CSR Corp Ltd reports 16.5% EBITDA decline in 2017 and 6.8% Revenue decline
28/03/2018 • About CSR Corp Ltd (
$1766) • By InTwits
CSR Corp Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CSR Corp Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.5%. At the same time it's in pair with industry average of 4.2%.
- CAPEX is quite volatile: 10,244 in 2017, 10,681 in 2016, 7,490 in 2015, 18,649 in 2014, 14,700 in 2013
- The company has potentially unprofitable business model: ROIC is at 6.8%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is -0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CSR Corp Ltd ($1766) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 97,655 | 218,451 | 237,785 | 224,138 | 208,899 | -6.8% |
| Gross Profit | 16,808 | 42,831 | 46,535 | 45,028 | 45,746 | 1.6% |
| SG&A | 11,808 | 27,129 | 30,440 | 29,686 | 19,627 | -33.9% |
| EBITDA | 8,023 | 20,689 | 23,204 | 23,602 | 19,699 | -16.5% |
| Net Income | 4,165 | 10,816 | 11,818 | 11,290 | 10,799 | -4.4% |
Balance Sheet
|
|---|
| Cash | 14,974 | 43,837 | 35,955 | 41,036 | 56,264 | 37.1% |
| Short Term Debt | 6,866 | 27,373 | 15,260 | 27,184 | 60,955 | 124.2% |
| Long Term Debt | 3,377 | 12,216 | 14,316 | 14,838 | 13,585 | -8.4% |
Cash flow
|
|---|
| Capex | 5,710 | 9,629 | 8,435 | 10,307 | 8,697 | -15.6% |
Ratios
|
|---|
| Revenue growth | 9.7% | 123.7% | 8.9% | -5.7% | -6.8% | |
| EBITDA growth | 10.6% | 157.9% | 12.2% | 1.7% | -16.5% | |
| Gross Margin | 17.2% | 19.6% | 19.6% | 20.1% | 21.9% | 1.8% |
| EBITDA Margin | 8.2% | 9.5% | 9.8% | 10.5% | 9.4% | -1.1% |
| Net Income Margin | 4.3% | 5.0% | 5.0% | 5.0% | 5.2% | 0.1% |
| SG&A, % of revenue | 12.1% | 12.4% | 12.8% | 13.2% | 9.4% | -3.8% |
| CAPEX, % of revenue | 5.8% | 4.4% | 3.5% | 4.6% | 4.2% | -0.4% |
| ROIC | 11.2% | 15.3% | 11.7% | 10.9% | 6.8% | -4.1% |
| ROE | 11.9% | 17.1% | 12.7% | 11.2% | 9.5% | -1.7% |
| Net Debt/EBITDA | -0.6x | -0.2x | -0.3x | 0.0x | 0.9x | 0.9x |
CSR Corp Ltd ($1766) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 33,237 | 54,573 | 51,481 | 69,608 | -17.0% | 2.0% | -2.1% | -14.8% |
| Net Income | 1,151 | 2,520 | 3,138 | 3,989 | -42.1% | -10.2% | 15.3% | 5.7% |
Balance Sheet
|
|---|
| Cash | 35,175 | 31,210 | 37,276 | 56,264 | 1.8% | -0.9% | -5.5% | 23.4% |
| Short Term Debt | 47,085 | 48,503 | 58,697 | 60,955 | 30.0% | 7.0% | 28.9% | 22.4% |
| Long Term Debt | 12,860 | 11,462 | 12,524 | 13,585 | -26.8% | -25.3% | -26.0% | -6.1% |
Ratios
|
|---|
| Gross Margin | 21.2% | 21.2% | 22.7% | 22.1% | -1.4% | -1.2% | 1.6% | 5.4% |
| Net Income Margin | 3.5% | 4.6% | 6.1% | 5.7% | -1.5% | -0.6% | 0.9% | 1.1% |
Revenue and profitability
The company's Revenue decreased on 6.8%. Revenue decline showed acceleration in 17Q4 - it was 14.8% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 10.5% to 9.4% in 2017.
Gross Margin increased slightly on 1.8 pp from 20.1% to 21.9% in 2017. SG&A as a % of Revenue decreased on 3.8 pp from 13.2% to 9.4% in 2017.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
CSR Corp Ltd's CAPEX/Revenue was 4.2% in 2017. The company showed almost no change in CAPEX/Revenue from 2014 to 2017. It's average level of CAPEX/Revenue for the last three years was 4.1%.
