Tern Properties Co Ltd reports 24.0% EBITDA growth and 8.6 pp EBITDA Margin growth from 78.4% to 86.9%
16/06/2015 • About Tern Properties Co Ltd (
$277) • By InTwits
Tern Properties Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tern Properties Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.2%. At the same time it's in pair with industry average of 44.0%.
- CAPEX is quite volatile: 1.1 in FY2015, 1.9 in FY2014, 30.5 in FY2013, 0.14 in FY2012, 30.2 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tern Properties Co Ltd ($277) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 68.200 | 71.645 | 79.277 | 88.969 | 99.480 | 11.8% |
| Gross Profit | 66.082 | 69.282 | 77.987 | 87.527 | 98.178 | 12.2% |
| SG&A | | | | | 30.386 | |
| EBITDA | 56.528 | 73.771 | 89.454 | 69.710 | 86.457 | 24.0% |
| Net Income | 411.956 | 394.744 | 702.471 | 250.846 | 266.742 | 6.3% |
Balance Sheet
|
|---|
| Cash | 32.261 | 61.863 | 38.446 | 19.890 | 46.087 | 131.7% |
| Short Term Debt | 8.746 | 67.460 | 12.910 | 25.617 | 29.387 | 14.7% |
| Long Term Debt | 388.123 | 238.326 | 184.503 | 116.120 | 81.000 | -30.2% |
Cash flow
|
|---|
| Capex | 30.165 | 0.141 | 30.542 | 1.891 | 1.149 | -39.2% |
Ratios
|
|---|
| Revenue growth | 3.1% | 5.1% | 10.7% | 12.2% | 11.8% | |
| EBITDA growth | -7.8% | 30.5% | 21.3% | -22.1% | 24.0% | |
| Gross Margin | 96.9% | 96.7% | 98.4% | 98.4% | 98.7% | 0.3% |
| EBITDA Margin | 82.9% | 103.0% | 112.8% | 78.4% | 86.9% | 8.6% |
| Net Income Margin | 604.0% | 551.0% | 886.1% | 281.9% | 268.1% | -13.8% |
| SG&A, % of revenue | | | | | 30.5% | 30.5% |
| CAPEX, % of revenue | 44.2% | 0.2% | 38.5% | 2.1% | 1.2% | -1.0% |
| ROIC | 2.2% | 2.6% | 2.7% | 1.9% | 2.2% | 0.4% |
| ROE | 20.3% | 16.4% | 23.8% | 7.4% | 7.3% | -0.0% |
| Net Debt/EBITDA | 6.5x | 3.3x | 1.8x | 1.7x | 0.7x | -1.0x |
Revenue and profitability
The company's Revenue jumped on 11.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 30.8 pp from -55.5% to -24.7% in 2015.
Gross Margin showed almost no change in FY2015.
Net Income marign dropped on 13.8 pp from 282% to 268% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Tern Properties Co Ltd had CAPEX/Revenue of 1.2%. The company's CAPEX/Revenue increased slightly on 0.96 pp from 0.20% in FY2012 to 1.2% in FY2015. Average CAPEX/Revenue for the last three years was 13.9%.
Return on investment
The company operates at low ROIC (2.22%) and ROE (7.33%). ROIC showed almost no change in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is 1.3x. Net Debt / EBITDA dropped on 1.0x from 1.7x to 0.7x in FY2015. Debt dropped on 22.1% in FY2015 while cash surged on 132% in FY2015.
Appendix 1: Peers in Real Estate
Below you can find Tern 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, %
| 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% | 5.0% | 0.4% |
|---|
| Tern Properties Co Ltd ($277) | | 5.1% | 10.7% | 12.2% | 11.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| Allied Properties HK Ltd ($56) | 94.3% | 95.0% | 94.3% | 93.5% | |
| |
|---|
| Median (154 companies) | 43.4% | 41.9% | 40.0% | 38.9% | 27.3% |
|---|
| Tern Properties Co Ltd ($277) | 96.9% | 96.7% | 98.4% | 98.4% | 98.7% |
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% | 26.4% | 16.0% |
|---|
| Tern Properties Co Ltd ($277) | 82.9% | 103.0% | 112.8% | 78.4% | 86.9% |
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) | 5.9% | 5.6% | 6.1% | 4.7% | 1.6% |
|---|
| Tern Properties Co Ltd ($277) | 44.2% | 0.2% | 38.5% | 2.1% | 1.2% |
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% | 4.0% | 3.9% | 3.8% | 0.9% |
|---|
| Tern Properties Co Ltd ($277) | 2.2% | 2.6% | 2.7% | 1.9% | 2.2% |
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 | 2.3x | 2.8x | 3.0x | -18.9x |
|---|
| Tern Properties Co Ltd ($277) | 6.5x | 3.3x | 1.8x | 1.7x | 0.7x |
