The numbers tell that Longfor Properties Co Ltd's growth is outstanding
25/03/2015 • About Longfor Properties Co Ltd (
$960) • By InTwits
Longfor Properties Co Ltd is an attractive growth stock in Real Estate industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Longfor Properties Co Ltd showed fast growth in the last financial year. The company's revenue surged on 22.8% in FY2014. In addition to revenue Longfor Properties Co Ltd also keeps delivering EBITDA growth. It was 7.28% in FY2014
If we look for the longer period the company showed fast revenue growth of 28.4% from 2011 to 2014 annualy. EBITDA surged on 6.68% from 2011 to 2014 annualy.
Longfor Properties Co Ltd ($960) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 15,093 | 24,093 | 27,893 | 41,510 | 50,991 |
|---|
| Revenue growth, % | | 59.6% | 15.8% | 48.8% | 22.8% |
|---|
| Gross margin, % | 33.8% | 40.5% | 40.1% | 27.8% | 26.5% |
|---|
| SG&A, % | 5.04% | 5.61% | 5.60% | 4.75% | 4.63% |
|---|
| EBITDA | 6,881 | 11,102 | 11,012 | 12,563 | 13,477 |
|---|
| EBITDA growth, % | | 61.3% | -0.8% | 14.1% | 7.3% |
|---|
| EBITDA margin, % | 45.6% | 46.1% | 39.5% | 30.3% | 26.4% |
|---|
| Net Income | 4,130 | 6,328 | 6,301 | 8,037 | 8,354 |
|---|
| Net Income margin, % | 27.4% | 26.3% | 22.6% | 19.4% | 16.4% |
|---|
| |
| CAPEX | 8,797 | 8,892 | 14,260 | 15,072 | 17,630 |
|---|
| CAPEX/Revenue, % | 58.3% | 36.9% | 51.1% | 36.3% | 34.6% |
|---|
| Debt | 17,324 | 23,967 | 32,837 | 37,703 | 47,741 |
|---|
| Cash | 9,863 | 14,121 | 18,384 | 14,399 | 18,794 |
|---|
| Net Debt/EBITDA | 1.1x | 0.9x | 1.3x | 1.9x | 2.1x |
|---|
| |
| ROIC, % | 21.4% | 23.9% | 17.0% | 15.4% | 13.6% |
|---|
| ROE, % | 29.4% | 33.4% | 24.3% | 24.0% | 19.7% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 30.3% in FY2013 to 26.4% in FY2014. If we look for the longer period the company showed big decline in EBITDA margin of 19.7 pp from 46.1% in 2011 to 26.4% in 2014.
We call Longfor Properties Co Ltd an attractive growth stock as together with the growth it delivers high ROIC at 13.6%. Three years ago it was considerably higher at 23.9%. It's average level of ROIC for the last three years was 15.3%.
The company's Net Income margin dropped on 3 pp from 19.4% to 16.4% in 2014. If we look for the longer period the company's Net Income margin dropped on 9.90 pp from 26.3% in 2011 to 16.4% in 2014.
Longfor Properties Co Ltd operates at ROE of 19.7%. It's average ROE for the last three years was 22.7%.
Capital expenditures (CAPEX)
To fuel this fast growth Longfor Properties Co Ltd had to invest in CAPEX.In FY2014 Longfor Properties Co Ltd had CAPEX/Revenue of 34.6%. CAPEX/Revenue decreased on 2.33 pp from 36.9% in 2011 to 34.6% in 2014. It's average CAPEX/Revenue for the last three years was 40.7%.
Leverage (Debt)
The company has medium debt level at 2.1x Net Debt/EBITDA to maintain high growth. If we look for the longer period Longfor Properties Co Ltd's leverage surged on 1.26x from 0.89x in 2011 to 2.15x in 2014.
