On Thursday, China Zenix Auto International Ltd (NYSE:ZX) fell -7.51% with the overall traded volume of 27,194 shares above its average volume of 20,006 shares. The company has the market value of $81.52M and its EPS ratio for the past year was $-0.02. The company finished business at $1.60.
China Zenix Auto International Limited (ZX), the leading commercial vehicle wheel manufacturer in China in both the aftermarket and OEM market by sales volume, recently declared its unaudited financial results for the fourth quarter and full year ended December 31, 2016.
2016 Fourth Quarter Results:
Revenue for the fourth quarter ended December 31, 2016 was RMB 591.90M (US$85.30M) from RMB587.50M for the fourth quarter of 2015. The increase in revenue on a year-over-year basis was mainly driven by renewed growth in truck sales in China, especially for the heavy- and medium-duty trucks.
Aftermarket sales in China reduced by 13.50% year-over-year to RMB248.40M (US$35.80M) in the fourth quarter of 2016 from RMB287.20M in the fourth quarter of 2015. Total unit sales in the aftermarket reduced by 14.20% year-over-year while pricing rose slightly. The aftermarket wheel segment remained weak as the logistic-based truck market remained sluggish and price competition stayed intense.
Sales to the Chinese OEM market raised by 20.40% year-over-year to RMB255.70M (US$36.80M) in the fourth quarter of 2016 contrast to RMB212.30M in the same quarter of 2015. Total unit sales in the OEM market raised by 13.20% year-over-year as a result of strong truck sales, especially heavy- and medium-duty trucks, during the fourth quarter of 2016.
International sales reduced slightly by 0.20% year-over-year to RMB 87.80M (US$12.60M) in the fourth quarter of 2016 contrast to sales of RMB88.0M in the fourth quarter of 2015. Total unit sales in the international sales raised by 3.10% year-over-year in the fourth quarter of 2016 but the weaker economic environment in our main market, Southeast Asia, negatively affected overall sales.
In the fourth quarter of 2016, domestic aftermarket sales, domestic OEM sales and international sales contributed 42.0%, 43.20% and 14.80% of revenue, respectively.
Sales of tubed steel wheels comprised 52.40% of 2016 fourth quarter revenue contrast to 53.90% in the same quarter in 2015. Tubeless steel wheel sales represented 35.4% of fourth quarter revenue contrast to 36.50% in the same quarter of 2015. Tubed and tubeless steel wheel sales remained the main sources of revenue for the Company. However, sales of aluminum wheels raised and accounted for 7.90% of fourth quarter revenue as contrast to 4.70% in the same quarter a year ago.
Fourth quarter gross profit reduced by 21.30% to RMB 88.80M (US$12.80M), contrast to RMB112.90M in the same quarter in 2015. Gross margin was 15.0%, contrast with 19.20% in the fourth quarter of 2015. The decrease in gross margin on a year-over-year basis was mainly driven by the price appreciation of raw materials, namely steel, which outpaced Zenix’s wheel price increase.
Selling and distribution expenses raised by 0.70% to RMB45.40M (US$6.50M) from RMB45.10M in the fourth quarter of 2015. As a percentage of revenue, selling and distribution costs were 7.70% in the fourth quarter of 2016, contrast to 7.70% in the same quarter a year ago.
Research and development (“R&D”) expenses raised by 65.10% to RMB23.50M (US$3.40M), contrast to RMB14.30M in the fourth quarter of 2015. R&D as a percentage of revenue was 4.0% in the fourth quarter of 2016, contrast to 2.40% in same quarter of 2015.
Administrative expenses reduced by 9.60% to RMB 34.40M (US$5.0M) from RMB38.10M in the fourth quarter of 2015, mainly because of effective cost control measures partially offset by the increase of office building depreciation in the aluminum wheel production facility. As a percentage of revenue, administrative expenses were 5.80% in the fourth quarter of 2016, contrast to 6.50% of revenue in the fourth quarter of 2015.
