China Communications Construction Co Ltd revenue jumped on 13.2% and EBITDA Margin showed almost no change
29/03/2018 • About China Communications Construction Co Ltd (
$1800) • By InTwits
China Communications Construction 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: 9.1% in 2017 vs. 9.3% in 2016 vs. 8.2% in 2013
- China Communications Construction Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 9,619 in 2017, 5,310 in 2016, 8,384 in 2015, 5,048 in 2014, 3,724 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 Communications Construction Co Ltd ($1800) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 331,798 | 366,042 | 403,616 | 406,331 | 460,067 | 13.2% |
| Gross Profit | 33,938 | 39,272 | 49,754 | 54,499 | 60,437 | 10.9% |
| SG&A | 12,045 | 14,543 | 18,639 | 22,487 | 25,634 | 14.0% |
| EBITDA | 27,261 | 31,621 | 34,378 | 37,712 | 41,847 | 11.0% |
| Net Income | 12,568 | 13,985 | 15,828 | 17,210 | 20,943 | 21.7% |
Balance Sheet
|
|---|
| Cash | 81,238 | 71,823 | 94,960 | 108,720 | 129,197 | 18.8% |
| Short Term Debt | 87,818 | 91,034 | 86,605 | 99,484 | 82,680 | -16.9% |
| Long Term Debt | 99,157 | 137,801 | 168,578 | 173,996 | 178,522 | 2.6% |
Cash flow
|
|---|
| Capex | 8,096 | 11,032 | 14,016 | 10,711 | 14,088 | 31.5% |
Ratios
|
|---|
| Revenue growth | 12.4% | 10.3% | 10.3% | 0.7% | 13.2% | |
| EBITDA growth | 5.9% | 16.0% | 8.7% | 9.7% | 11.0% | |
| Gross Margin | 10.2% | 10.7% | 12.3% | 13.4% | 13.1% | -0.3% |
| EBITDA Margin | 8.2% | 8.6% | 8.5% | 9.3% | 9.1% | -0.2% |
| Net Income Margin | 3.8% | 3.8% | 3.9% | 4.2% | 4.6% | 0.3% |
| SG&A, % of revenue | 3.6% | 4.0% | 4.6% | 5.5% | 5.6% | 0.0% |
| CAPEX, % of revenue | 2.4% | 3.0% | 3.5% | 2.6% | 3.1% | 0.4% |
| ROIC | 7.0% | 7.0% | 6.4% | 6.1% | 6.5% | 0.5% |
| ROE | 13.8% | 13.2% | 12.0% | 11.2% | 12.3% | 1.1% |
| Net Debt/EBITDA | 3.9x | 5.0x | 4.7x | 4.4x | 3.2x | -1.2x |
China Communications Construction Co Ltd ($1800) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 82,402 | 106,897 | 116,715 | 174,896 | 2.3% | 4.6% | 8.7% | 27.6% |
| Net Income | 3,141 | 4,398 | 4,190 | 8,852 | 36.2% | -6.8% | -1.4% | 61.8% |
Balance Sheet
|
|---|
| Cash | 95,988 | 102,837 | 98,055 | 131,441 | 7.6% | 16.7% | 21.6% | 18.7% |
| Short Term Debt | 100,994 | 123,377 | 122,617 | 98,946 | 2.3% | 11.8% | 26.8% | -15.8% |
| Long Term Debt | 188,406 | 184,933 | 197,877 | 177,798 | 3.4% | -0.5% | 0.3% | 2.8% |
Ratios
|
|---|
| Gross Margin | 13.0% | 13.7% | 12.5% | 14.6% | 1.5% | 0.5% | -0.7% | -2.1% |
| Net Income Margin | 3.8% | 4.1% | 3.6% | 5.1% | 0.9% | -0.5% | -0.4% | 1.1% |
Revenue and profitability
The company's Revenue surged on 13.2%. Revenue growth showed acceleration in 17Q4 - it increased 27.6% 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 showed almost no change 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 China Communications Construction Co Ltd had CAPEX/Revenue of 3.1%. CAPEX/Revenue showed almost no change from 2014 to 2017. It's average CAPEX/Revenue for the last three years was 3.1%.
Return on investment
The company operates at good ROE (12.31%) while ROIC is low (6.53%). ROIC showed almost no change in 2017. ROE increased slightly on 1.1 pp from 11.2% to 12.3% in 2017.