Peers in Real Estate
Below you can find Longfor Properties Co Ltd benchmarking vs. other companies in Real Estate 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| LVGEM China Real Estate Invest ($95) | | -0.1% | -27.5% | -21.9% | 3,008.3% |
| Rykadan Capital Ltd ($2288) | | -20.2% | -94.0% | 91.5% | 1,252.9% |
| Gemdale Properties & Investment Corp Ltd ($535) | | -78.5% | -36.0% | 43.2% | 831.0% |
| Hong Kong Ferry Holdings Co Ltd ($50) | | -30.3% | -3.0% | -28.6% | 696.6% |
| Winfull Group Holdings Ltd ($183) | | 57.1% | -68.3% | -34.7% | 394.8% |
| |
|---|
| Median (89 companies) | | 12.8% | 16.9% | 10.4% | 7.5% |
|---|
| Longfor Properties Co Ltd ($960) | | 59.6% | 15.8% | 48.8% | 22.8% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tern Properties Co Ltd ($277) | 95.8% | 96.9% | 96.7% | 98.4% | 98.4% |
| GR Properties Ltd ($108) | 50.7% | 37.4% | 39.3% | | 98.2% |
| ITC Properties Group Ltd ($199) | 44.7% | 29.8% | 22.8% | 92.9% | 95.2% |
| Wah Ha Realty Co Ltd ($278) | 91.9% | 88.7% | 96.3% | 96.0% | 93.2% |
| Tian Teck Land Ltd ($266) | 67.8% | 79.0% | 86.0% | 86.9% | 88.9% |
| |
|---|
| Median (79 companies) | 42.7% | 43.6% | 45.0% | 45.8% | 48.6% |
|---|
| Longfor Properties Co Ltd ($960) | 33.8% | 40.5% | 40.1% | 27.8% | 26.5% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| ITC Properties Group Ltd ($199) | 116.8% | 24.0% | -125.5% | -2,995.7% | 1,685.3% |
| Sino Land Co Ltd ($83) | 82.1% | 152.4% | 107.7% | 94.3% | 116.3% |
| Asia Orient Holdings Ltd ($214) | 659.0% | 229.8% | -82.0% | 141.6% | 112.0% |
| SOHO China Ltd ($410) | 48.0% | 113.8% | 113.6% | 80.8% | 104.0% |
| Associated International Hotels Ltd ($105) | 48.0% | 72.1% | 79.9% | 88.8% | 84.2% |
| |
|---|
| Median (88 companies) | 35.1% | 38.8% | 34.1% | 32.4% | 31.5% |
|---|
| Longfor Properties Co Ltd ($960) | 45.6% | 46.1% | 39.5% | 30.3% | 26.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| ITC Properties Group Ltd ($199) | 13.6% | 25.6% | 56.2% | 4,202.4% | 1,304.7% |
| Wanda Hotel Development Co Ltd ($169) | | | 5.9% | 24.1% | 1,091.1% |
| Pacific Century Premium Developments Ltd ($432) | 4.2% | 6.5% | 2.9% | 323.1% | 351.2% |
| Liu Chong Hing Investment Ltd ($194) | 1.0% | 9.4% | 18.5% | 6.1% | 269.7% |
| Henry Group Holdings Ltd ($859) | 370.5% | 364.6% | 432.0% | 616.8% | 195.1% |
| |
|---|
| Median (89 companies) | 5.9% | 7.7% | 7.4% | 8.0% | 6.0% |
|---|
| Longfor Properties Co Ltd ($960) | 58.3% | 36.9% | 51.1% | 36.3% | 34.6% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Rykadan Capital Ltd ($2288) | 43.3% | 17.2% | -1.8% | -2.6% | 48.4% |
| LVGEM China Real Estate Invest ($95) | 1.9% | 0.2% | -0.2% | -1.1% | 22.1% |
| Hong Kong Ferry Holdings Co Ltd ($50) | 6.6% | 4.7% | 3.8% | 0.6% | 18.0% |
| China South City Holdings Ltd ($1668) | 17.9% | 14.0% | 15.2% | 15.9% | 15.9% |
| Times Property Holdings Ltd ($1233) | | 5.4% | 6.9% | 14.6% | 15.5% |
| |
|---|
| Median (92 companies) | 4.5% | 4.2% | 3.3% | 4.0% | 3.4% |
|---|
| Longfor Properties Co Ltd ($960) | 21.4% | 23.9% | 17.0% | 15.4% | 13.6% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Cheuk Nang Holdings Ltd ($131) | | 53.2x | | 177.3x | 901.7x |
| Coastal Greenland Ltd ($1124) | 11.2x | 4.2x | 2.2x | 7.1x | 26.6x |
| Shui On Land Ltd ($272) | 10.5x | 7.9x | 22.1x | 13.2x | 17.1x |
| Easyknit International Holdings Ltd ($1218) | -2.1x | -1.6x | -0.8x | 3.0x | 17.0x |
| Jingrui Holdings Ltd ($1862) | 2.5x | 4.5x | 6.0x | 6.6x | 14.6x |
| |
|---|
| Median (73 companies) | 1.9x | 2.2x | 2.2x | 2.7x | 2.4x |
|---|
| Longfor Properties Co Ltd ($960) | 1.1x | 0.9x | 1.3x | 1.9x | 2.1x |
