Jiangxi Copper Co Ltd Debt surged on 59.7% and Net Debt / EBITDA surged on 1.3x from 1.5x to 2.9x
28/03/2018 • About Jiangxi Copper Co Ltd (
$358) • By InTwits
Jiangxi Copper Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 2.4% in 2017 vs. 2.2% in 2016 vs. 3.4% in 2013
- Jiangxi Copper Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's in pair with industry average of 4.2%.
- CAPEX is quite volatile: 3,262 in 2017, 1,620 in 2016, 1,427 in 2015, 1,738 in 2014, 1,950 in 2013
- The company has potentially unprofitable business model: ROIC is at 4.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Jiangxi Copper Co Ltd ($358) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 175,292 | 198,264 | 185,228 | 201,728 | 204,234 | 1.2% |
| Gross Profit | 6,533 | 6,039 | 3,775 | 6,564 | 8,436 | 28.5% |
| SG&A | 2,306 | 2,293 | 2,556 | 2,254 | 2,225 | -1.3% |
| EBITDA | 5,918 | 4,054 | 3,344 | 4,475 | 4,820 | 7.7% |
| Net Income | 3,556 | 2,851 | 690 | 837 | 1,650 | 97.0% |
Balance Sheet
|
|---|
| Cash | 19,666 | 19,394 | 16,705 | 8,275 | 10,363 | 25.2% |
| Short Term Debt | 15,746 | 21,532 | 23,260 | 14,956 | 23,739 | 58.7% |
| Long Term Debt | 6,045 | 6,927 | 348 | 228 | 509 | 123.0% |
Cash flow
|
|---|
| Capex | 1,950 | 1,738 | 1,427 | 1,620 | 3,262 | 101.3% |
Ratios
|
|---|
| Revenue growth | 10.9% | 13.1% | -6.6% | 8.9% | 1.2% | |
| EBITDA growth | -20.4% | -31.5% | -17.5% | 33.8% | 7.7% | |
| Gross Margin | 3.7% | 3.0% | 2.0% | 3.3% | 4.1% | 0.9% |
| EBITDA Margin | 3.4% | 2.0% | 1.8% | 2.2% | 2.4% | 0.1% |
| Net Income Margin | 2.0% | 1.4% | 0.4% | 0.4% | 0.8% | 0.4% |
| SG&A, % of revenue | 1.3% | 1.2% | 1.4% | 1.1% | 1.1% | -0.0% |
| CAPEX, % of revenue | 1.1% | 0.9% | 0.8% | 0.8% | 1.6% | 0.8% |
| ROIC | 6.8% | 3.5% | 2.3% | 3.8% | 4.2% | 0.4% |
| ROE | 8.1% | 6.3% | 1.5% | 1.8% | 3.5% | 1.7% |
| Net Debt/EBITDA | 0.4x | 2.2x | 2.1x | 1.5x | 2.9x | 1.3x |
Jiangxi Copper Co Ltd ($358) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 44,510 | 53,249 | 57,003 | 49,471 | 14.9% | 3.9% | 13.6% | -19.6% |
| Net Income | 541 | 289 | 750 | 23 | 168.8% | 6.2% | 45.7% | |
Balance Sheet
|
|---|
| Cash | 16,459 | 7,909 | 20,653 | 10,363 | -14.6% | -41.2% | 34.7% | 25.2% |
| Short Term Debt | 20,077 | 23,871 | 27,053 | 24,887 | -31.8% | -12.3% | 44.1% | 20.4% |
| Long Term Debt | 205 | 11 | 511 | 623 | -51.2% | -95.5% | 201.9% | 173.3% |
Ratios
|
|---|
| Gross Margin | 3.7% | 2.5% | 5.1% | 5.0% | 1.7% | -0.1% | 2.8% | 0.0% |
| Net Income Margin | 1.2% | 0.5% | 1.3% | 0.0% | 0.7% | 0.0% | 0.3% | 0.4% |
Revenue and profitability
The company's Revenue increased slightly on 1.2%. Revenue growth showed slow down in 17Q4 - it was -19.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.0 pp from 69.9% to 75.0% in 2017.
Gross Margin increased slightly on 0.88 pp from 3.3% to 4.1% 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
In 2017 the company had CAPEX/Revenue of 1.6%. Jiangxi Copper Co Ltd's CAPEX/Revenue increased slightly on 0.72 pp from 0.88% in 2014 to 1.6% in 2017. Average CAPEX/Revenue for the last three years was 1.1%.The company invested a large share of EBITDA (67.7%) to CAPEX.
