China Shenhua Energy Co Ltd Net Income surged on 91.9% and EBITDA Margin increased on 2.1 pp from 38.6% to 40.7%
23/03/2018 • About China Shenhua Energy Co Ltd (
$1088) • By InTwits
China Shenhua Energy Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Shenhua Energy Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.5%. At the same time it's a lot of higher than industry average of 12.1%.
- CAPEX is quite volatile: 20,268 in 2017, 29,058 in 2016, 29,876 in 2015, 45,151 in 2014, 51,665 in 2013
- The company has highly profitable business model: ROIC is at 15.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Shenhua Energy Co Ltd ($1088) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 283,797 | 253,081 | 171,236 | 183,127 | 248,746 | 35.8% |
| Gross Profit | 81,366 | 74,972 | 60,809 | 58,284 | 88,286 | 51.5% |
| SG&A | 10,118 | 9,629 | 17,507 | 9,033 | 10,068 | 11.5% |
| EBITDA | 89,715 | 86,436 | 58,112 | 70,762 | 101,310 | 43.2% |
| Net Income | 45,079 | 39,301 | 16,144 | 24,910 | 47,795 | 91.9% |
Balance Sheet
|
|---|
| Cash | 38,332 | 35,962 | 43,239 | 41,188 | 71,872 | 74.5% |
| Short Term Debt | 48,485 | 28,435 | 20,283 | 32,203 | 24,392 | -24.3% |
| Long Term Debt | 42,042 | 69,552 | 88,785 | 73,778 | 70,806 | -4.0% |
Cash flow
|
|---|
| Capex | 51,665 | 45,151 | 29,876 | 29,058 | 20,268 | -30.2% |
Ratios
|
|---|
| Revenue growth | 11.5% | -10.8% | -32.3% | 6.9% | 35.8% | |
| EBITDA growth | -1.0% | -3.7% | -32.8% | 21.8% | 43.2% | |
| Gross Margin | 28.7% | 29.6% | 35.5% | 31.8% | 35.5% | 3.7% |
| EBITDA Margin | 31.6% | 34.2% | 33.9% | 38.6% | 40.7% | 2.1% |
| Net Income Margin | 15.9% | 15.5% | 9.4% | 13.6% | 19.2% | 5.6% |
| SG&A, % of revenue | 3.6% | 3.8% | 10.2% | 4.9% | 4.0% | -0.9% |
| CAPEX, % of revenue | 18.2% | 17.8% | 17.4% | 15.9% | 8.1% | -7.7% |
| ROIC | 17.4% | 14.6% | 7.7% | 9.4% | 15.4% | 5.9% |
| ROE | 16.7% | 13.6% | 5.4% | 8.1% | 15.4% | 7.3% |
| Net Debt/EBITDA | 0.6x | 0.7x | 1.1x | 0.9x | 0.2x | -0.7x |
China Shenhua Energy Co Ltd ($1088) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 58,568 | 57,080 | 59,644 | 66,211 | 48.6% | 45.2% | 34.2% | 13.5% |
| Net Income | 12,235 | 12,080 | 11,334 | 9,185 | 158.1% | 98.5% | 51.5% | 46.7% |
Balance Sheet
|
|---|
| Cash | 89,900 | 89,310 | 71,530 | 71,872 | 73.1% | 34.9% | -13.0% | 74.5% |
| Short Term Debt | 38,664 | 30,391 | 17,271 | 24,392 | 205.7% | 142.2% | -50.2% | -24.3% |
| Long Term Debt | 71,805 | 73,613 | 75,201 | 70,806 | -23.1% | -23.1% | -0.9% | -4.0% |
Ratios
|
|---|
| Gross Margin | 39.4% | 39.7% | 38.8% | 36.3% | 7.6% | 5.2% | -0.9% | 8.9% |
| Net Income Margin | 20.9% | 21.2% | 19.0% | 13.9% | 8.9% | 5.7% | 2.2% | 3.1% |
Revenue and profitability
China Shenhua Energy Co Ltd's Revenue jumped on 35.8%. Revenue growth showed slow down in 17Q4 - it was 13.5% YoY. 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 increased on 3.7 pp from 31.8% to 35.5% in 2017. SG&A as a % of Revenue decreased slightly on 0.89 pp from 4.9% to 4.0% in 2017.
Net Income marign increased on 5.6 pp from 13.6% to 19.2% in 2017.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.1% in 2017. China Shenhua Energy Co Ltd's CAPEX/Revenue decreased on 9.7 pp from 17.8% in 2014 to 8.1% in 2017. It's average CAPEX/Revenue for the last three years was 13.8%.
