8% | |
| Byd Co Ltd ($1211) | 11.6% | 13.4% | 13.8% | 15.3% | |
| |
|---|
| Median (10 companies) | 11.6% | 12.0% | 13.4% | 14.3% | 15.0% |
|---|
| Great Wall Motor Co Ltd ($2333) | 24.1% | 25.9% | 25.0% | 22.3% | 21.5% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Geely Automobile Holdings Ltd ($175) | 14.6% | 15.8% | 15.9% | 14.4% | 13.6% |
| Byd Co Ltd ($1211) | 10.2% | 9.6% | 12.0% | 14.2% | |
| Qingling Motors Co Ltd ($1122) | 10.3% | 12.8% | 11.4% | 12.2% | |
| BAIC Motor Corp Ltd ($1958) | 9.6% | -13.2% | 5.4% | 9.7% | 14.2% |
| Sinotruk Hong Kong Ltd ($3808) | 6.6% | 7.4% | 7.8% | 7.5% | |
| |
|---|
| Median (10 companies) | 5.6% | 3.8% | 4.8% | 6.1% | 8.5% |
|---|
| Great Wall Motor Co Ltd ($2333) | 18.0% | 19.5% | 17.8% | 15.5% | 15.6% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 22.7% | 10.1% | 15.7% | 14.7% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 8.9% | 10.1% | 13.4% | 12.5% | |
| BAIC Motor Corp Ltd ($1958) | 132.8% | 45.0% | 16.1% | 11.0% | |
| Byd Co Ltd ($1211) | 13.0% | 11.2% | 4.2% | 5.7% | |
| Geely Automobile Holdings Ltd ($175) | 4.5% | 3.9% | 5.0% | 5.3% | 1.1% |
| |
|---|
| Median (10 companies) | 5.4% | 3.2% | 4.0% | 3.9% | 1.1% |
|---|
| Great Wall Motor Co Ltd ($2333) | 10.7% | 13.0% | 12.0% | 8.0% | 7.1% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Geely Automobile Holdings Ltd ($175) | 16.2% | 19.6% | 13.4% | 15.0% | 22.6% |
| Wuling Motors Holdings Ltd ($305) | 7.2% | 7.7% | 10.0% | 11.8% | |
| Byd Co Ltd ($1211) | 2.7% | 2.5% | 3.9% | 8.5% | |
| Dah Chong Hong Holdings Ltd ($1828) | 11.4% | 8.5% | 7.7% | 6.2% | 6.3% |
| BAIC Motor Corp Ltd ($1958) | 0.6% | -6.2% | 1.1% | 6.0% | 13.9% |
| |
|---|
| Median (10 companies) | 2.6% | 3.0% | 3.9% | 5.9% | 10.1% |
|---|
| Great Wall Motor Co Ltd ($2333) | 27.7% | 32.2% | 25.5% | 22.5% | 25.0% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 2.8x | 3.8x | 3.3x | 3.8x |
| Byd Co Ltd ($1211) | 3.4x | 6.7x | 3.9x | 2.9x | |
| BAIC Motor Corp Ltd ($1958) | 26.0x | | 2.6x | 0.8x | -0.0x |
| Sinotruk Hong Kong Ltd ($3808) | 3.8x | 2.6x | 0.3x | 0.3x | |
| Guangzhou Automobile Group Co Ltd ($2238) | | | 13.2x | 0.3x | |
| |
|---|
| Median (9 companies) | 2.7x | 2.2x | 2.3x | 0.3x | -0.0x |
|---|
| Great Wall Motor Co Ltd ($2333) | -0.2x | -0.1x | 0.1x | 0.3x | 0.2x |
