Emperor Entertainment Hotel Ltd CAPEX dropped on 72.5% in 2015 and Revenue dropped on 10.2%
24/06/2015 • About Emperor Entertainment Hotel Ltd (
$296) • By InTwits
Emperor Entertainment Hotel Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Emperor Entertainment Hotel Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.6%. At the same time it's a lot of higher than industry average of 5.6%.
- CAPEX is quite volatile: 103 in FY2015, 373 in FY2014, 180 in FY2013, 112 in FY2012, 83.0 in FY2011
- The company has highly profitable business model: ROIC is at 12.0%
- It operates with high leverage: Net Debt/EBITDA is -0.1x while industry average is -29.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Emperor Entertainment Hotel Ltd ($296) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,312 | 1,783 | 2,028 | 2,265 | 2,035 | -10.2% |
| Gross Profit | 931 | 1,375 | 1,534 | 1,739 | 1,442 | -17.1% |
| SG&A | | | 711 | 844 | 764 | -9.4% |
| EBITDA | 507 | 800 | 941 | 1,063 | 877 | -17.5% |
| Net Income | 332 | 465 | 549 | 600 | 504 | -16.0% |
Balance Sheet
|
|---|
| Cash | 856 | 899 | 2,006 | 410 | 674 | 64.3% |
| Short Term Debt | 184 | 230 | 226 | 907 | 38 | -95.8% |
| Long Term Debt | 73 | 0 | 0 | 0 | 508 | |
Cash flow
|
|---|
| Capex | 83 | 112 | 180 | 373 | 103 | -72.5% |
Ratios
|
|---|
| Revenue growth | 32.5% | 35.9% | 13.8% | 11.7% | -10.2% | |
| EBITDA growth | 30.4% | 57.7% | 17.6% | 13.0% | -17.5% | |
| Gross Margin | 70.9% | 77.1% | 75.6% | 76.8% | 70.9% | -5.9% |
| EBITDA Margin | 38.7% | 44.9% | 46.4% | 46.9% | 43.1% | -3.8% |
| Net Income Margin | 25.3% | 26.1% | 27.0% | 26.5% | 24.8% | -1.7% |
| SG&A, % of revenue | | | 35.1% | 37.2% | 37.6% | 0.3% |
| CAPEX, % of revenue | 6.3% | 6.3% | 8.9% | 16.5% | 5.0% | -11.4% |
| ROIC | 13.0% | 22.2% | 21.1% | 18.4% | 12.0% | -6.4% |
| ROE | 15.7% | 24.1% | 23.8% | 21.9% | 16.1% | -5.8% |
| Net Debt/EBITDA | -1.2x | -0.8x | -1.9x | 0.5x | -0.1x | -0.6x |
Revenue and profitability
The company's Revenue dropped on 10.2% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.8 pp from 46.9% to 43.1% in FY2015.
Gross Margin decreased on 5.9 pp from 76.8% to 70.9% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign decreased slightly on 1.7 pp from 26.5% to 24.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Emperor Entertainment Hotel Ltd had CAPEX/Revenue of 5.0%. CAPEX/Revenue decreased slightly on 1.2 pp from 6.3% in FY2012 to 5.0% in FY2015. It's average level of CAPEX/Revenue for the last three years was 10.1%.
Return on investment
The company operates at good ROIC (12.04%) and ROE (16.11%). ROIC decreased on 6.4 pp from 18.4% to 12.0% in FY2015. ROE decreased on 5.8 pp from 21.9% to 16.1% in FY2015.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 0.5x to -0.1x in FY2015. Debt dropped on 39.8% in FY2015 while cash surged on 64.3% in FY2015.