Leverage (Debt)
Debt level is 3.2x Net Debt / EBITDA and 6.2x Debt / EBITDA. Net Debt / EBITDA dropped on 1.2x from 4.4x to 3.2x in 2017. Debt decreased on 4.5% while cash surged on 18.8%.
Appendix 1: Peers in Engineering&Construction
Below you can find China Communications Construction Co Ltd benchmarking vs. other companies in Engineering&Construction 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 |
|---|
| China National Culture Group Ltd ($745) | -76.8% | -55.8% | 592.3% | 86.7% | |
| Kingbo Strike Ltd ($1421) | 19.5% | 21.3% | -47.7% | 81.8% | |
| NEW Concepts Holdings Ltd ($2221) | 20.7% | 100.9% | 68.6% | 80.8% | |
| Richly Field China Development Ltd ($313) | -45.0% | 464.2% | -65.7% | 77.2% | |
| Glory Flame Holdings Ltd ($8059) | 30.8% | 20.2% | 1.0% | 42.9% | |
| |
|---|
| Median (35 companies) | 24.8% | 20.8% | 10.3% | 6.4% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Broad Greenstate International Co Ltd ($1253) | 28.7% | 35.8% | 36.7% | 37.4% | |
| PYI Corp Ltd ($498) | 5.1% | 16.3% | 24.1% | 31.1% | |
| In Construction Holdings Ltd ($1500) | 21.9% | 21.6% | 29.5% | 26.3% | |
| Tysan Holdings Ltd ($687) | 11.7% | 18.4% | 17.8% | 22.8% | |
| Chevalier International Holdings Ltd ($25) | 26.3% | 25.9% | 24.2% | 21.9% | |
| |
|---|
| Median (27 companies) | 16.9% | 16.1% | 16.3% | 12.9% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Beijing Capital International Airport Co Ltd ($694) | 52.9% | 50.3% | 51.6% | 50.9% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 20.6% | 36.2% | 60.9% | 38.4% | |
| Sino Credit Holdings Ltd ($628) | | 16.0% | -5.1% | 34.9% | |
| Broad Greenstate International Co Ltd ($1253) | 24.4% | 28.8% | 31.0% | 30.9% | |
| In Construction Holdings Ltd ($1500) | 20.4% | 19.1% | 25.9% | 23.3% | |
| |
|---|
| Median (31 companies) | 11.2% | 9.7% | 9.0% | 5.3% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Louis XIII Holdings Ltd ($577) | 29.5% | 9.3% | 16.1% | 47.3% | |
| Sino Credit Holdings Ltd ($628) | | 4.7% | 8.8% | 46.8% | |
| Richly Field China Development Ltd ($313) | 6.7% | 1.1% | 7.6% | 30.5% | |
| PYI Corp Ltd ($498) | 4.2% | 24.5% | 13.1% | 19.7% | |
| Grand Ming Group Holdings Ltd ($1271) | 16.1% | 8.7% | 33.8% | 14.0% | |
| |
|---|
| Median (26 companies) | 3.3% | 1.8% | 2.1% | 2.4% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| In Construction Holdings Ltd ($1500) | 52.8% | 37.0% | 49.4% | 40.4% | |
| NEW Concepts Holdings Ltd ($2221) | 51.0% | 78.8% | 39.0% | 23.3% | |
| Chun Sing Engineering Holdings Ltd ($2277) | 98.3% | 54.9% | 43.7% | 21.6% | |
| Broad Greenstate International Co Ltd ($1253) | 85.1% | 51.2% | 26.0% | 20.9% | |
| Tysan Holdings Ltd ($687) | 10.6% | 14.0% | 21.0% | 20.7% | |
| |
|---|
| Median (37 companies) | 6.1% | 5.4% | 5.6% | 2.5% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Ngai Shun Holdings Ltd ($1246) | -0.6x | -0.8x | -2.1x | 257.8x | |
| Shun Cheong Holdings ($650) | 9.2x | | 7.6x | 67.0x | |
| KFM Kingdom Holdings Ltd ($3816) | -0.1x | 0.5x | 0.4x | 53.8x | |
| Chun Wo Development Holdings Ltd ($711) | 8.1x | 12.6x | 15.9x | 10.5x | |
| Grand Ming Group Holdings Ltd ($1271) | 6.3x | 4.1x | 5.9x | 5.8x | |
| |
|---|
| Median (24 companies) | 0.3x | 0.2x | 0.7x | 0.9x | |
|---|