Net loss and total comprehensive loss for the fourth quarter of 2016 was RMB11.60M (US$1.70M), contrast to net profit and total comprehensive income of RMB8.60M in the same quarter of 2015.
Basic and diluted loss per ADS in the fourth quarter of 2016 were RMB 0.23 (US$0.03) contrast to basic and diluted earnings per ADS of RMB0.17 in the same quarter of 2015.
In the fourth quarter of 2016, the Company recorded net cash outflows from operating activities of RMB41.40M (US$6.0M). Capital expenditures for the purchase of property, plant and equipment in the fourth quarter were RMB3.70M (US$0.50M). Deposits paid for acquisition of property, plant and equipment in the fourth quarter were RMB2.70M (US$0.40M).
During the fourth quarter of 2016 and 2015, the weighted average number of ordinary shares was 206.5 million and the weighted average number of ADSs was 51.60M.
2016 Full Year Results:
Revenue for the year ended December 31, 2016 was RMB2,249.50M (US$324.0M) contrast with RMB2,445.80M in 2015.
Aftermarket sales reduced by 14.50% to RMB1,021.30M (US$147.10M) in 2016, and represented 45.40% of total revenue. Sales to the Chinese OEM market rose by 5.20% to RMB856.70M (US$123.40M) and represented 38.10% of total revenue. International sales reduced by 15.0% to RMB371.50M (US$ 53.50M) contrast to last year, and represented 16.50% of total revenue.
Tubed steel wheel sales in 2016 accounted for 54.60% of revenue contrast with 56.10% in 2015. Tubeless steel wheel sales accounted for 36.40% of revenue contrast with 37.50% in 2015. With the increase in market acceptance, aluminum wheel sales accounted for 4.60% of revenue in 2016 contrast with 1.10% in 2015.
Gross profit for year 2016 was RMB 387.50M (US$55.80M), contrast with RMB363.80M in 2015. Gross margin rose to 17.20% in 2016 from 14.90% in 2015.
Loss before taxation for the year 2016 was RMB25.60M (US$3.70M), contrast with loss before taxation of RMB30.10M in 2015.
Net loss and total comprehensive loss for full year 2016 was RMB25.90M (US$3.70M), contrast with net loss and total comprehensive loss of RMB28.60M in 2015. Basic and diluted loss per ordinary share and per ADS for the full year ended December 31, 2016 were RMB0.13 (US$0.02) and RMB0.50 (US$0.07), respectively.
As of December 31, 2016, Zenix Auto had bank balances and cash of RMB896.80M (US$129.20M) and fixed bank deposits with a maturity period over three months of RMB290.0M (US$41.80M). Total equity attributable to owners of the Company was RMB2,537.60M (US$365.50M).
For the year ended December 31, 2016, the Company recorded cash inflows from operating activities of RMB179.20M (US$25.80M). Capital expenditures for the purchase of property, plant and equipment were RMB15.10M (US$2.20M). Deposits paid for acquisition of property, plant and equipment were RMB14.50M (US$2.10M).
Mr. Junqiu Gao, Deputy CEO and Chief Sales and Marketing Officer of Zenix Auto, commented, “Our OEM sales growth continues to reflect the turnaround in the heavy- and medium-duty truck market in China during 2016. We have raised our investment in research and development to develop new materials and wheel designs for the steel and aluminum wheel markets, and to maintain our market leadership.”
Mr. Martin Cheung, CFO of Zenix Auto, commented, “We continue to focus on generating positive cash flow from operations to strengthen our cash position and balance sheet. We are managing our current assets and liabilities to contribute to our financial condition.”
The company has 206.50M shares outstanding and 18.00% shares of the company were owned by institutional investors. The company has 0.25 value in price to sale ratio while price to book ratio was recorded as 0.22. The company earned $-0.80M in prior twelve months on revenue of $326.10M. It beta stands at 0.52.
Analyst recommendation for this stock stands at 2.00.