Central China Real Estate Ltd demonstrates profitable growth
27/03/2015 • About Central China Real Estate Ltd (
$832) • By InTwits
Pay attention to Central China Real Estate Ltd as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Central China Real Estate Ltd showed growth in the last financial year. Central China Real Estate Ltd's revenue surged on 32.8% in FY2014. At the same time the company well managed its profitability and also showed EBITDA growth of 17.2% for the same period.
If we look for the longer period the company showed fast revenue growth of 11.6% from 2011 to 2014 annualy. EBITDA surged on 3.26% from 2011 to 2014 annualy.
Central China Real Estate Ltd ($832) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 4,516 | 6,638 | 6,346 | 6,951 | 9,229 |
|---|
| Revenue growth, % | | 47.0% | -4.4% | 9.5% | 32.8% |
|---|
| Gross margin, % | 34.2% | 38.8% | 35.4% | 34.1% | 33.6% |
|---|
| SG&A, % | 8.37% | 6.63% | 9.77% | 12.2% | 12.0% |
|---|
| EBITDA | 1,184 | 2,106 | 1,694 | 1,979 | 2,318 |
|---|
| EBITDA growth, % | | 77.9% | -19.6% | 16.8% | 17.2% |
|---|
| EBITDA margin, % | 26.2% | 31.7% | 26.7% | 28.5% | 25.1% |
|---|
| Net Income | 545 | 668 | 823 | 1,026 | 883 |
|---|
| Net Income margin, % | 12.1% | 10.1% | 13.0% | 14.8% | 9.57% |
|---|
| |
| CAPEX | 213 | 457 | 609 | 780 | 609 |
|---|
| CAPEX/Revenue, % | 4.71% | 6.88% | 9.59% | 11.2% | 6.60% |
|---|
| Debt | 5,015 | 5,379 | 6,570 | 8,183 | 9,557 |
|---|
| Cash | 3,370 | 3,256 | 3,950 | 4,813 | 5,019 |
|---|
| Net Debt/EBITDA | 1.4x | 1.0x | 1.5x | 1.7x | 2.0x |
|---|
| |
| ROIC, % | 15.1% | 20.5% | 13.6% | 13.0% | 12.8% |
|---|
| ROE, % | 16.5% | 16.4% | 16.8% | 18.3% | 14.2% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 28.5% in FY2013 to 25.1% in FY2014. If we look for the longer period EBITDA margin dropped on 6.60 pp from 31.7% in 2011 to 25.1% in 2014.
Central China Real Estate Ltd shows attractive ROIC at 12.8% for the last 12 months which assumes stable development model. Three years ago it was higher at 20.5%. Average ROIC for the last three years was 13.1%.
Net Income margin dropped on 5.20 pp from 14.8% to 9.60% in 2014. In the last 3 years Central China Real Estate Ltd's Net Income margin decreased slightly on 0.500 pp from 10.1% in 2011 to 9.60% in 2014.
Central China Real Estate Ltd operates at ROE of 14.2%. It's average ROE for the last three years was 16.4%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.Central China Real Estate Ltd's CAPEX/Revenue was 6.60% in FY2014. The company's CAPEX/Revenue decreased slightly on 0.278 pp from 6.88% in 2011 to 6.60% in 2014. For the last three years the average CAPEX/Revenue was 9.14%.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 2.0x Net Debt/EBITDA. In the longer period Central China Real Estate Ltd's leverage surged on 0.95x from 1.01x in 2011 to 1.96x in 2014.
Peers in Real Estate
Below we provide Central China Real Estate 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% |
| Rivera Holdings Ltd ($281) | | 222.2% | 197.1% | -89.9% | 2,067.2% |
| 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% |
| |
|---|
| Median (101 companies) | | 12.8% | 17.1% | 10.6% | 9.7% |
|---|
| Central China Real Estate Ltd ($832) | | 47.0% | -4.4% | 9.5% | 32.8% |
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% |
| Nanyang Holdings Ltd ($212) | 91.2% | 89.4% | 90.5% | 91.3% | 89.6% |
| |
|---|
| Median (91 companies) | 43.7% | 43.6% | 45.0% | 45.8% | 46.9% |
|---|
| Central China Real Estate Ltd ($832) | 34.2% | 38.8% | 35.4% | 34.1% | 33.6% |
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 (100 companies) | 35.1% | 37.1% | 33.1% | 30.3% | 29.6% |
|---|
| Central China Real Estate Ltd ($832) | 26.2% | 31.7% | 26.7% | 28.5% | 25.1% |
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 (101 companies) | 5.9% | 7.8% | 7.9% | 8.5% | 5.8% |
|---|
| Central China Real Estate Ltd ($832) | 4.7% | 6.9% | 9.6% | 11.2% | 6.6% |
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% |
| Redco Properties Group Ltd ($1622) | | 10.0% | 14.9% | 31.7% | 17.6% |
| China South City Holdings Ltd ($1668) | 17.9% | 14.0% | 15.2% | 15.9% | 15.9% |
| |
|---|
| Median (104 companies) | 4.4% | 4.2% | 3.5% | 4.0% | 3.4% |
|---|
| Central China Real Estate Ltd ($832) | 15.1% | 20.5% | 13.6% | 13.0% | 12.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Cheuk Nang Holdings Ltd ($131) | | 53.2x | | 177.3x | 901.7x |
| Tian An China Investment Co Ltd ($28) | -0.0x | 2.4x | 13.2x | 15.1x | 486.6x |
| 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 |
| |
|---|
| Median (84 companies) | 1.7x | 2.2x | 2.3x | 2.8x | 2.4x |
|---|
| Central China Real Estate Ltd ($832) | 1.4x | 1.0x | 1.5x | 1.7x | 2.0x |
