Sino Hotels Holdings Ltd reports 22.0% CAPEX growth while 3.5% Revenue decline
26/08/2015 • About Sino Hotels Holdings Ltd (
$1221) • By InTwits
Sino Hotels Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 39.6% in FY2015 vs. 43.1% in FY2014 vs. 42.8% in FY2011
- Sino Hotels Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's in pair with industry average of 15.3%.
- CAPEX is quite volatile: 22.0 in FY2015, 18.0 in FY2014, 7.3 in FY2013, 7.0 in FY2012, 7.2 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.1%
- It operates with high leverage: Net Debt/EBITDA is -5.4x 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.
Sino Hotels Holdings Ltd ($1221) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 284.4 | 339.4 | 331.4 | 328.9 | 317.4 | -3.5% |
| Gross Profit | 198.1 | 242.0 | 233.4 | 226.7 | 208.7 | -7.9% |
| SG&A | | | 37.5 | 39.1 | 41.1 | 5.1% |
| EBITDA | 121.7 | 157.9 | 152.2 | 141.7 | 125.7 | -11.3% |
| Net Income | 183.3 | 235.0 | 240.8 | 234.5 | 204.0 | -13.0% |
Balance Sheet
|
|---|
| Cash | 27.0 | 24.6 | 188.7 | 428.6 | 673.3 | 57.1% |
| Short Term Debt | 42.7 | 40.7 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 580.6 | 0.8 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 7.2 | 7.0 | 7.3 | 18.0 | 22.0 | 22.0% |
Ratios
|
|---|
| Revenue growth | 32.7% | 19.4% | -2.4% | -0.8% | -3.5% | |
| EBITDA growth | 50.3% | 29.8% | -3.6% | -6.9% | -11.3% | |
| Gross Margin | 69.7% | 71.3% | 70.4% | 68.9% | 65.8% | -3.2% |
| EBITDA Margin | 42.8% | 46.5% | 45.9% | 43.1% | 39.6% | -3.5% |
| Net Income Margin | 64.5% | 69.2% | 72.7% | 71.3% | 64.3% | -7.0% |
| SG&A, % of revenue | | | 11.3% | 11.9% | 13.0% | 1.1% |
| CAPEX, % of revenue | 2.5% | 2.1% | 2.2% | 5.5% | 6.9% | 1.4% |
| ROIC | 2.1% | 3.2% | 3.0% | 2.7% | 2.1% | -0.6% |
| ROE | 5.7% | 7.0% | 6.8% | 6.2% | 5.2% | -1.0% |
| Net Debt/EBITDA | 4.9x | 0.1x | -1.2x | -3.0x | -5.4x | -2.3x |
Revenue and profitability
Sino Hotels Holdings Ltd's Revenue decreased on 3.5% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.5 pp from 43.1% to 39.6% in FY2015.
Gross Margin decreased on 3.2 pp from 68.9% to 65.8% in FY2015. SG&A as a % of Revenue increased slightly on 1.1 pp from 11.9% to 13.0% in FY2015.
Net Income marign decreased on 7.0 pp from 71.3% to 64.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.9% in FY2015. CAPEX/Revenue increased on 4.9 pp from 2.1% in FY2012 to 6.9% in FY2015. It's average level of CAPEX/Revenue for the last three years was 4.9%.
Return on investment
The company operates at low ROIC (2.08%) and ROE (5.19%). ROIC decreased slightly on 0.58 pp from 2.7% to 2.1% in FY2015. ROE decreased slightly on 1.0 pp from 6.2% to 5.2% in FY2015.
Leverage (Debt)
The company has no debt. Cash surged on 57.1% in FY2015.
Appendix 1: Peers in Lodging
Below we provide Sino Hotels Holdings 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) | | 69.3% | -36.2% | 35.4% | -33.8% |
| NagaCorp Ltd ($3918) | 48.7% | 24.6% | 23.7% | 17.2% | |
| Emperor Entertainment Hotel Ltd ($296) | | 35.9% | 13.8% | 11.7% | -10.2% |
| Far East Consortium International Ltd/HK ($35) | | 6.4% | 111.9% | 9.0% | 25.7% |
| |
|---|
| Median (21 companies) | 32.0% | 14.4% | 13.8% | 0.8% | -1.4% |
|---|
| Sino Hotels Holdings Ltd ($1221) | | 19.4% | -2.4% | -0.8% | -3.5% |
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% | |
| Emperor Entertainment Hotel Ltd ($296) | 70.9% | 77.1% | 75.6% | 76.8% | 70.9% |
| Asia Standard Hotel Group Ltd ($292) | 52.5% | 60.7% | 73.4% | 72.1% | 67.6% |
| NagaCorp Ltd ($3918) | 73.2% | 72.9% | 72.1% | 67.4% | |
| |
|---|
| Median (15 companies) | 45.7% | 50.4% | 46.3% | 48.0% | 59.7% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 69.7% | 71.3% | 70.4% | 68.9% | 65.8% |
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% |
| Emperor Entertainment Hotel Ltd ($296) | 38.7% | 44.9% | 46.4% | 46.9% | 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% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 42.8% | 46.5% | 45.9% | 43.1% | 39.6% |
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% | 13.2% | 10.1% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 2.5% | 2.1% | 2.2% | 5.5% | 6.9% |
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) | 8.8% | 7.9% | 6.7% | 5.0% | 5.8% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 2.1% | 3.2% | 3.0% | 2.7% | 2.1% |
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) | 0.1x | 0.5x | 0.6x | 0.7x | 4.8x |
|---|
| Sino Hotels Holdings Ltd ($1221) | 4.9x | 0.1x | -1.2x | -3.0x | -5.4x |
