Aluminum Corp of China Ltd revenue growth accelerated to 24.9% in 2017 vs. 17.2% a year earliner
22/03/2018 • About Aluminum Corp of China Ltd (
$2600) • By InTwits
Aluminum Corp of China Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 8.1% in 2017, 8.8% in 2016, 4.4% in 2015, -2.4% in 2014, 7.5% in 2013
- Aluminum Corp of China Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 0.93 in 2017, 0.80 in 2016, 44,757 in 2015, 44,005 in 2014, 20,932 in 2013
- The company has potentially unprofitable business model: ROIC is at 4.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 5.1x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Aluminum Corp of China Ltd ($2600) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 169,431 | 142,000 | 123,095 | 144,229 | 180,081 | 24.9% |
| Gross Profit | 2,751 | 671 | 3,881 | 10,555 | 14,406 | 36.5% |
| SG&A | 4,304 | 6,151 | 3,602 | 5,254 | 6,687 | 27.3% |
| EBITDA | 12,725 | -3,382 | 5,356 | 12,731 | 14,626 | 14.9% |
| Net Income | 975 | -16,208 | 149 | 368 | 1,378 | 274.2% |
Balance Sheet
|
|---|
| Cash | 11,382 | 16,269 | 20,807 | 23,814 | 27,751 | 16.5% |
| Short Term Debt | 73,348 | 75,359 | 63,246 | 58,459 | 62,753 | 7.3% |
| Long Term Debt | 46,295 | 44,769 | 54,001 | 47,323 | 40,290 | -14.9% |
Cash flow
|
|---|
| Capex | 8,519 | 8,334 | 9,372 | 6,264 | 8,897 | 42.0% |
Ratios
|
|---|
| Revenue growth | 18.1% | -16.2% | -13.3% | 17.2% | 24.9% | |
| EBITDA growth | 1,755.2% | -126.6% | -258.4% | 137.7% | 14.9% | |
| Gross Margin | 1.6% | 0.5% | 3.2% | 7.3% | 8.0% | 0.7% |
| EBITDA Margin | 7.5% | -2.4% | 4.4% | 8.8% | 8.1% | -0.7% |
| Net Income Margin | 0.6% | -11.4% | 0.1% | 0.3% | 0.8% | 0.5% |
| SG&A, % of revenue | 2.5% | 4.3% | 2.9% | 3.6% | 3.7% | 0.1% |
| CAPEX, % of revenue | 5.0% | 5.9% | 7.6% | 4.3% | 4.9% | 0.6% |
| ROIC | 3.3% | -6.4% | -1.2% | 3.6% | 4.6% | 1.0% |
| ROE | 2.2% | -44.6% | 0.4% | 0.9% | 3.6% | 2.6% |
| Net Debt/EBITDA | 8.5x | | 18.0x | 6.4x | 5.1x | -1.3x |
Aluminum Corp of China Ltd ($2600) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 40,653 | 50,138 | 48,339 | 39,839 | 94.5% | 73.6% | 16.0% | -23.3% |
| Net Income | 383 | 354 | 600 | 23 | 2,025.3% | 609.2% | 965.3% | -90.7% |
Balance Sheet
|
|---|
| Cash | 24,669 | 18,183 | 18,092 | 27,751 | 60.4% | -2.9% | -29.3% | 16.5% |
| Short Term Debt | 56,087 | 68,966 | 62,331 | 60,504 | 3.5% | 9.4% | 10.2% | 0.7% |
| Long Term Debt | 42,615 | 35,340 | 35,223 | 40,290 | -10.5% | -24.0% | -17.6% | -14.9% |
Ratios
|
|---|
| Gross Margin | 7.0% | 5.8% | 8.5% | 9.5% | 0.2% | -2.3% | 3.1% | 1.8% |
| Net Income Margin | 0.9% | 0.7% | 1.2% | 0.1% | 0.9% | 0.5% | 1.1% | -0.4% |
Revenue and profitability
The company's Revenue jumped on 24.9%. Revenue growth showed slow down in 17Q4 - it was -23.3% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.
Gross Margin increased slightly on 0.68 pp from 7.3% to 8.0% in 2017. SG&A as a % of Revenue showed almost no change in 2017.