Return on investment
The company operates at good ROIC (15.37%) and ROE (15.36%). ROIC increased on 5.9 pp from 9.4% to 15.4% in 2017. ROE increased on 7.3 pp from 8.1% to 15.4% in 2017.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 0.9x to 0.2x in 2017. Debt dropped on 10.2% while cash jumped on 74.5%.
Appendix 1: Peers in Coal
Below you can find China Shenhua Energy Co Ltd benchmarking vs. other companies in Coal 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 |
|---|
| Kaisun Energy Group Ltd ($8203) | -54.4% | -86.1% | -49.4% | 88.6% | |
| Mongolian Mining Corp ($975) | -7.8% | -24.9% | -69.7% | 20.6% | |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | -23.1% | 2.2% | -22.9% | 15.7% | |
| Sino Resources Group Ltd ($223) | -44.8% | 14.7% | 354.5% | 0.4% | |
| China Coal Energy Co Ltd ($1898) | -5.7% | -14.2% | -16.1% | -0.9% | |
| |
|---|
| Median (11 companies) | -8.6% | -9.8% | -22.9% | -6.6% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Nan Nan Resources Enterprise Ltd ($1229) | 17.6% | 18.1% | 44.3% | 41.0% | |
| China Coal Energy Co Ltd ($1898) | 13.8% | 10.2% | 6.9% | 31.3% | |
| Agritrade Resources Ltd ($1131) | 29.4% | 31.8% | 30.0% | 30.9% | |
| Sino Resources Group Ltd ($223) | 1.4% | 2.9% | 3.0% | 7.1% | |
| Asia Coal Ltd ($835) | 62.6% | 76.7% | 5.8% | 5.3% | |
| |
|---|
| Median (7 companies) | 17.3% | 9.4% | 2.9% | 7.1% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Agritrade Resources Ltd ($1131) | 37.3% | 33.4% | 31.1% | 56.3% | |
| Nan Nan Resources Enterprise Ltd ($1229) | 14.1% | -0.2% | 40.5% | 24.1% | |
| China Coal Energy Co Ltd ($1898) | 14.7% | 11.2% | 11.9% | 20.1% | |
| Mongolian Mining Corp ($975) | 20.3% | -14.6% | -66.7% | 4.1% | |
| Sino Resources Group Ltd ($223) | -84.1% | -55.7% | -19.6% | -20.9% | |
| |
|---|
| Median (7 companies) | -4.3% | -8.6% | -18.0% | 4.1% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Agritrade Resources Ltd ($1131) | 13.8% | 28.3% | 26.0% | 38.1% | |
| Siberian Mining Group Co Ltd ($1142) | 78.8% | 217.3% | 279.7% | 23.0% | |
| China Coal Energy Co Ltd ($1898) | 30.8% | 27.9% | 19.3% | 15.4% | |
| Asia Coal Ltd ($835) | 25.8% | 111.0% | 0.3% | 7.0% | |
| Nan Nan Resources Enterprise Ltd ($1229) | 0.6% | 4.6% | 1.3% | 3.7% | |
| |
|---|
| Median (6 companies) | 26.0% | 20.5% | 19.3% | 11.2% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Agritrade Resources Ltd ($1131) | 5.8% | 6.4% | 6.9% | 9.4% | |
| China Coal Energy Co Ltd ($1898) | 4.0% | 1.3% | 0.0% | 2.6% | |
| Nan Nan Resources Enterprise Ltd ($1229) | 1.6% | -1.2% | 10.0% | 1.5% | |
| Mongolian Mining Corp ($975) | 1.3% | -6.2% | -8.8% | -2.5% | |
| Siberian Mining Group Co Ltd ($1142) | -8.8% | -35.4% | -5.9% | -7.8% | |
| |
|---|
| Median (12 companies) | -2.1% | -5.2% | -5.7% | -2.5% | |
|---|
Top companies by Net Debt / EBITDA
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Mongolian Mining Corp ($975) | 10.8x | | | 154.4x | |
| China Coal Energy Co Ltd ($1898) | 4.9x | 9.7x | 14.4x | 7.2x | |
| Agritrade Resources Ltd ($1131) | 1.4x | 0.6x | 0.4x | 0.8x | |
| Nan Nan Resources Enterprise Ltd ($1229) | -2.8x | | -1.8x | -1.8x | |
| |
|---|
| Median (4 companies) | 4.7x | 4.7x | 7.5x | 4.0x | |
|---|
