HKR International Ltd CAPEX dropped on 27.9% in 2015 and Revenue dropped on 17.4%
24/06/2015 • About HKR International Ltd (
$480) • By InTwits
HKR International Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 45.4% in FY2015, 42.3% in FY2014, 29.6% in FY2013, 56.4% in FY2012, 98.7% in FY2011
- HKR International Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.9%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: 317 in FY2015, 439 in FY2014, 961 in FY2013, 364 in FY2012, 1,151 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HKR International Ltd ($480) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,801 | 1,664 | 5,119 | 4,125 | 3,408 | -17.4% |
| Gross Profit | 513 | 469 | 1,333 | 920 | 1,258 | 36.8% |
| SG&A | 432 | 440 | 544 | 543 | 411 | -24.3% |
| EBITDA | 1,777 | 939 | 1,518 | 1,745 | 1,547 | -11.4% |
| Net Income | 1,648 | 747 | 998 | 835 | 910 | 9.0% |
Balance Sheet
|
|---|
| Cash | 2,380 | 2,629 | 3,082 | 5,312 | 5,520 | 3.9% |
| Short Term Debt | 1,521 | 3,705 | 1,801 | 2,321 | 2,434 | 4.9% |
| Long Term Debt | 2,316 | 1,160 | 4,009 | 4,168 | 3,553 | -14.7% |
Cash flow
|
|---|
| Capex | 1,151 | 364 | 961 | 439 | 317 | -27.9% |
Ratios
|
|---|
| Revenue growth | -2.1% | -7.6% | 207.6% | -19.4% | -17.4% | |
| EBITDA growth | 19.4% | -47.2% | 61.7% | 15.0% | -11.4% | |
| Gross Margin | 28.5% | 28.2% | 26.0% | 22.3% | 36.9% | 14.6% |
| EBITDA Margin | 98.7% | 56.4% | 29.6% | 42.3% | 45.4% | 3.1% |
| Net Income Margin | 91.5% | 44.9% | 19.5% | 20.2% | 26.7% | 6.5% |
| SG&A, % of revenue | 24.0% | 26.4% | 10.6% | 13.2% | 12.1% | -1.1% |
| CAPEX, % of revenue | 63.9% | 21.9% | 18.8% | 10.6% | 9.3% | -1.4% |
| ROIC | 9.4% | 3.9% | 6.1% | 6.4% | 5.4% | -1.0% |
| ROE | 13.0% | 5.3% | 6.7% | 5.3% | 5.5% | 0.3% |
| Net Debt/EBITDA | 0.8x | 2.4x | 1.8x | 0.7x | 0.3x | -0.4x |
Revenue and profitability
HKR International Ltd's Revenue dropped on 17.4% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.1 pp from 42.3% to 45.4% in FY2015.
Gross Margin jumped on 14.6 pp from 22.3% to 36.9% in FY2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 13.2% to 12.1% in FY2015.
Net Income marign increased on 6.5 pp from 20.2% to 26.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 9.3% in FY2015. CAPEX/Revenue dropped on 12.6 pp from 21.9% in FY2012 to 9.3% in FY2015. It's average CAPEX/Revenue for the last three years was 12.9%.
Return on investment
The company operates at low ROIC (5.36%) and ROE (5.53%). ROIC decreased slightly on 1.0 pp from 6.4% to 5.4% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 3.9x. Net Debt / EBITDA dropped on 0.4x from 0.7x to 0.3x in FY2015. Debt decreased on 7.7% in FY2015 while cash increased on 3.9% in FY2015.
Appendix 1: Peers in Real Estate
Below you can find HKR International 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) | 15.0% | 15.6% | 12.4% | 5.1% | 3.9% |
|---|
| HKR International Ltd ($480) | | -7.6% | 207.6% | -19.4% | -17.4% |
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) | 43.7% | 42.1% | 41.1% | 39.2% | 57.5% |
|---|
| HKR International Ltd ($480) | 28.5% | 28.2% | 26.0% | 22.3% | 36.9% |
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% | 20.4% |
|---|
| HKR International Ltd ($480) | 98.7% | 56.4% | 29.6% | 42.3% | 45.4% |
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% | 5.3% | 6.1% | 4.5% | 1.2% |
|---|
| HKR International Ltd ($480) | 63.9% | 21.9% | 18.8% | 10.6% | 9.3% |
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% | 4.0% | 3.8% | 3.8% | 1.7% |
|---|
| HKR International Ltd ($480) | 9.4% | 3.9% | 6.1% | 6.4% | 5.4% |
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 | 3.4x |
|---|
| HKR International Ltd ($480) | 0.8x | 2.4x | 1.8x | 0.7x | 0.3x |
