China Overseas Land & Investment Ltd's revenue growth was 36.6% and EBITDA growth 24.6% annually over the last three years
31/03/2015 • About China Overseas Land & Investment Ltd (
$688) • By InTwits
China Overseas Land & Investment Ltd is a growth stock in Real Estate industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
China Overseas Land & Investment Ltd showed growth in the last financial year. The company's revenue surged on 58.8% in FY2014. Together with revenue growth China Overseas Land & Investment Ltd also managed to keep EBITDA growth. EBITDA grew 55.0% for the same period.
In the longer period the company showed fast revenue growth of 36.6% from 2011 to 2014 annualy. EBITDA surged on 24.6% from 2011 to 2014 annualy.
China Overseas Land & Investment Ltd ($688) financials for the last 5 years
| mln. HKD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 44,313 | 51,332 | 64,581 | 82,469 | 130,957 |
|---|
| Revenue growth, % | | 15.8% | 25.8% | 27.7% | 58.8% |
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| Gross margin, % | 40.1% | 40.3% | 38.3% | 32.5% | 30.0% |
|---|
| SG&A, % | 4.30% | 3.70% | 3.15% | 3.42% | 3.05% |
|---|
| EBITDA | 20,009 | 22,248 | 26,758 | 27,785 | 43,067 |
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| EBITDA growth, % | | 11.2% | 20.3% | 3.8% | 55.0% |
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| EBITDA margin, % | 45.2% | 43.3% | 41.4% | 33.7% | 32.9% |
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| Net Income | 12,373 | 15,464 | 18,722 | 23,044 | 27,200 |
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| Net Income margin, % | 27.9% | 30.1% | 29.0% | 27.9% | 20.8% |
|---|
| |
| CAPEX | 1,707 | 1,601 | 1,703 | 4,577 | 6,258 |
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| CAPEX/Revenue, % | 3.85% | 3.12% | 2.64% | 5.55% | 4.78% |
|---|
| Debt | 44,538 | 42,794 | 59,614 | 73,542 | 98,556 |
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| Cash | 31,574 | 17,841 | 39,880 | 40,876 | 58,281 |
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| Net Debt/EBITDA | 0.6x | 1.1x | 0.7x | 1.2x | 0.9x |
|---|
| |
| ROIC, % | 20.9% | 18.0% | 18.4% | 15.1% | 18.5% |
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| ROE, % | 25.6% | 24.5% | 23.6% | 23.4% | 22.3% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 33.7% in FY2013 to 32.9% in FY2014. In the longer period EBITDA margin dropped on 10.4 pp from 43.3% in 2011 to 32.9% in 2014.
China Overseas Land & Investment Ltd shows attractive ROIC at 18.5% for the last 12 months which assumes stable development model. During the last three years it increased slightly - it was 18.0% in FY2011. Average ROIC for the last three years was 17.3%.
Net Income margin dropped on 7.10 pp from 27.9% to 20.8% in 2014. In the longer period the company's Net Income margin dropped on 9.30 pp from 30.1% in 2011 to 20.8% in 2014.
China Overseas Land & Investment Ltd operates at ROE of 22.3%. Average ROE for the last three years was 23.1%.
Capital expenditures (CAPEX)
In FY2014 China Overseas Land & Investment Ltd had CAPEX/Revenue of 4.78%. The company's CAPEX/Revenue surged on 1.66 pp from 3.12% in 2011 to 4.78% in 2014. It's average level of CAPEX/Revenue for the last three years was 4.32%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.9x Net Debt/EBITDA. If we look for the longer period leverage dropped on 0.19x from 1.12x in 2011 to 0.94x in 2014.
Valuation vs. comparable companies
The company trades at 5.6x EV/EBITDA which is 74.9% lower than 22.4x Real Estate industry avearge calculated based on 185 companies. The company trades at 7.4x P/E which is 74.4% lower than 29.1x Real Estate industry avearge calculated based on 85 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 6.6x EV/(EBITDA-CAPEX) which is higher vs. -6.4x Real Estate industry avearge calculated based on 65 companies.
Peers in Real Estate
Below you can find China Overseas Land & Investment 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% |
| 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 (110 companies) | | 16.4% | 17.2% | 10.7% | 7.4% |
|---|
| China Overseas Land & Investment Ltd ($688) | | 15.8% | 25.8% | 27.7% | 58.8% |
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 (101 companies) | 43.2% | 43.3% | 42.9% | 43.4% | 42.3% |
|---|
| China Overseas Land & Investment Ltd ($688) | 40.1% | 40.3% | 38.3% | 32.5% | 30.0% |
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 (110 companies) | 35.2% | 38.8% | 34.1% | 30.2% | 29.6% |
|---|
| China Overseas Land & Investment Ltd ($688) | 45.2% | 43.3% | 41.4% | 33.7% | 32.9% |
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% |
| Silver Grant International Industries Ltd ($171) | 19.3% | 100.8% | 134.5% | 193.1% | 204.1% |
| |
|---|
| Median (111 companies) | 5.3% | 7.6% | 7.9% | 8.5% | 5.8% |
|---|
| China Overseas Land & Investment Ltd ($688) | 3.9% | 3.1% | 2.6% | 5.5% | 4.8% |
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 (114 companies) | 4.5% | 4.6% | 3.8% | 4.0% | 3.5% |
|---|
| China Overseas Land & Investment Ltd ($688) | 20.9% | 18.0% | 18.4% | 15.1% | 18.5% |
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 (92 companies) | 1.6x | 2.1x | 2.2x | 2.7x | 2.4x |
|---|
| China Overseas Land & Investment Ltd ($688) | 0.6x | 1.1x | 0.7x | 1.2x | 0.9x |
