China Construction Bank Corp reports 4.7% Net Income growth in 2017
27/03/2018 • About China Construction Bank Corp (
$939) • By InTwits
China Construction Bank Corp reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Construction Bank Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's a lot of higher than industry average of 2.3%.
- CAPEX is quite volatile: 13,096 in 2017, 39,281 in 2016, 42,297 in 2015, 53,957 in 2014, 44,427 in 2013
- The company has potentially unprofitable business model: ROIC is at 6.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Construction Bank Corp ($939) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 771,070 | 861,353 | 908,448 | 896,781 | 934,730 | 4.2% |
| Net Income | 214,657 | 227,830 | 228,145 | 231,460 | 242,264 | 4.7% |
Balance Sheet
|
|---|
| Cash | 2,475,001 | 2,610,781 | 2,401,544 | 2,849,261 | 2,988,256 | 4.9% |
| Short Term Debt | 927,169 | 1,297,736 | 1,803,155 | 2,374,880 | 2,267,921 | -4.5% |
| Long Term Debt | 163,791 | 191,349 | 244,748 | 252,546 | 275,160 | 9.0% |
Cash flow
|
|---|
| Capex | 38,406 | 35,490 | 28,589 | 27,742 | 22,263 | -19.7% |
Ratios
|
|---|
| Revenue growth | 8.0% | 11.7% | 5.5% | -1.3% | 4.2% | |
| Net Income Margin | 27.8% | 26.5% | 25.1% | 25.8% | 25.9% | 0.1% |
| CAPEX, % of revenue | 5.0% | 4.1% | 3.1% | 3.1% | 2.4% | -0.7% |
| ROIC | 11.7% | 10.8% | 8.4% | 6.9% | 6.5% | -0.4% |
| ROE | 21.4% | 19.7% | 17.2% | 15.6% | 14.9% | -0.7% |
China Construction Bank Corp ($939) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 246,935 | 219,740 | 232,471 | 389,526 | -5.1% | 5.2% | 9.1% | 9.1% |
| Net Income | 70,012 | 68,327 | 62,903 | 41,022 | 3.0% | 4.4% | 4.1% | 9.0% |
Balance Sheet
|
|---|
| Cash | 2,981,283 | 2,941,465 | 2,961,632 | 2,988,256 | 10.4% | 13.8% | 8.7% | 4.9% |
| Short Term Debt | 2,335,827 | 2,196,111 | 2,149,314 | 2,267,921 | 28.9% | 1.1% | -3.4% | -4.5% |
| Long Term Debt | 466,060 | 265,484 | 615,427 | 275,160 | 22.0% | 8.7% | 38.1% | 9.0% |
Ratios
|
|---|
| Net Income Margin | 28.4% | 31.1% | 27.1% | 10.5% | 2.2% | -0.3% | -1.3% | -0.0% |
Revenue and profitability
China Construction Bank Corp's Revenue increased on 4.2%. Revenue growth showed acceleration in 17Q4 - it increased 9.1% YoY.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 the company had CAPEX/Revenue of 2.4%. The company's CAPEX/Revenue decreased slightly on 1.7 pp from 4.1% in 2014 to 2.4% in 2017. Average CAPEX/Revenue for the last three years was 2.9%.
Return on investment
The company operates at good ROE (14.88%) while ROIC is low (6.46%). ROIC showed almost no change in 2017. ROE decreased slightly on 0.70 pp from 15.6% to 14.9% in 2017.
Leverage (Debt)
Debt decreased on 3.2% while cash increased on 4.9%.
Appendix 1: Peers in Banks
Below you can find China Construction Bank Corp 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% |
|---|
