China Natural Investment Co Ltd reports 680% EBITDA decline in 2020 and 16.2% Revenue decline
25/09/2020 • About China Natural Investment Co Ltd (
$8250) • By InTwits
China Natural Investment Co Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- China Natural Investment Co Ltd is a company in decline: FY2020 revenue growth was -16.2%, 5 years revenue CAGR was -4.2%
- The company operates at negative EBITDA Margin: -30.5%
- EBITDA Margin is quite volatile: -30.5% in FY2020, 4.4% in FY2019, -19.2% in FY2018, 0.1% in FY2017, 50.7% in FY2016
- China Natural Investment Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's in pair with industry average of 4.7%
- CAPEX is quite volatile: 9 m in FY2020, 19 m in FY2019, 9 m in FY2018, 18 m in FY2017, 24 m in FY2016
- In the last 5 years the company invested considerably less than D&A: 79 m vs. 118 m. In FY2020 this situation was still the same: CAPEX was 9 while D&A was 24
- The company has unprofitable business model: ROIC is -20.6%
- It operates with high leverage: Net Debt/EBITDA is 16.8x while industry average is 37.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 16.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 12.9 pp from -0.46% to 12.4% in FY2020.
Gross Margin decreased on 8.5 pp from 20.1% to 11.7% in FY2020. SG&A as a % of Revenue decreased on 2.4 pp from 20.6% to 18.2% in FY2020.
Net Income margin dropped on 28.7 pp from -9.5% to -38.1% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.5% in FY2020. CAPEX/Revenue decreased slightly on 1.1 pp from 4.7% in FY2017 to 3.5% in FY2020. For the last three years the average CAPEX/Revenue was 4.2%.
Return on investment
The company operates at negative ROIC (-20.6%) and ROE (-23.9%). ROIC dropped on 18.5 pp from -2.2% to -20.6% in FY2020. ROE dropped on 18.0 pp from -5.9% to -23.9% in FY2020.
Leverage (Debt)
Debt level is 16.8x Net Debt / EBITDA and Debt / EBITDA. Debt dropped on 95.0% while cash dropped on 19.2%.
China Natural Investment Co Ltd has no short term refinancing risk: cash is higher than short term debt (4,445.8%).
Average interest expence charged on company's debt was 123% in FY2020.
Management team
The company has 606 employees. The number of employees dropped on 61.4%. Average revenue per employee in FY2020 was 437,870 and it jumped on 117%.
Financial and operational results
FY ended 30/06/2020
China Natural Investment Co Ltd ($8250) key annual financial indicators| mln. | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 366.6 | 379.3 | 298.2 | 316.8 | 265.3 | -16.2% |
| Gross Profit | 122.5 | 68.0 | 60.0 | 63.8 | 30.9 | -51.5% |
| SG&A | 51.4 | 35.2 | 64.7 | 65.2 | 48.3 | -25.9% |
| EBITDA | 185.7 | 0.5 | -57.3 | 14.0 | -80.9 | -679.8% |
| EBIT | | -37.0 | -86.0 | -14.0 | -105.0 | |
| Interest expence | | 8.1 | 6.9 | 7.1 | 7.2 | 2.0% |
| Tax | | | | -9.1 | -10.7 | |
| Net Income | -130.0 | -140.2 | -75.7 | -30.0 | -101.2 | |
Balance Sheet
|
|---|
| Cash | 216.1 | 91.3 | 170.8 | 151.1 | 122.1 | -19.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 2.7 | |
| Long Term Debt | 145.3 | 106.6 | 111.8 | 117.3 | 3.1 | -97.3% |
Cash flow
|
|---|
| Capex | 24.2 | 17.7 | 8.5 | 19.4 | 9.4 | -51.6% |
Ratios
|
|---|
| Revenue growth | 11.6% | 3.5% | -21.4% | 6.2% | -16.2% | |
| EBITDA growth | -687.5% | -99.7% | -11,384.3% | -124.3% | -679.8% | |
|
|---|
| Gross Margin | 33.4% | 17.9% | 20.1% | 20.1% | 11.7% | -8.5% |
| EBITDA Margin | 50.7% | 0.1% | -19.2% | 4.4% | -30.5% | -34.9% |
| EBIT Margin | | -9.8% | -28.8% | -4.4% | -39.6% | -35.1% |
| SG&A, % of revenue | 14.0% | 9.3% | 21.7% | 20.6% | 18.2% | -2.4% |
| Net Income Margin | -35.5% | -37.0% | -25.4% | -9.5% | -38.1% | -28.7% |
| CAPEX, % of revenue | 6.6% | 4.7% | 2.9% | 6.1% | 3.5% | -2.6% |
|
|---|
| ROIC | 18.4% | -4.5% | -12.4% | -2.2% | -20.6% | -18.5% |
| ROE | -19.0% | -22.1% | -13.8% | -5.9% | -23.9% | -18.0% |
| Net Debt/EBITDA | -0.4x | 30.1x | | -2.4x | |
| Interest expence / Average debt | | 6.5% | 6.3% | 6.2% | 123.1% | 116.9% |
People
|
|---|
| Employees | | 1,460 | 1,439 | 1,569 | 606 | -61.4% |
| Revenue/Employee, th. | | 260 | 207 | 202 | 438 | 116.9% |
Peers in Healthcare-Services
Below we provide China Natural Investment Co Ltd benchmarking against other companies in Healthcare-Services 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.
