BAIC Motor Corp Ltd reports 64.6% Net Income decline in 2017 while 15.5% Revenue growth
22/03/2018 • About BAIC Motor Corp Ltd (
$1958) • By InTwits
BAIC Motor Corp Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- BAIC Motor Corp Ltd is a fast growth stock: 2017 revenue growth was 15.5%, 5 year revenue CAGR was 107% at 2017 ROIC 20.3%
- EBITDA Margin is expanding: 17.9% in 2017 vs. 14.2% in 2016 vs. -13.2% in 2013
- EBITDA Margin is quite volatile: 17.9% in 2017, 14.2% in 2016, 9.7% in 2015, 5.4% in 2014, -13.2% in 2013
- BAIC Motor Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.0%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 24,563 in 2017, 38,715 in 2016, 8,691 in 2015, 5,828 in 2014, 1,822 in 2013
- The company has highly profitable business model: ROIC is at 20.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
BAIC Motor Corp Ltd ($1958) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 12,782 | 56,370 | 84,112 | 116,199 | 134,159 | 15.5% |
| Gross Profit | 415 | 8,983 | 15,277 | 26,232 | 35,499 | 35.3% |
| SG&A | 3,291 | 8,697 | 11,693 | 14,528 | 16,462 | 13.3% |
| EBITDA | -1,691 | 3,053 | 8,176 | 16,543 | 24,050 | 45.4% |
| Net Income | 2,714 | 4,511 | 3,319 | 6,367 | 2,253 | -64.6% |
Balance Sheet
|
|---|
| Cash | 16,790 | 21,923 | 23,946 | 36,064 | 36,825 | 2.1% |
| Short Term Debt | 7,833 | 15,983 | 21,280 | 27,570 | 18,478 | -33.0% |
| Long Term Debt | 15,122 | 13,935 | 8,986 | 7,809 | 13,167 | 68.6% |
Cash flow
|
|---|
| Capex | 5,749 | 9,055 | 9,220 | 7,310 | 8,803 | 20.4% |
Ratios
|
|---|
| Revenue growth | 263.2% | 341.0% | 49.2% | 38.1% | 15.5% | |
| EBITDA growth | -600.0% | -280.5% | 167.8% | 102.3% | 45.4% | |
| Gross Margin | 3.2% | 15.9% | 18.2% | 22.6% | 26.5% | 3.9% |
| EBITDA Margin | -13.2% | 5.4% | 9.7% | 14.2% | 17.9% | 3.7% |
| Net Income Margin | 21.2% | 8.0% | 3.9% | 5.5% | 1.7% | -3.8% |
| SG&A, % of revenue | 25.7% | 15.4% | 13.9% | 12.5% | 12.3% | -0.2% |
| CAPEX, % of revenue | 45.0% | 16.1% | 11.0% | 6.3% | 6.6% | 0.3% |
| ROIC | -6.2% | 1.1% | 6.0% | 13.8% | 20.3% | 6.5% |
| ROE | 13.7% | 15.8% | 9.7% | 16.9% | 5.6% | -11.4% |
| Net Debt/EBITDA | | 2.6x | 0.8x | -0.0x | -0.2x | -0.2x |
Revenue and profitability
The company's Revenue jumped on 15.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.
Gross Margin increased on 3.9 pp from 22.6% to 26.5% in 2017. SG&A as a % of Revenue showed almost no change in 2017.
Net Income marign decreased on 3.8 pp from 5.5% to 1.7% in 2017.
Capital expenditures (CAPEX) and working capital investments
BAIC Motor Corp Ltd's CAPEX/Revenue was 6.6% in 2017. The company showed decline in CAPEX/Revenue of 9.5 pp from 16.1% in 2014 to 6.6% in 2017. It's average CAPEX/Revenue for the last three years was 7.9%.
Return on investment
The company operates at good ROIC (20.32%) while ROE is low (5.56%). ROIC increased on 6.5 pp from 13.8% to 20.3% in 2017. ROE dropped on 11.4 pp from 16.9% to 5.6% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 1.3x. Net Debt / EBITDA dropped on 0.2x from -0.041x to -0.2x in 2017. Debt dropped on 10.6% while cash increased on 2.1%.