Net Income marign increased slightly on 0.51 pp from 0.26% to 0.77% in 2017.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.9% in 2017. The company's CAPEX/Revenue decreased slightly on 0.93 pp from 5.9% in 2014 to 4.9% in 2017. For the last three years the average CAPEX/Revenue was 5.6%.The company invested a big chunk of EBITDA (60.8%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (4.60%) and ROE (3.55%). ROIC increased slightly on 1.0 pp from 3.6% to 4.6% in 2017. ROE increased on 2.6 pp from 0.94% to 3.6% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.1x and Debt / EBITDA is 7.0x. Net Debt / EBITDA dropped on 1.3x from 6.4x to 5.1x in 2017. Debt decreased on 2.6% while cash jumped on 16.5%.
Appendix 1: Peers in Mining
Below you can find Aluminum Corp of China Ltd benchmarking vs. other companies in Mining 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Dynamics Holdings Ltd ($476) | 81.4% | -73.9% | -72.2% | 1,640.2% | |
| Mongolia Energy Corp Ltd ($276) | 89.7% | -95.8% | 2,361.6% | 1,178.3% | |
| China Kingstone Mining Holdings Ltd ($1380) | -55.6% | 155.2% | -79.8% | 234.0% | |
| Hengxing Gold Holding Co Ltd ($2303) | | 3,467.3% | 78.0% | 157.6% | |
| China Silver Group Ltd ($815) | -2.1% | 1.0% | 12.1% | 139.5% | |
| |
|---|
| Median (29 companies) | -1.2% | -5.1% | -20.8% | 6.1% | 34.3% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 5.1% | 39.6% | 93.0% | 87.4% | |
| REX Global Entertainment Holdings Ltd ($164) | -7.8% | -0.8% | 88.6% | 87.3% | |
| Grand T G Gold Holdings Ltd ($8299) | | | 57.3% | 59.0% | |
| Sun International Resources Ltd ($8029) | 73.1% | 64.8% | 69.4% | 58.8% | |
| Kaz Minerals ($847) | 41.1% | 46.1% | 35.5% | 46.1% | |
| |
|---|
| Median (23 companies) | 14.0% | 15.4% | 15.5% | 24.0% | 3.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Grand T G Gold Holdings Ltd ($8299) | | | 53.7% | 58.9% | |
| Kaz Minerals ($847) | 51.5% | 29.1% | 21.4% | 39.4% | |
| MMG Ltd ($1208) | 29.9% | 31.4% | 24.5% | 37.7% | |
| Hengshi Mining Investments Ltd ($1370) | 52.0% | 45.4% | 35.3% | 36.6% | |
| Midas Holdings Ltd ($1021) | 22.2% | 23.7% | 22.0% | 29.6% | |
| |
|---|
| Median (23 companies) | 7.8% | 5.2% | 5.1% | 11.5% | 5.8% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Polymetallic Mining Ltd ($2133) | 43.3% | 54.7% | 35.1% | 387.1% | |
| Kaz Minerals ($847) | 136.5% | 168.8% | 168.7% | 41.9% | |
| MMG Ltd ($1208) | 22.6% | 41.9% | 100.4% | 31.0% | |
| Mongolia Energy Corp Ltd ($276) | 1,061.7% | 30,555.4% | 1,973.0% | 20.9% | |
| Midas Holdings Ltd ($1021) | 75.1% | 47.3% | 31.3% | 19.8% | |
| |
|---|
| Median (16 companies) | 16.8% | 15.8% | 12.1% | 7.0% | 1.7% |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Silver Group Ltd ($815) | 31.6% | 35.8% | -0.2% | 21.7% | |
| United Co RUSAL PLC ($486) | -9.0% | 6.3% | 12.3% | 9.0% | |
| Hengshi Mining Investments Ltd ($1370) | 60.1% | 20.7% | 7.9% | 7.9% | |
| Zijin Mining Group Co Ltd ($2899) | 9.2% | 6.5% | 2.6% | 7.1% | |
| Grand T G Gold Holdings Ltd ($8299) | | -4.6% | 5.3% | 6.4% | |
| |
|---|
| Median (31 companies) | 2.7% | 0.8% | -1.1% | 1.9% | 7.6% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| MMG Ltd ($1208) | 2.0x | 10.2x | 20.2x | 10.4x | |
| Kaz Minerals ($847) | 2.9x | 5.5x | 18.7x | 8.8x | |
| Grand T G Gold Holdings Ltd ($8299) | | | 9.6x | 8.2x | |
| Midas Holdings Ltd ($1021) | 6.5x | 8.7x | 8.0x | 8.1x | |
| Zhaojin Mining Industry Co Ltd ($1818) | 4.3x | 4.7x | 6.5x | 6.5x | |
| |
|---|
| Median (15 companies) | 1.9x | 4.4x | 3.8x | 4.4x | 2.7x |
|---|
