Fosun International Ltd reports 66.5% CAPEX growth in 2017 and 19.0% Revenue growth
27/03/2018 • About Fosun International Ltd (
$656) • By InTwits
Fosun International Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 30.3% in 2017 vs. 29.2% in 2016 vs. 23.0% in 2013
- Fosun International Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.6%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 1,818 in 2017, 1,432 in 2016, 1,594 in 2015, 1,879 in 2014, 3,298 in 2013
- The company has business model with low profitability: ROIC is at 8.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Fosun International Ltd ($656) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 51,017 | 61,738 | 78,797 | 73,967 | 88,025 | 19.0% |
| Gross Profit | 10,358 | 14,616 | 17,662 | 25,872 | 32,150 | 24.3% |
| SG&A | 6,608 | 11,349 | 16,447 | 23,373 | 26,641 | 14.0% |
| EBITDA | 11,752 | 12,900 | 17,529 | 21,577 | 26,655 | 23.5% |
| Net Income | 5,519 | 6,854 | 8,038 | 10,268 | 13,161 | 28.2% |
Balance Sheet
|
|---|
| Cash | 12,777 | 25,849 | 37,955 | 35,755 | 81,652 | 128.4% |
| Short Term Debt | 31,809 | 46,741 | 49,060 | 44,155 | 58,184 | 31.8% |
| Long Term Debt | 37,525 | 49,714 | 66,770 | 82,607 | 92,616 | 12.1% |
Cash flow
|
|---|
| Capex | 6,508 | 5,031 | 7,890 | 5,296 | 8,819 | 66.5% |
Ratios
|
|---|
| Revenue growth | -1.4% | 21.0% | 27.6% | -6.1% | 19.0% | |
| EBITDA growth | 35.8% | 9.8% | 35.9% | 23.1% | 23.5% | |
| Gross Margin | 20.3% | 23.7% | 22.4% | 35.0% | 36.5% | 1.5% |
| EBITDA Margin | 23.0% | 20.9% | 22.2% | 29.2% | 30.3% | 1.1% |
| Net Income Margin | 10.8% | 11.1% | 10.2% | 13.9% | 15.0% | 1.1% |
| SG&A, % of revenue | 13.0% | 18.4% | 20.9% | 31.6% | 30.3% | -1.3% |
| CAPEX, % of revenue | 12.8% | 8.1% | 10.0% | 7.2% | 10.0% | 2.9% |
| ROIC | 7.9% | 6.8% | 6.9% | 7.6% | 8.6% | 0.9% |
| ROE | 14.8% | 15.4% | 12.9% | 12.2% | 13.6% | 1.4% |
| Net Debt/EBITDA | 4.8x | 5.5x | 4.4x | 4.2x | 2.6x | -1.6x |
Revenue and profitability
The company's Revenue surged on 19.0%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.1 pp from 29.2% to 30.3% in 2017.
Gross Margin increased slightly on 1.5 pp from 35.0% to 36.5% in 2017. SG&A as a % of Revenue decreased slightly on 1.3 pp from 31.6% to 30.3% in 2017.
Net Income marign increased slightly on 1.1 pp from 13.9% to 15.0% in 2017.
Capital expenditures (CAPEX) and working capital investments
Fosun International Ltd's CAPEX/Revenue was 10.0% in 2017. The company's CAPEX/Revenue increased slightly on 1.9 pp from 8.1% in 2014 to 10.0% in 2017. It's average CAPEX/Revenue for the last three years was 9.1%.
Return on investment
The company operates at good ROE (13.62%) while ROIC is low (8.57%). ROIC increased slightly on 0.93 pp from 7.6% to 8.6% in 2017. ROE increased slightly on 1.4 pp from 12.2% to 13.6% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 5.7x. Net Debt / EBITDA dropped on 1.6x from 4.2x to 2.6x in 2017. Debt jumped on 19.0% while cash surged on 128%.
Appendix 1: Peers in Iron/Steel
Below we provide Fosun International Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| China Vanadium Titano - Magnetite Mining Co Ltd ($893) | -6.8% | -54.6% | -20.4% | 255.0% | |
| CAA Resources Ltd ($2112) | 103.2% | 38.0% | 261.2% | 125.5% | |
| China Hanking Holdings Ltd ($3788) | 4.2% | -6.0% | -10.9% | 40.0% | |
| Vale SA ($6210) | 11.2% | -13.0% | -11.6% | 21.2% | |
| Xingda International Holdings Ltd ($1899) | 6.4% | 0.2% | -15.3% | 15.5% | |
| |
|---|
| Median (9 companies) | 0.6% | -6.0% | -21.1% | 15.5% | |
|---|
| Fosun International Ltd ($656) | | 21.0% | 27.6% | -6.1% | 19.0% |
Top companies by Gross margin, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Vale SA ($6210) | 48.3% | 33.1% | 19.6% | 35.4% | |
| Pan Asia Mining Ltd ($8173) | 0.7% | 0.6% | 16.6% | -16.6% | |
| |
|---|
| Median (2 companies) | 12.7% | 11.3% | 8.5% | 9.4% | |
|---|
| Fosun International Ltd ($656) | 20.3% | 23.7% | 22.4% | 35.0% | 36.5% |
Top companies by EBITDA margin, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Pan Asia Mining Ltd ($8173) | -12.8% | -14.3% | -346.0% | 6,443.1% | |
| Vale SA ($6210) | 40.8% | 30.1% | -16.9% | 38.1% | |
| |
|---|
| Median (2 companies) | 11.7% | 7.1% | 1.9% | 3,240.6% | |
|---|
| Fosun International Ltd ($656) | 23.0% | 20.9% | 22.2% | 29.2% | 30.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Vale SA ($6210) | 28.1% | 29.8% | 34.5% | 18.3% | |
| Pan Asia Mining Ltd ($8173) | 0.4% | 2.4% | 24.4% | 7.6% | |
| |
|---|
| Median (2 companies) | 10.5% | 6.4% | 7.2% | 12.9% | |
|---|
| Fosun International Ltd ($656) | 12.8% | 8.1% | 10.0% | 7.2% | 10.0% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Pan Asia Mining Ltd ($8173) | -3.1% | -5.5% | -6.4% | 57.1% | |
| Vale SA ($6210) | 14.8% | 7.3% | -11.2% | 10.8% | |
| CAA Resources Ltd ($2112) | 33.5% | 2.2% | 6.9% | | |
| China Vanadium Titano - Magnetite Mining Co Ltd ($893) | 7.5% | -11.3% | -24.7% | | |
| Golik Holdings Ltd ($1118) | 7.4% | 10.0% | 10.8% | | |
| |
|---|
| Median (9 companies) | 7.5% | 3.1% | -3.9% | 33.9% | |
|---|
| Fosun International Ltd ($656) | 7.9% | 6.8% | 6.9% | 7.6% | 8.6% |
Top companies by Net Debt / EBITDA
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Pan Asia Mining Ltd ($8173) | | | | 6.1x | |
| Vale SA ($6210) | 1.4x | 2.5x | | 2.3x | |
| |
|---|
| Median (2 companies) | 2.5x | 2.9x | 1.5x | 4.2x | |
|---|
| Fosun International Ltd ($656) | 4.8x | 5.5x | 4.4x | 4.2x | 2.6x |
