Dongfeng Motor Group Co Ltd reports 46.2% EBITDA decline in 2017 while 2.0% Revenue growth
27/03/2018 • About Dongfeng Motor Group Co Ltd (
$489) • By InTwits
Dongfeng Motor Group Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dongfeng Motor Group Co Ltd doesn't have a profitable business model yet: 2017 ROIC is -0.1%
- EBITDA Margin is quite volatile: 1.7% in 2017, 3.2% in 2016, 2.4% in 2015, 2.7% in 2014, -0.9% in 2013
- Dongfeng Motor Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 3,435 in 2017, 2,778 in 2016, 3,132 in 2015, 3,121 in 2014, 814 in 2013
- The company has unprofitable business model: ROIC is at -0.1%
- It operates with high leverage: Net Debt/EBITDA is 2.4x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dongfeng Motor Group Co Ltd ($489) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 37,263 | 83,114 | 126,566 | 122,535 | 125,016 | 2.0% |
| Gross Profit | 4,681 | 10,817 | 16,929 | 17,515 | 16,112 | -8.0% |
| SG&A | 4,447 | 7,527 | 10,835 | 11,401 | 11,878 | 4.2% |
| EBITDA | -333 | 2,285 | 3,078 | 3,930 | 2,115 | -46.2% |
| Net Income | 10,528 | 12,797 | 11,550 | 13,345 | 14,063 | 5.4% |
Balance Sheet
|
|---|
| Cash | 21,739 | 25,233 | 31,806 | 30,851 | 33,350 | 8.1% |
| Short Term Debt | 17,597 | 30,175 | 17,930 | 22,177 | 36,024 | 62.4% |
| Long Term Debt | 0 | 350 | 7,559 | 7,087 | 2,398 | -66.2% |
Cash flow
|
|---|
| Capex | 814 | 3,121 | 3,132 | 2,778 | 3,435 | 23.7% |
Ratios
|
|---|
| Revenue growth | 511.9% | 123.0% | 52.3% | -3.2% | 2.0% | |
| EBITDA growth | -70.3% | -786.2% | 34.7% | 27.7% | -46.2% | |
| Gross Margin | 12.6% | 13.0% | 13.4% | 14.3% | 12.9% | -1.4% |
| EBITDA Margin | -0.9% | 2.7% | 2.4% | 3.2% | 1.7% | -1.5% |
| Net Income Margin | 28.3% | 15.4% | 9.1% | 10.9% | 11.2% | 0.4% |
| SG&A, % of revenue | 11.9% | 9.1% | 8.6% | 9.3% | 9.5% | 0.2% |
| CAPEX, % of revenue | 2.2% | 3.8% | 2.5% | 2.3% | 2.7% | 0.5% |
| ROIC | -1.6% | 0.8% | 1.2% | 1.5% | -0.1% | -1.6% |
| ROE | 18.0% | 18.7% | 14.6% | 14.7% | 13.7% | -1.0% |
| Net Debt/EBITDA | | 2.3x | -2.1x | -0.4x | 2.4x | 2.8x |
Revenue and profitability
The company's Revenue increased on 2.0%. 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 decreased slightly on 1.4 pp from 14.3% to 12.9% in 2017. SG&A as a % of Revenue showed almost no change in 2017.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
Dongfeng Motor Group Co Ltd's CAPEX/Revenue was 2.7% in 2017. The company's CAPEX/Revenue decreased slightly on 1.0 pp from 3.8% in 2014 to 2.7% in 2017. Average CAPEX/Revenue for the last three years was 2.5%.The company investments to CAPEX were large: 162% of EBITDA.
Return on investment
The company operates at negative ROIC (-0.10%) and low but positive ROE (13.72%). ROIC decreased slightly on 1.6 pp from 1.5% to -0.10% in 2017. ROE decreased slightly on 0.99 pp from 14.7% to 13.7% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is 18.2x. Net Debt / EBITDA surged on 2.8x from -0.4x to 2.4x in 2017. Debt jumped on 31.3% while cash increased on 8.1%.
Appendix 1: Peers in Auto Manufacturers
Below we provide Dongfeng Motor Group Co Ltd benchmarking against other companies in Auto Manufacturers 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 |
|---|
| 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% | |
| Qingling Motors Co Ltd ($1122) | -5.9% | 0.3% | -5.1% | -15.8% | |
| |
|---|
| Median (5 companies) | 9.0% | 7.2% | 10.8% | 5.4% | |
|---|
| Dongfeng Motor Group Co Ltd ($489) | | 123.0% | 52.3% | -3.2% | 2.0% |
Top companies by Gross margin, %
| Top | 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% | |
| 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 (4 companies) | 13.4% | 13.8% | 15.3% | 15.0% | |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 12.6% | 13.0% | 13.4% | 14.3% | 12.9% |
Top companies by EBITDA margin, %
| Top | 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% | |
| Brilliance China Automotive Holdings Ltd ($1114) | -0.9% | -3.2% | -9.7% | -10.1% | |
| |
|---|
| Median (4 companies) | 7.4% | 7.8% | 7.5% | 8.5% | |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -0.9% | 2.7% | 2.4% | 3.2% | 1.7% |
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% | |
| Geely Automobile Holdings Ltd ($175) | 3.9% | 5.0% | 5.3% | 1.1% | |
| |
|---|
| Median (2 companies) | 3.9% | 4.2% | 5.3% | 4.1% | |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 2.2% | 3.8% | 2.5% | 2.3% | 2.7% |
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% | |
| Brilliance China Automotive Holdings Ltd ($1114) | -1.4% | -1.8% | -3.1% | -3.2% | |
| Qingling Motors Co Ltd ($1122) | 5.7% | 5.1% | 5.8% | | |
| |
|---|
| Median (5 companies) | 5.7% | 5.1% | 6.2% | 14.4% | |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -1.6% | 0.8% | 1.2% | 1.5% | -0.1% |
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 | |
| Geely Automobile Holdings Ltd ($175) | -0.9x | -1.2x | -1.6x | -1.7x | |
| |
|---|
| Median (3 companies) | 1.9x | 0.6x | 0.3x | 0.2x | |
|---|
| Dongfeng Motor Group Co Ltd ($489) | | 2.3x | -2.1x | -0.4x | 2.4x |