Return on investment
The company operates at low ROIC (4.16%) and ROE (3.50%). ROIC showed almost no change in 2017. ROE increased slightly on 1.7 pp from 1.8% to 3.5% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.9x and Debt / EBITDA is 5.0x. Net Debt / EBITDA jumped on 1.3x from 1.5x to 2.9x in 2017. Debt jumped on 59.7% while cash jumped on 25.2%.
Appendix 1: Peers in Mining
Below we provide Jiangxi Copper Co Ltd benchmarking against other companies in Mining 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 Dynamics Holdings Ltd ($476) | 81.4% | -73.9% | -72.2% | 1,640.2% | |
| Mongolia Energy Corp Ltd ($276) | 89.7% | -95.8% | 2,361.6% | 1,178.3% | |
| China Kingstone Mining Holdings Ltd ($1380) | -55.6% | 155.2% | -79.8% | 234.0% | |
| Hengxing Gold Holding Co Ltd ($2303) | | 3,467.3% | 78.0% | 157.6% | |
| China Silver Group Ltd ($815) | -2.1% | 1.0% | 12.1% | 139.5% | |
| |
|---|
| Median (29 companies) | -1.2% | -5.1% | -20.8% | 6.1% | 34.3% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 5.1% | 39.6% | 93.0% | 87.4% | |
| REX Global Entertainment Holdings Ltd ($164) | -7.8% | -0.8% | 88.6% | 87.3% | |
| Grand T G Gold Holdings Ltd ($8299) | | | 57.3% | 59.0% | |
| Sun International Resources Ltd ($8029) | 73.1% | 64.8% | 69.4% | 58.8% | |
| Kaz Minerals ($847) | 41.1% | 46.1% | 35.5% | 46.1% | |
| |
|---|
| Median (23 companies) | 14.0% | 15.4% | 15.5% | 24.0% | 3.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Grand T G Gold Holdings Ltd ($8299) | | | 53.7% | 58.9% | |
| Kaz Minerals ($847) | 51.5% | 29.1% | 21.4% | 39.4% | |
| MMG Ltd ($1208) | 29.9% | 31.4% | 24.5% | 37.7% | |
| Hengshi Mining Investments Ltd ($1370) | 52.0% | 45.4% | 35.3% | 36.6% | |
| Midas Holdings Ltd ($1021) | 22.2% | 23.7% | 22.0% | 29.6% | |
| |
|---|
| Median (23 companies) | 7.8% | 5.2% | 5.1% | 11.5% | 5.8% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Polymetallic Mining Ltd ($2133) | 43.3% | 54.7% | 35.1% | 387.1% | |
| Kaz Minerals ($847) | 136.5% | 168.8% | 168.7% | 41.9% | |
| MMG Ltd ($1208) | 22.6% | 41.9% | 100.4% | 31.0% | |
| Mongolia Energy Corp Ltd ($276) | 1,061.7% | 30,555.4% | 1,973.0% | 20.9% | |
| Midas Holdings Ltd ($1021) | 75.1% | 47.3% | 31.3% | 19.8% | |
| |
|---|
| Median (16 companies) | 16.8% | 15.8% | 12.1% | 7.0% | 1.7% |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Silver Group Ltd ($815) | 31.6% | 35.8% | -0.2% | 21.7% | |
| United Co RUSAL PLC ($486) | -9.0% | 6.3% | 12.3% | 9.0% | |
| Hengshi Mining Investments Ltd ($1370) | 60.1% | 20.7% | 7.9% | 7.9% | |
| Zijin Mining Group Co Ltd ($2899) | 9.2% | 6.5% | 2.6% | 7.1% | |
| Grand T G Gold Holdings Ltd ($8299) | | -4.6% | 5.3% | 6.4% | |
| |
|---|
| Median (31 companies) | 2.7% | 0.8% | -1.1% | 1.9% | 7.6% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| MMG Ltd ($1208) | 2.0x | 10.2x | 20.2x | 10.4x | |
| Kaz Minerals ($847) | 2.9x | 5.5x | 18.7x | 8.8x | |
| Grand T G Gold Holdings Ltd ($8299) | | | 9.6x | 8.2x | |
| Midas Holdings Ltd ($1021) | 6.5x | 8.7x | 8.0x | 8.1x | |
| Zhaojin Mining Industry Co Ltd ($1818) | 4.3x | 4.7x | 6.5x | 6.5x | |
| |
|---|
| Median (15 companies) | 1.9x | 4.4x | 3.8x | 4.4x | 2.7x |
|---|
