TAI Cheung Holdings Ltd reports 1,762% EBITDA growth and 19.5 pp EBITDA Margin growth from 6.3% to 25.8%
16/06/2015 • About TAI Cheung Holdings Ltd (
$88) • By InTwits
TAI Cheung Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TAI Cheung Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is 1.7%
- EBITDA Margin is quite volatile: 25.8% in FY2015, 6.3% in FY2014, 49.8% in FY2013, 49.5% in FY2012, 49.2% in FY2011
- TAI Cheung Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.1%. At the same time it's a lot of higher than industry average of 50.1%.
- CAPEX is quite volatile: 96.9 in FY2015, 29.5 in FY2014, 0.10 in FY2013, 0.10 in FY2012, 0.30 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TAI Cheung Holdings Ltd ($88) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,461 | 1,382 | 992 | 100 | 454 | 352.6% |
| Gross Profit | 733 | 739 | 535 | 53 | 167 | 215.5% |
| SG&A | | | | | 50 | |
| EBITDA | 718 | 684 | 494 | 6 | 117 | 1,761.9% |
| Net Income | 706 | 738 | 566 | 1,013 | 554 | -45.3% |
Balance Sheet
|
|---|
| Cash | 1,981 | 3,028 | 2,173 | 2,133 | 2,321 | 8.8% |
| Short Term Debt | 125 | 119 | 113 | 107 | 104 | -2.9% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 0 | 0 | 0 | 30 | 97 | 228.5% |
Ratios
|
|---|
| Revenue growth | 159.3% | -5.4% | -28.2% | -89.9% | 352.6% | |
| EBITDA growth | 158.8% | -4.8% | -27.8% | -98.7% | 1,761.9% | |
| Gross Margin | 50.2% | 53.5% | 54.0% | 52.6% | 36.7% | -15.9% |
| EBITDA Margin | 49.2% | 49.5% | 49.8% | 6.3% | 25.8% | 19.5% |
| Net Income Margin | 48.3% | 53.4% | 57.0% | 1,008.5% | 121.9% | -886.6% |
| SG&A, % of revenue | | | | | 11.0% | 11.0% |
| CAPEX, % of revenue | 0.0% | 0.0% | 0.0% | 29.4% | 21.3% | -8.1% |
| ROIC | 15.5% | 13.1% | 8.7% | 0.1% | 1.7% | 1.6% |
| ROE | 15.8% | 14.7% | 10.3% | 16.5% | 8.2% | -8.3% |
| Net Debt/EBITDA | -2.6x | -4.3x | -4.2x | -321.6x | -18.9x | 302.7x |
Revenue and profitability
TAI Cheung Holdings Ltd's Revenue jumped on 353% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 14.9 pp from -20.7% to -5.8% in 2015.
Gross Margin dropped on 15.9 pp from 52.6% to 36.7% in FY2015.
Net Income marign dropped on 887 pp from 1,008% to 122% in FY2015.
Capital expenditures (CAPEX) and working capital investments
TAI Cheung Holdings Ltd's CAPEX/Revenue was 21.3% in FY2015. TAI Cheung Holdings Ltd's CAPEX/Revenue surged on 21.3 pp from 0.0072% in FY2012 to 21.3% in FY2015. For the last three years the average CAPEX/Revenue was 16.9%.The company invested a big chunk of EBITDA (82.6%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (1.66%) and ROE (8.23%). ROIC increased slightly on 1.6 pp from 0.088% to 1.7% in FY2015. ROE decreased on 8.3 pp from 16.5% to 8.2% in FY2015.
Leverage (Debt)
Debt level is -18.9x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA surged on 302.7x from -321.6x to -18.9x in FY2015. Debt decreased on 2.9% in FY2015 while cash increased on 8.8% in FY2015.
