Redco Properties Group Ltd's fundamentals demonstrate strong growth profile
26/03/2015 • About Redco Properties Group Ltd (
$1622) • By InTwits
Pay attention to Redco Properties Group Ltd as a growth stock. Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.
Growth story
Redco Properties Group Ltd showed fast growth in the last financial year. The company's revenue surged on 17.4% in FY2014. Together with revenue growth Redco Properties Group Ltd also managed to keep EBITDA growth. EBITDA grew -13.6% for the same period.
If we look for the longer period the company showed fast revenue growth of 37.2% from 2011 to 2014 annualy. EBITDA surged on 61.0% from 2011 to 2014 annualy.
Redco Properties Group Ltd ($1622) financials for the last 5 years
| mln. | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 1,528 | 1,356 | 1,551 | 2,985 | 3,503 |
|---|
| Revenue growth, % | | -11.3% | 14.4% | 92.4% | 17.4% |
|---|
| Gross margin, % | 21.5% | 19.8% | 29.5% | 32.4% | 27.0% |
|---|
| SG&A, % | 3.99% | 6.97% | 7.62% | 4.39% | 5.76% |
|---|
| EBITDA | 267 | 172 | 327 | 830 | 717 |
|---|
| EBITDA growth, % | | -35.7% | 90.2% | 153.9% | -13.6% |
|---|
| EBITDA margin, % | 17.5% | 12.7% | 21.1% | 27.8% | 20.5% |
|---|
| Net Income | 118 | 85 | 66 | 400 | 347 |
|---|
| Net Income margin, % | 7.69% | 6.30% | 4.24% | 13.4% | 9.91% |
|---|
| |
| CAPEX | 2 | 8 | 5 | 6 | 12 |
|---|
| CAPEX/Revenue, % | 0.107% | 0.612% | 0.352% | 0.208% | 0.347% |
|---|
| Debt | 769 | 1,204 | 1,325 | 1,454 | 2,761 |
|---|
| Cash | 272 | 138 | 501 | 696 | 596 |
|---|
| Net Debt/EBITDA | 1.9x | 6.2x | 2.5x | 0.9x | 3.0x |
|---|
| |
| ROIC, % | | 10.0% | 14.9% | 31.7% | 17.6% |
|---|
| ROE, % | | 20.0% | 12.8% | 55.8% | 26.9% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. If we look for the longer period EBITDA margin surged on 7.80 pp from 12.7% in 2011 to 20.5% in 2014.
We call Redco Properties Group Ltd an attractive growth stock as together with the growth it delivers high ROIC at 17.6%. Three years ago it was lower at 10.0%. It's average level of ROIC for the last three years was 21.4%.
The company's Net Income margin dropped on 3.50 pp from 13.4% to 9.90% in 2014. In the longer period the company's Net Income margin surged on 3.60 pp from 6.30% in 2011 to 9.90% in 2014.
Redco Properties Group Ltd operates at ROE of 26.9%. Average ROE for the last three years was 31.8%.
Capital expenditures (CAPEX)
In FY2014 Redco Properties Group Ltd had CAPEX/Revenue of 0.347%. The company showed big decline in CAPEX/Revenue of 0.264 pp from 0.612% in 2011 to 0.347% in 2014. It's average CAPEX/Revenue for the last three years was 0.303%.
Leverage (Debt)
Redco Properties Group Ltd has medium debt level at 3.0x Net Debt/EBITDA to maintain high growth. If we look for the longer period Redco Properties Group Ltd's leverage dropped on 3.19x from 6.21x in 2011 to 3.02x in 2014.
Peers in Real Estate
Below we provide Redco Properties Group Ltd benchmarking against other companies in Real Estate 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.
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 (95 companies) | | 11.9% | 17.2% | 10.6% | 9.7% |
|---|
| Redco Properties Group Ltd ($1622) | | -11.3% | 14.4% | 92.4% | 17.4% |
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% |
| Nanyang Holdings Ltd ($212) | 91.2% | 89.4% | 90.5% | 91.3% | 89.6% |
| |
|---|
| Median (85 companies) | 43.9% | 43.6% | 45.6% | 45.8% | 48.6% |
|---|
| Redco Properties Group Ltd ($1622) | 21.5% | 19.8% | 29.5% | 32.4% | 27.0% |
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% |
| Chinese Estates Holdings Ltd ($127) | -348.6% | 340.9% | 356.2% | 91.6% | 195.5% |
| 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% |
| |
|---|
| Median (94 companies) | 35.2% | 39.9% | 35.8% | 32.4% | 33.5% |
|---|
| Redco Properties Group Ltd ($1622) | 17.5% | 12.7% | 21.1% | 27.8% | 20.5% |
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 (95 companies) | 7.0% | 7.8% | 7.7% | 8.4% | 6.0% |
|---|
| Redco Properties Group Ltd ($1622) | 0.1% | 0.6% | 0.4% | 0.2% | 0.3% |
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 (98 companies) | 4.5% | 4.2% | 3.8% | 4.0% | 3.6% |
|---|
| Redco Properties Group Ltd ($1622) | | 10.0% | 14.9% | 31.7% | 17.6% |
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 (79 companies) | 1.7x | 2.1x | 2.2x | 2.7x | 2.4x |
|---|
| Redco Properties Group Ltd ($1622) | 1.9x | 6.2x | 2.5x | 0.9x | 3.0x |
