Zhejiang Expressway Co reports 6.0% EBITDA growth in 2017 while 1.1% Revenue decline
16/03/2018 • About Zhejiang Expressway Co (
$576) • By InTwits
Zhejiang Expressway Co reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 75.0% in 2017 vs. 69.9% in 2016 vs. 51.1% in 2013
- Zhejiang Expressway Co has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: 292 in 2017, 481 in 2016, 327 in 2015, 1,270 in 2014, 252 in 2013
- The company has business model with average profitability: ROIC is at 11.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is 2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zhejiang Expressway Co ($576) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 7,851 | 9,460 | 12,507 | 9,735 | 9,626 | -1.1% |
| Gross Profit | 2,896 | 3,562 | 5,447 | 5,139 | 4,970 | -3.3% |
| SG&A | 85 | 106 | 109 | 82 | 98 | 20.6% |
| EBITDA | 4,009 | 5,064 | 7,258 | 6,805 | 7,215 | 6.0% |
| Net Income | 1,907 | 2,265 | 2,990 | 3,037 | 3,202 | 5.4% |
Balance Sheet
|
|---|
| Cash | 1,807 | 3,357 | 4,983 | 7,199 | 5,589 | -22.4% |
| Short Term Debt | 1,850 | 10,813 | 10,979 | 18,131 | 13,006 | -28.3% |
| Long Term Debt | 300 | 3,160 | 9,190 | 6,700 | 11,631 | 73.6% |
Cash flow
|
|---|
| Capex | 252 | 1,270 | 327 | 481 | 292 | -39.4% |
Ratios
|
|---|
| Revenue growth | 13.3% | 20.5% | 32.2% | -22.2% | -1.1% | |
| EBITDA growth | 16.7% | 26.3% | 43.3% | -6.2% | 6.0% | |
| Gross Margin | 36.9% | 37.7% | 43.6% | 52.8% | 51.6% | -1.2% |
| EBITDA Margin | 51.1% | 53.5% | 58.0% | 69.9% | 75.0% | 5.0% |
| Net Income Margin | 24.3% | 23.9% | 23.9% | 31.2% | 33.3% | 2.1% |
| SG&A, % of revenue | 1.1% | 1.1% | 0.9% | 0.8% | 1.0% | 0.2% |
| CAPEX, % of revenue | 3.2% | 13.4% | 2.6% | 4.9% | 3.0% | -1.9% |
| ROIC | 13.3% | 13.2% | 15.3% | 11.9% | 11.2% | -0.7% |
| ROE | 11.9% | 13.7% | 17.7% | 17.3% | 16.4% | -0.9% |
| Net Debt/EBITDA | 0.1x | 2.1x | 2.1x | 2.6x | 2.6x | 0.0x |
Revenue and profitability
Zhejiang Expressway Co's Revenue decreased slightly on 1.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.0 pp from 69.9% to 75.0% in 2017.
Gross Margin decreased slightly on 1.2 pp from 52.8% to 51.6% in 2017. SG&A as a % of Revenue showed almost no change in 2017.
Net Income marign increased on 2.1 pp from 31.2% to 33.3% in 2017.
Capital expenditures (CAPEX) and working capital investments
Zhejiang Expressway Co's CAPEX/Revenue was 3.0% in 2017. Zhejiang Expressway Co showed big decline in CAPEX/Revenue of 10.4 pp from 13.4% in 2014 to 3.0% in 2017. Average CAPEX/Revenue for the last three years was 3.5%.
Return on investment
The company operates at good ROE (16.43%) while ROIC is low (11.15%). ROIC decreased slightly on 0.73 pp from 11.9% to 11.2% in 2017. ROE decreased slightly on 0.90 pp from 17.3% to 16.4% in 2017.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 3.4x Debt / EBITDA. Net Debt / EBITDA increased on 0.049x from 2.6x to 2.6x in 2017. Debt decreased slightly on 0.78% while cash dropped on 22.4%.
Appendix 1: Peers in Industrial Transportation
Below we provide Zhejiang Expressway Co benchmarking against other companies in Industrial Transportation 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.
