Hon Kwok Land Investment Co Ltd reports 335% Net Income growth while 5.6% Revenue decline
25/06/2015 • About Hon Kwok Land Investment Co Ltd (
$160) • By InTwits
Hon Kwok Land Investment Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hon Kwok Land Investment Co Ltd is a company in decline: FY2015 revenue growth was -5.6%, 5 years revenue CAGR was -15.0%
- The company operates at negative EBITDA Margin: -676.6%
- Hon Kwok Land Investment Co Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -105.3%0
- Hon Kwok Land Investment Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 141.9%. At the same time it's in pair with industry average of 196.3%.
- CAPEX is quite volatile: 1,069 in FY2015, 552 in FY2014, 375 in FY2013, 185 in FY2012, 132 in FY2011
- The company has unprofitable business model: ROIC is at -19.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hon Kwok Land Investment Co Ltd ($160) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 145.5 | 899.4 | 238.4 | 382.2 | 360.7 | -5.6% |
| Gross Profit | 63.0 | 312.1 | 142.2 | 208.0 | 191.6 | -7.9% |
| SG&A | | | | | 83.6 | |
| EBITDA | 3.1 | 245.2 | 70.9 | -12.5 | -2,440.3 | 19,433.5% |
| Net Income | 464.3 | 216.6 | 401.9 | 436.8 | 1,898.2 | 334.6% |
Balance Sheet
|
|---|
| Cash | 687.3 | 488.8 | 171.8 | 320.2 | 541.1 | 69.0% |
| Short Term Debt | 839.2 | 817.3 | 1,304.3 | 1,601.6 | 2,698.6 | 68.5% |
| Long Term Debt | 1,541.7 | 1,980.9 | 2,264.3 | 2,433.3 | 2,676.2 | 10.0% |
Cash flow
|
|---|
| Capex | 131.9 | 185.1 | 375.0 | 552.2 | 1,068.8 | 93.5% |
Ratios
|
|---|
| Revenue growth | -82.1% | 518.0% | -73.5% | 60.4% | -5.6% | |
| EBITDA growth | -97.4% | 7,913.1% | -71.1% | -117.6% | 19,433.5% | |
| Gross Margin | 43.3% | 34.7% | 59.6% | 54.4% | 53.1% | -1.3% |
| EBITDA Margin | 2.1% | 27.3% | 29.8% | -3.3% | -676.6% | -673.3% |
| Net Income Margin | 319.0% | 24.1% | 168.6% | 114.3% | 526.3% | 412.0% |
| SG&A, % of revenue | | | | | 23.2% | 23.2% |
| CAPEX, % of revenue | 90.6% | 20.6% | 157.3% | 144.5% | 296.3% | 151.8% |
| ROIC | -0.0% | 3.2% | 0.7% | -0.2% | -19.4% | -19.2% |
| ROE | 12.4% | 5.1% | 8.6% | 8.1% | 27.8% | 19.8% |
| Net Debt/EBITDA | 553.4x | 9.4x | 47.9x | | | 0.0x |
Revenue and profitability
Hon Kwok Land Investment Co Ltd's Revenue decreased on 5.6% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 673 pp from -3.3% to -677% in FY2015.
Gross Margin decreased slightly on 1.3 pp from 54.4% to 53.1% in FY2015.
Net Income marign surged on 412 pp from 114% to 526% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 296%. CAPEX/Revenue jumped on 276 pp from 20.6% in FY2012 to 296% in FY2015. It's average CAPEX/Revenue for the last three years was 199%.
Return on investment
The company operates at negative ROIC (-19.36%) and low but positive ROE (27.83%). ROIC dropped on 19.2 pp from -0.21% to -19.4% in FY2015. ROE surged on 19.8 pp from 8.1% to 27.8% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.3x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt jumped on 33.2% in FY2015 while cash jumped on 69.0% in FY2015.
Appendix 1: Peers in Real Estate
Below we provide Hon Kwok Land Investment Co Ltd benchmarking against other companies in Real Estate 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 |
|---|
| 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% | 15.2% | 13.1% | 5.0% | 3.9% |
|---|
| Hon Kwok Land Investment Co Ltd ($160) | | 518.0% | -73.5% | 60.4% | -5.6% |
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) | 43.7% | 42.1% | 40.0% | 38.9% | 57.5% |
|---|
| Hon Kwok Land Investment Co Ltd ($160) | 43.3% | 34.7% | 59.6% | 54.4% | 53.1% |
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) | 35.4% | 28.9% | 27.9% | 26.9% | 26.9% |
|---|
| Hon Kwok Land Investment Co Ltd ($160) | 2.1% | 27.3% | 29.8% | -3.3% | -676.6% |
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% | 7.8% |
|---|
| Hon Kwok Land Investment Co Ltd ($160) | 90.6% | 20.6% | 157.3% | 144.5% | 296.3% |
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% | 3.9% | 3.8% | 2.2% |
|---|
| Hon Kwok Land Investment Co Ltd ($160) | -0.0% | 3.2% | 0.7% | -0.2% | -19.4% |
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 (140 companies) | 2.1x | 2.3x | 2.7x | 3.0x | 0.5x |
|---|