Appendix 1: Peers in Lodging
Below we provide Emperor Entertainment Hotel Ltd benchmarking against other companies in Lodging 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zhuhai Holdings Investment Group Ltd ($908) | 13.4% | 229.8% | 14.5% | 57.0% | |
| Carrianna Group Holdings Co Ltd ($126) | 13.0% | 69.3% | -36.2% | 35.4% | |
| NagaCorp Ltd ($3918) | 48.7% | 24.6% | 23.7% | 17.2% | |
| Far East Consortium International Ltd/HK ($35) | | 6.4% | 111.9% | 9.0% | 25.7% |
| Galaxy Entertainment Group Ltd ($27) | 113.8% | 37.8% | 16.4% | 8.7% | |
| |
|---|
| Median (21 companies) | 32.0% | 14.4% | 10.2% | 0.7% | 16.5% |
|---|
| Emperor Entertainment Hotel Ltd ($296) | | 35.9% | 13.8% | 11.7% | -10.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.7% | |
| Wynn Macau Ltd ($1128) | 97.6% | 97.9% | 98.3% | 98.5% | |
| Asia Standard Hotel Group Ltd ($292) | 52.5% | 60.7% | 73.4% | 72.1% | 67.6% |
| Sino Hotels Holdings Ltd ($1221) | 69.7% | 71.3% | 70.4% | 68.9% | |
| NagaCorp Ltd ($3918) | 73.2% | 72.9% | 72.1% | 67.4% | |
| |
|---|
| Median (15 companies) | 45.7% | 50.4% | 46.3% | 48.0% | 52.9% |
|---|
| Emperor Entertainment Hotel Ltd ($296) | 70.9% | 77.1% | 75.6% | 76.8% | 70.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Standard Hotel Group Ltd ($292) | 69.1% | -23.9% | 65.2% | 49.9% | 40.4% |
| Sino Hotels Holdings Ltd ($1221) | 42.8% | 46.5% | 45.9% | 43.1% | |
| Far East Consortium International Ltd/HK ($35) | 50.1% | 57.2% | 34.5% | 43.0% | 36.4% |
| NagaCorp Ltd ($3918) | 49.2% | 49.8% | 50.1% | 42.8% | |
| Macau Legend Development Ltd ($1680) | 56.6% | 48.6% | 39.8% | 41.8% | |
| |
|---|
| Median (21 companies) | 23.7% | 25.0% | 24.5% | 25.8% | 38.4% |
|---|
| Emperor Entertainment Hotel Ltd ($296) | 38.7% | 44.9% | 46.4% | 46.9% | 43.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Macau Legend Development Ltd ($1680) | 1.3% | 5.0% | 24.2% | 73.0% | |
| Regal Hotels International Holdings Ltd ($78) | 4.9% | 7.4% | 7.2% | 60.4% | |
| Shangri-La Asia Ltd ($69) | 26.5% | 48.5% | 33.1% | 41.2% | |
| Wynn Macau Ltd ($1128) | 3.2% | 5.2% | 11.0% | 28.2% | |
| NagaCorp Ltd ($3918) | 20.3% | 25.9% | 17.2% | 24.0% | |
| |
|---|
| Median (21 companies) | 6.5% | 7.4% | 11.0% | 10.8% | 10.1% |
|---|
| Emperor Entertainment Hotel Ltd ($296) | 6.3% | 6.3% | 8.9% | 16.5% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| MGM China Holdings Ltd ($2282) | 47.3% | 46.2% | 53.8% | 54.5% | |
| Wynn Macau Ltd ($1128) | 66.1% | 53.9% | 42.3% | 29.9% | |
| Galaxy Entertainment Group Ltd ($27) | 14.7% | 25.2% | 30.0% | 27.5% | |
| Sands China Ltd ($1928) | 14.5% | 14.2% | 24.4% | 26.7% | |
| SJM Holdings Ltd ($880) | 26.2% | 29.7% | 31.0% | 24.8% | |
| |
|---|
| Median (21 companies) | 5.2% | 7.6% | 5.7% | 3.9% | 5.8% |
|---|
| Emperor Entertainment Hotel Ltd ($296) | 13.0% | 22.2% | 21.1% | 18.4% | 12.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Regal Hotels International Holdings Ltd ($78) | | 5.0x | 8.7x | 11.8x | |
| Century City International Holdings Ltd ($355) | -58.1x | 6.5x | 9.3x | 11.2x | |
| Shangri-La Asia Ltd ($69) | 4.0x | 6.0x | 6.8x | 6.9x | |
| Zhuhai Holdings Investment Group Ltd ($908) | -3.7x | -4.1x | 11.1x | 6.7x | |
| Asia Standard Hotel Group Ltd ($292) | 3.5x | | 3.7x | 5.2x | 5.5x |
| |
|---|
| Median (20 companies) | 0.6x | 0.5x | 0.6x | 0.6x | 4.8x |
|---|
| Emperor Entertainment Hotel Ltd ($296) | -1.2x | -0.8x | -1.9x | 0.5x | -0.1x |