Appendix 1: Peers in Auto Manufacturers
Below you can find BAIC Motor Corp Ltd benchmarking vs. other companies in Auto Manufacturers 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 |
|---|
| Geely Automobile Holdings Ltd ($175) | 16.6% | -24.3% | 38.6% | 78.3% | |
| Great Wall Motor Co Ltd ($2333) | 31.7% | 10.2% | 21.3% | 29.6% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 3.2% | -9.6% | -11.8% | 5.4% | |
| Dah Chong Hong Holdings Ltd ($1828) | -12.0% | 10.0% | -3.6% | 3.7% | |
| Dongfeng Motor Group Co Ltd ($489) | 511.9% | 123.0% | 52.3% | -3.2% | |
| |
|---|
| Median (6 companies) | 12.7% | 7.5% | 16.0% | 4.5% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Great Wall Motor Co Ltd ($2333) | 25.9% | 25.0% | 22.3% | 21.5% | |
| Geely Automobile Holdings Ltd ($175) | 20.1% | 18.2% | 18.2% | 18.3% | |
| Dongfeng Motor Group Co Ltd ($489) | 12.6% | 13.0% | 13.4% | 14.3% | |
| Dah Chong Hong Holdings Ltd ($1828) | 11.5% | 11.3% | 11.7% | 11.8% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 11.2% | 10.2% | 4.3% | 3.3% | |
| |
|---|
| Median (5 companies) | 13.0% | 13.4% | 14.3% | 14.3% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Great Wall Motor Co Ltd ($2333) | 19.5% | 17.8% | 15.5% | 15.6% | |
| Geely Automobile Holdings Ltd ($175) | 15.8% | 15.9% | 14.4% | 13.6% | |
| Dah Chong Hong Holdings Ltd ($1828) | 4.6% | 4.2% | 3.8% | 3.5% | |
| Dongfeng Motor Group Co Ltd ($489) | -0.9% | 2.7% | 2.4% | 3.2% | |
| Brilliance China Automotive Holdings Ltd ($1114) | -0.9% | -3.2% | -9.7% | -10.1% | |
| |
|---|
| Median (5 companies) | 6.0% | 6.0% | 6.1% | 3.5% | |
|---|
Top companies by CAPEX/Revenue, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Great Wall Motor Co Ltd ($2333) | 13.0% | 12.0% | 8.0% | 7.1% | |
| Dongfeng Motor Group Co Ltd ($489) | 2.2% | 3.8% | 2.5% | 2.3% | |
| Geely Automobile Holdings Ltd ($175) | 3.9% | 5.0% | 5.3% | 1.1% | |
| |
|---|
| Median (3 companies) | 3.2% | 4.0% | 3.9% | 2.3% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Great Wall Motor Co Ltd ($2333) | 32.2% | 25.5% | 22.5% | 25.0% | |
| Geely Automobile Holdings Ltd ($175) | 19.6% | 13.4% | 15.0% | 22.6% | |
| Dah Chong Hong Holdings Ltd ($1828) | 8.5% | 7.7% | 6.2% | 6.3% | |
| Dongfeng Motor Group Co Ltd ($489) | -1.6% | 0.8% | 1.2% | 1.5% | |
| Brilliance China Automotive Holdings Ltd ($1114) | -1.4% | -1.8% | -3.1% | -3.2% | |
| |
|---|
| Median (6 companies) | 4.6% | 4.5% | 6.0% | 6.3% | |
|---|
Top companies by Net Debt / EBITDA
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 2.8x | 3.8x | 3.3x | 3.8x | |
| Great Wall Motor Co Ltd ($2333) | -0.1x | 0.1x | 0.3x | 0.2x | |
| Dongfeng Motor Group Co Ltd ($489) | | 2.3x | -2.1x | -0.4x | |
| Geely Automobile Holdings Ltd ($175) | -0.9x | -1.2x | -1.6x | -1.7x | |
| |
|---|
| Median (4 companies) | 1.9x | 0.8x | 0.3x | -0.1x | |
|---|