Return on investment
The company operates at low ROIC (6.82%) and ROE (9.54%). ROIC decreased on 4.1 pp from 10.9% to 6.8% in 2017. ROE decreased slightly on 1.7 pp from 11.2% to 9.5% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 3.8x. Net Debt / EBITDA jumped on 0.9x from 0.042x to 0.9x in 2017. Debt jumped on 77.4% while cash surged on 37.1%.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find CSR Corp Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| Man Sang International Ltd ($938) | 24.6% | -82.0% | -11.5% | 159.9% | |
| China Environmental Energy Investment Ltd ($986) | -26.7% | -40.0% | -81.2% | 69.7% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 45.9% | 45.0% | 26.9% | 36.6% | |
| AMCO United Holding Ltd ($2970) | 10.8% | 53.9% | 16.8% | 31.1% | |
| Herald Holdings Ltd ($114) | -3.9% | -0.4% | -5.6% | 20.9% | |
| |
|---|
| Median (22 companies) | -0.3% | 7.5% | -5.2% | 4.7% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Time Watch Investments Ltd ($2033) | 60.6% | 65.0% | 68.1% | 68.5% | |
| Man Sang International Ltd ($938) | 32.8% | 60.3% | 78.6% | 56.4% | |
| China Environmental Energy Investment Ltd ($986) | 1.2% | 9.0% | 49.2% | 40.4% | |
| Lee & Man Chemical Co Ltd ($746) | 35.7% | 41.9% | 39.6% | 36.3% | |
| China Ludao Technology Co Ltd ($2023) | 24.9% | 25.5% | 24.7% | 28.2% | |
| |
|---|
| Median (13 companies) | 20.6% | 24.9% | 23.1% | 23.9% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Man Sang International Ltd ($938) | 15.4% | 37.0% | 33.8% | 40.4% | |
| Lee & Man Chemical Co Ltd ($746) | 31.3% | 38.4% | 37.6% | 37.0% | |
| TK Group Holdings Ltd ($2283) | 18.9% | 17.9% | 17.2% | 18.5% | |
| Time Watch Investments Ltd ($2033) | 16.8% | 19.4% | 20.5% | 16.4% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 10.9% | 9.8% | 10.5% | 12.3% | |
| |
|---|
| Median (13 companies) | 8.8% | 8.6% | 7.0% | 9.0% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Environmental Energy Investment Ltd ($986) | 0.4% | 17.9% | 47.6% | 6.2% | |
| TK Group Holdings Ltd ($2283) | 8.1% | 13.7% | 7.6% | 6.1% | |
| VS International Group Ltd ($1002) | 2.1% | 1.8% | 4.3% | 5.4% | |
| Karrie International Hldgs ($1050) | 4.7% | 5.2% | 7.4% | 4.2% | |
| Continental Holdings Ltd ($513) | 0.7% | 3.0% | 5.6% | 3.8% | |
| |
|---|
| Median (10 companies) | 4.2% | 4.0% | 4.9% | 3.8% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Sunny Optical Technology Group Co Ltd ($2382) | 17.8% | 16.5% | 19.4% | 26.8% | |
| TK Group Holdings Ltd ($2283) | 31.1% | 29.4% | 27.6% | 26.0% | |
| Time Watch Investments Ltd ($2033) | 27.1% | 27.8% | 27.9% | 18.6% | |
| Karrie International Hldgs ($1050) | 4.4% | 7.0% | 5.5% | 12.0% | |
| Lee & Man Chemical Co Ltd ($746) | 8.2% | 10.9% | 10.7% | 10.4% | |
| |
|---|
| Median (22 companies) | 4.0% | 4.2% | 1.5% | 9.0% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| VS International Group Ltd ($1002) | 6.5x | 4.4x | 3.3x | 4.6x | |
| Lee & Man Chemical Co Ltd ($746) | 1.5x | 2.2x | 2.5x | 2.6x | |
| Karrie International Hldgs ($1050) | 0.2x | -0.2x | 0.9x | 0.5x | |
| Sunny Optical Technology Group Co Ltd ($2382) | -0.3x | 0.3x | 0.8x | 0.2x | |
| TK Group Holdings Ltd ($2283) | -0.7x | -0.6x | -0.4x | -0.6x | |
| |
|---|
| Median (10 companies) | -0.0x | -0.1x | 0.4x | -0.7x | |
|---|
