Agricultural Bank of China Ltd revenue increased on 6.8%
26/03/2018 • About Agricultural Bank of China Ltd (
$1288) • By InTwits
Agricultural Bank of China Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Agricultural Bank of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 2.3%.
- CAPEX is quite volatile: 292 in 2017, 481 in 2016, 327 in 2015, 1,270 in 2014, 252 in 2013
- The company has potentially unprofitable business model: ROIC is at 6.1%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Agricultural Bank of China Ltd ($1288) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 709,088 | 800,181 | 836,616 | 773,879 | 826,581 | 6.8% |
| Net Income | 166,315 | 179,461 | 180,582 | 183,941 | 192,962 | 4.9% |
Balance Sheet
|
|---|
| Cash | 2,603,802 | 2,743,065 | 2,587,057 | 2,811,653 | 2,896,619 | 3.0% |
| Short Term Debt | 945,327 | 1,106,486 | 1,585,732 | 1,475,569 | 1,275,909 | -13.5% |
| Long Term Debt | 156,404 | 272,115 | 259,075 | 493,159 | 712,780 | 44.5% |
Cash flow
|
|---|
| Capex | 28,170 | 25,997 | 21,687 | 22,637 | 16,011 | -29.3% |
Ratios
|
|---|
| Revenue growth | 8.5% | 12.8% | 4.6% | -7.5% | 6.8% | |
| Net Income Margin | 23.5% | 22.4% | 21.6% | 23.8% | 23.3% | -0.4% |
| CAPEX, % of revenue | 4.0% | 3.2% | 2.6% | 2.9% | 1.9% | -1.0% |
| ROIC | 10.0% | 9.3% | 7.4% | 6.2% | 6.1% | -0.2% |
| ROE | 20.9% | 19.6% | 16.8% | 15.5% | 14.9% | -0.6% |
Agricultural Bank of China Ltd ($1288) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 217,495 | 197,555 | 204,976 | 206,555 | 4.9% | 5.1% | 6.8% | 66.4% |
| Net Income | 55,710 | 52,883 | 51,417 | 32,952 | 1.9% | 4.8% | 4.9% | 10.7% |
Balance Sheet
|
|---|
| Cash | 2,831,875 | 2,882,030 | 2,916,248 | 2,896,619 | 6.4% | 9.6% | 1.9% | 3.0% |
| Short Term Debt | 1,211,218 | 1,268,715 | 1,651,792 | 1,275,909 | -4.2% | -11.7% | 33.8% | -13.5% |
| Long Term Debt | 853,367 | 629,713 | 451,352 | 712,780 | 88.3% | 137.0% | -15.7% | 44.5% |
Ratios
|
|---|
| Net Income Margin | 25.6% | 26.8% | 25.1% | 16.0% | -0.8% | -0.1% | -0.4% | -8.0% |
Revenue and profitability
The company's Revenue increased on 6.8%. Revenue growth showed acceleration in 17Q4 - it increased 66.4% YoY.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 Agricultural Bank of China Ltd had CAPEX/Revenue of 1.9%. The company's CAPEX/Revenue decreased slightly on 1.3 pp from 3.2% in 2014 to 1.9% in 2017. It's average CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at good ROE (14.93%) while ROIC is low (6.09%). ROIC showed almost no change in 2017. ROE decreased slightly on 0.60 pp from 15.5% to 14.9% in 2017.
Leverage (Debt)
Debt increased slightly on 1.0% while cash increased on 3.0%.
Appendix 1: Peers in Banks
Below you can find Agricultural Bank of China Ltd benchmarking vs. other companies in Banks 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 |
|---|
| Shengjing Bank Co Ltd ($2066) | 36.3% | 40.1% | 24.3% | 17.5% | |
| Huishang Bank Corp Ltd ($3698) | 22.8% | 24.3% | 24.6% | 17.3% | |
| Chong Hing Bank Ltd ($1111) | -1.2% | 121.1% | -17.4% | 0.7% | |
| Hang Seng Bank Ltd ($11) | 8.8% | 9.3% | 1.4% | -2.0% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 21.7% | 23.6% | 7.6% | -4.7% | |
| |
|---|
| Median (8 companies) | 12.1% | 23.6% | 4.8% | -3.3% | 7.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Shengjing Bank Co Ltd ($2066) | 2.2% | 5.0% | 3.0% | 2.3% | |
| Chong Hing Bank Ltd ($1111) | 1.6% | 0.7% | 1.9% | 2.1% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 4.3% | 4.8% | 4.4% | 2.0% | |
| HSBC Holdings ($5) | 2.3% | 1.8% | 1.7% | 1.8% | |
| Bank of East Asia Ltd/The ($23) | 2.9% | 1.1% | 1.6% | 1.8% | |
| |
|---|
| Median (8 companies) | 2.9% | 1.8% | 2.5% | 1.8% | 0.8% |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Hang Seng Bank Ltd ($11) | 9.5% | 9.0% | 8.3% | 8.1% | |
| Chong Hing Bank Ltd ($1111) | 5.2% | 16.4% | 5.7% | 5.6% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 5.7% | 5.2% | 4.3% | 4.1% | |
| Huishang Bank Corp Ltd ($3698) | 6.8% | 5.8% | 4.3% | 4.0% | |
| Shengjing Bank Co Ltd ($2066) | 6.6% | 5.3% | 3.5% | 2.3% | |
| |
|---|
| Median (12 companies) | 6.2% | 5.4% | 4.3% | 3.1% | 1.5% |
|---|