Appendix 1: Peers in Real Estate
Below you can find TAI Cheung Holdings 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Common Splendor International Health Industry Group Ltd ($286) | -0.9% | -0.5% | 1.9% | 4,120.2% | |
| Landsea Green Properties Co Ltd ($106) | -91.1% | -35.1% | -51.2% | 3,097.3% | |
| 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% | |
| Ceneric Holdings Ltd ($542) | -94.0% | -73.9% | -49.8% | 1,922.5% | |
| |
|---|
| Median (172 companies) | 14.1% | 15.6% | 13.1% | 5.1% | 0.4% |
|---|
| TAI Cheung Holdings Ltd ($88) | | -5.4% | -28.2% | -89.9% | 352.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tern Properties Co Ltd ($277) | 96.9% | 96.7% | 98.4% | 98.4% | 98.7% |
| GR Properties Ltd ($108) | 37.4% | 39.3% | | 98.2% | |
| Renhe Commercial Holdings Co Ltd ($1387) | 71.1% | 79.0% | 95.2% | 97.9% | |
| YT Realty Group Ltd ($75) | 91.5% | 94.4% | 96.6% | 96.7% | |
| ITC Properties Group Ltd ($199) | 29.8% | 22.8% | 92.9% | 95.2% | |
| |
|---|
| Median (154 companies) | 43.4% | 41.9% | 40.0% | 38.9% | 27.3% |
|---|
| TAI Cheung Holdings Ltd ($88) | 50.2% | 53.5% | 54.0% | 52.6% | 36.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ITC Properties Group Ltd ($199) | 24.0% | -125.5% | -2,995.7% | 1,685.3% | |
| Beijing Properties Holdings Ltd ($925) | 33.2% | -606.3% | 2,162.6% | 224.3% | |
| Chinese Estates Holdings Ltd ($127) | 340.9% | 356.2% | 91.6% | 195.5% | |
| Zall Development Group Ltd ($2098) | 73.6% | 105.3% | 133.1% | 143.2% | |
| Ceneric Holdings Ltd ($542) | -5.9% | -382.7% | -1,024.0% | 126.8% | |
| |
|---|
| Median (172 companies) | 35.2% | 28.9% | 27.9% | 26.9% | 16.0% |
|---|
| TAI Cheung Holdings Ltd ($88) | 49.2% | 49.5% | 49.8% | 6.3% | 25.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| LT Commercial Real Estate Ltd ($112) | 0.0% | 0.0% | 18.0% | 27,965.5% | |
| ITC Properties Group Ltd ($199) | 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) | 6.5% | 2.9% | 323.1% | 351.2% | |
| Liu Chong Hing Investment Ltd ($194) | 9.4% | 18.5% | 6.1% | 269.7% | |
| |
|---|
| Median (173 companies) | 6.0% | 5.6% | 6.1% | 4.5% | 0.7% |
|---|
| TAI Cheung Holdings Ltd ($88) | 0.0% | 0.0% | 0.0% | 29.4% | 21.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rykadan Capital Ltd ($2288) | 17.2% | -1.8% | -2.6% | 48.4% | -3.7% |
| LVGEM China Real Estate Invest ($95) | 0.2% | -0.2% | -1.1% | 22.1% | |
| Zall Development Group Ltd ($2098) | 39.0% | 19.2% | 17.6% | 18.7% | |
| China Overseas Land & Investment Ltd ($688) | 18.0% | 18.4% | 15.1% | 18.5% | |
| Hong Kong Ferry Holdings Co Ltd ($50) | 4.7% | 3.8% | 0.6% | 18.0% | |
| |
|---|
| Median (176 companies) | 4.6% | 3.9% | 3.8% | 3.8% | 1.2% |
|---|
| TAI Cheung Holdings Ltd ($88) | 15.5% | 13.1% | 8.7% | 0.1% | 1.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Properties Group Ltd ($1838) | 16.9x | 43.0x | 21.4x | 1,523.0x | |
| SRE Group Ltd ($1207) | 10.6x | 14.1x | 24.7x | 1,184.6x | |
| Cheuk Nang Holdings Ltd ($131) | 53.2x | | 177.3x | 901.7x | |
| Tian An China Investment Co Ltd ($28) | 2.4x | 13.2x | 15.1x | 486.6x | |
| Greenland Hong Kong Holdings Ltd ($337) | 3.7x | | 6.2x | 49.3x | |
| |
|---|
| Median (139 companies) | 2.1x | 2.4x | 2.8x | 3.0x | 0.7x |
|---|
| TAI Cheung Holdings Ltd ($88) | -2.6x | -4.3x | -4.2x | -321.6x | -18.9x |
