China Petroleum & Chemical Corp revenue jumped on 35.4% while EBITDA Margin decreased slightly on 1.4 pp from 9.5% to 8.1%
25/03/2018 • About China Petroleum & Chemical Corp (
$386) • By InTwits
China Petroleum & Chemical Corp reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Petroleum & Chemical Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%.
- The company has potentially unprofitable business model: ROIC is at 6.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Petroleum & Chemical Corp ($386) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 2,833,247 | 2,781,641 | 1,784,026 | 1,698,905 | 2,300,470 | 35.4% |
| Gross Profit | | | | 206,740 | | -100.0% |
| SG&A | 69,892 | 68,330 | 62,545 | 123,705 | 64,865 | -47.6% |
| EBITDA | 178,050 | 163,584 | 153,396 | 161,646 | 186,780 | 15.5% |
| Net Income | 66,132 | 46,466 | 32,281 | 46,416 | 51,244 | 10.4% |
Balance Sheet
|
|---|
| Cash | 15,101 | 10,100 | 43,553 | 49,468 | 165,004 | 233.6% |
| Short Term Debt | 163,870 | 178,148 | 119,572 | 81,174 | 80,649 | -0.6% |
| Long Term Debt | 145,590 | 150,932 | 139,746 | 117,446 | 99,124 | -15.6% |
Cash flow
|
|---|
| Capex | 154,946 | 124,381 | 102,657 | 72,847 | 70,948 | -2.6% |
Ratios
|
|---|
| Revenue growth | 3.6% | -1.8% | -35.9% | -4.8% | 35.4% | |
| EBITDA growth | 5.3% | -8.1% | -6.2% | 5.4% | 15.5% | |
| Gross Margin | | | | 12.2% | | -12.2% |
| EBITDA Margin | 6.3% | 5.9% | 8.6% | 9.5% | 8.1% | -1.4% |
| Net Income Margin | 2.3% | 1.7% | 1.8% | 2.7% | 2.2% | -0.5% |
| SG&A, % of revenue | 2.5% | 2.5% | 3.5% | 7.3% | 2.8% | -4.5% |
| CAPEX, % of revenue | 5.5% | 4.5% | 5.8% | 4.3% | 3.1% | -1.2% |
| ROIC | 10.6% | 7.5% | 5.5% | 4.9% | 6.6% | 1.6% |
| ROE | 12.2% | 8.0% | 5.1% | 6.7% | 7.1% | 0.4% |
| Net Debt/EBITDA | 1.7x | 1.9x | 1.4x | 0.9x | 0.1x | -0.8x |
China Petroleum & Chemical Corp ($386) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 524,016 | 525,524 | 519,086 | 598,267 | 29.8% | 29.0% | 21.7% | 18.2% |
| Net Income | 16,633 | 10,459 | 11,281 | 11,840 | 149.4% | -19.9% | 13.8% | -31.4% |
Balance Sheet
|
|---|
| Cash | 135,050 | 129,127 | 161,903 | 165,004 | 111.4% | 76.3% | 87.4% | 233.6% |
| Short Term Debt | 72,537 | 73,700 | 74,288 | 80,649 | -32.3% | -32.7% | -3.0% | -0.6% |
| Long Term Debt | 122,745 | 115,829 | 116,481 | 99,124 | -10.8% | -3.5% | -12.0% | -15.6% |
Ratios
|
|---|
| Net Income Margin | 3.2% | 2.0% | 2.2% | 2.0% | 1.5% | -1.2% | -0.2% | -1.4% |
Revenue and profitability
China Petroleum & Chemical Corp's Revenue jumped on 35.4%. Revenue growth showed slow down in 17Q4 - it was 18.2% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.4 pp from 9.5% to 8.1% in 2017.
SG&A as a % of Revenue decreased on 4.5 pp from 7.3% to 2.8% in 2017.
Net Income marign decreased slightly on 0.50 pp from 2.7% to 2.2% in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 the company had CAPEX/Revenue of 3.1%. CAPEX/Revenue decreased slightly on 1.4 pp from 4.5% in 2014 to 3.1% in 2017. For the last three years the average CAPEX/Revenue was 4.4%.
