Nine Dragons Paper Holdings Ltd Debt dropped on 16.0% while EBITDA increased on 5.5%
22/09/2020 • About Nine Dragons Paper Holdings Ltd (
$2689) • By InTwits
Nine Dragons Paper Holdings Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company has business model with low profitability: ROIC is 8.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.4x while industry average is -3.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Nine Dragons Paper Holdings Ltd's Revenue decreased on 6.1%. During the last 5 years Revenue growth topped in FY2018 at 34.8% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.8 pp from 14.8% to 16.6% in FY2020.
Gross Margin increased on 2.1 pp from 15.4% to 17.6% in FY2020. SG&A as a % of Revenue increased slightly on 0.77 pp from 6.0% to 6.7% in FY2020.
Net Income margin increased slightly on 1.1 pp from 7.1% to 8.1% in FY2020.
Return on investment
The company operates at low ROIC (8.6%) and ROE (10.6%). ROIC showed almost no change in FY2020. ROE showed almost no change in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is 3.1x. Net Debt / EBITDA dropped on 0.4x from 2.8x to 2.4x in FY2020. Debt dropped on 16.0% while cash dropped on 33.2%.
Nine Dragons Paper Holdings Ltd has short term refinancing risk: cash is only 70.6% of short term debt.
Management team
Liu Ming Chung is a Nine Dragons Paper Holdings Ltd's CEO. Liu Ming Chung has spent 14 years with the company. The company's CFO Zhang Yuanfu has spent 12 years with the company.
Financial and operational results
Nine Dragons Paper Holdings Ltd ($2689) key annual financial indicators| mln. CNY | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 32,093 | 39,155 | 52,782 | 54,647 | 51,341 | -6.1% |
| Gross Profit | 5,861 | 7,976 | 11,585 | 8,439 | 9,027 | 7.0% |
| SG&A | 1,527 | 1,980 | 2,342 | 3,269 | 3,465 | 6.0% |
| EBITDA | 6,634 | 8,747 | 12,434 | 8,072 | 8,513 | 5.5% |
| Net Income | 1,122 | 4,384 | 7,848 | 3,860 | 4,168 | 8.0% |
Balance Sheet
|
|---|
| Cash | 11,276 | 6,484 | 9,045 | 8,377 | 5,595 | -33.2% |
| Short Term Debt | 11,993 | 12,116 | 18,141 | 14,595 | 7,926 | -45.7% |
| Long Term Debt | 20,852 | 16,833 | 14,571 | 16,714 | 18,361 | 9.9% |
Cash flow
|
|---|
| Capex | 1,838 | 3,659 | 6,387 | 5,815 | | |
Ratios
|
|---|
| Revenue growth | 6.6% | 22.0% | 34.8% | 3.5% | -6.1% | |
| EBITDA growth | 30.6% | 31.9% | 42.2% | -35.1% | 5.5% | |
|
|---|
| Gross Margin | 18.3% | 20.4% | 21.9% | 15.4% | 17.6% | 2.1% |
| EBITDA Margin | 20.7% | 22.3% | 23.6% | 14.8% | 16.6% | 1.8% |
| SG&A, % of revenue | 4.8% | 5.1% | 4.4% | 6.0% | 6.7% | 0.8% |
| Net Income Margin | 3.5% | 11.2% | 14.9% | 7.1% | 8.1% | 1.1% |
| CAPEX, % of revenue | 5.7% | 9.3% | 12.1% | 10.6% | | |
|
|---|
| ROIC | 7.7% | 10.8% | 15.4% | 8.1% | 8.6% | 0.5% |
| ROE | 4.4% | 15.7% | 23.9% | 10.4% | 10.6% | 0.2% |
| Net Debt/EBITDA | 3.3x | 2.6x | 1.9x | 2.8x | 2.4x | -0.4x |
Peers in Forest Products&Paper
Below you can find Nine Dragons Paper Holdings Ltd benchmarking vs. other companies in Forest Products&Paper 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.