Return on investment
The company operates at low ROIC (6.55%) and ROE (7.13%). ROIC increased slightly on 1.6 pp from 4.9% to 6.6% in 2017. ROE showed almost no change in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.8x from 0.9x to 0.1x in 2017. Debt decreased on 9.5% while cash surged on 234%.
Appendix 1: Peers in Oil&Gas
Below we provide China Petroleum & Chemical Corp benchmarking against other companies in Oil&Gas 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, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| PetroAsian Energy Holdings Ltd ($850) | 191.7% | -1.0% | -18.1% | 637.7% | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 33.1% | -10.1% | 55.4% | 74.7% | |
| COSCO International Holdings Ltd ($517) | -7.0% | -18.5% | -20.9% | 23.8% | |
| Zhongyu Gas Holdings Ltd ($3633) | 13.7% | 9.0% | -4.0% | 13.6% | |
| CNOOC Ltd ($883) | | -3.9% | -37.6% | -14.6% | 27.2% |
| |
|---|
| Median (7 companies) | 8.7% | -4.3% | -11.9% | 13.6% | 27.2% |
|---|
Top companies by Gross margin, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| United Energy Group Ltd ($467) | 48.0% | 53.8% | 51.5% | 52.6% | |
| Brightoil Petroleum Holdings Ltd ($933) | 2.1% | 2.1% | 2.6% | 4.2% | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 6.8% | 7.3% | 6.1% | 4.2% | |
| PetroAsian Energy Holdings Ltd ($850) | 4.1% | 2.7% | 0.4% | 2.1% | |
| |
|---|
| Median (4 companies) | 5.4% | 9.7% | 6.1% | 4.2% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| United Energy Group Ltd ($467) | 65.3% | 69.8% | -31.9% | 70.5% | |
| CNOOC Ltd ($883) | 47.2% | 50.7% | 53.0% | 44.8% | 52.4% |
| Brightoil Petroleum Holdings Ltd ($933) | -0.6% | 1.4% | 4.7% | 6.5% | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 6.0% | 6.9% | 5.4% | 3.5% | |
| PetroAsian Energy Holdings Ltd ($850) | -5.7% | -9.8% | -10.9% | 0.2% | |
| |
|---|
| Median (5 companies) | 0.4% | 5.2% | -6.7% | 6.5% | 52.4% |
|---|
Top companies by CAPEX/Revenue, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| CNOOC Ltd ($883) | 30.3% | 34.8% | 39.5% | 35.1% | 25.6% |
| Brightoil Petroleum Holdings Ltd ($933) | 2.7% | 0.6% | 0.9% | 3.1% | |
| PetroAsian Energy Holdings Ltd ($850) | 1.0% | 0.2% | 0.8% | 1.7% | |
| |
|---|
| Median (3 companies) | 7.9% | 7.5% | 6.5% | 3.1% | 25.6% |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| United Energy Group Ltd ($467) | 10.3% | 15.7% | -25.0% | 10.8% | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 12.6% | 13.0% | 13.9% | 9.6% | |
| Brightoil Petroleum Holdings Ltd ($933) | -4.4% | 6.5% | 13.8% | 6.7% | |
| PetroAsian Energy Holdings Ltd ($850) | -10.3% | -15.5% | -13.4% | -0.0% | |
| CNOOC Ltd ($883) | 18.1% | 15.8% | 3.2% | -0.6% | 7.2% |
| |
|---|
| Median (8 companies) | 0.8% | 0.1% | -1.7% | 3.3% | 7.2% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| PetroAsian Energy Holdings Ltd ($850) | | | | 13.9x | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 4.3x | 3.6x | 2.8x | 3.5x | |
| Brightoil Petroleum Holdings Ltd ($933) | | 3.1x | 2.9x | 2.6x | |
| CNOOC Ltd ($883) | 0.9x | 0.9x | 1.7x | 2.1x | 1.2x |
| United Energy Group Ltd ($467) | 1.1x | 0.6x | | -0.9x | |
| |
|---|
| Median (5 companies) | 1.0x | 3.1x | 2.1x | 2.6x | 1.2x |
|---|
