New World China Land Ltd EBITDA dropped on 32.0% in 2015 and EBITDA Margin decreased on 6.2 pp from 42.0% to 35.7%
23/09/2015 • About New World China Land Ltd (
$917) • By InTwits
New World China Land Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- New World China Land Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.3%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 3,112 in FY2015, 2,569 in FY2014, 1,630 in FY2013, 1,078 in FY2012, 1,084 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
New World China Land Ltd ($917) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 13,557 | 12,529 | 16,154 | 21,850 | 17,459 | -20.1% |
| Gross Profit | 4,256 | 5,642 | 6,758 | 9,080 | 6,838 | -24.7% |
| SG&A | 363 | 1,677 | 1,898 | 1,988 | 2,200 | 10.7% |
| EBITDA | 4,331 | 5,928 | 6,686 | 9,174 | 6,240 | -32.0% |
| Net Income | 3,026 | 3,081 | 4,616 | 4,639 | 3,313 | -28.6% |
Balance Sheet
|
|---|
| Cash | 10,640 | 13,258 | 19,337 | 17,352 | 15,774 | -9.1% |
| Short Term Debt | 6,753 | 5,538 | 6,045 | 14,197 | 10,777 | -24.1% |
| Long Term Debt | 14,151 | 22,919 | 30,958 | 25,226 | 34,388 | 36.3% |
Cash flow
|
|---|
| Capex | 1,084 | 1,078 | 1,630 | 2,569 | 3,112 | 21.1% |
Ratios
|
|---|
| Revenue growth | 113.8% | -7.6% | 28.9% | 35.3% | -20.1% | |
| EBITDA growth | 42.9% | 36.9% | 12.8% | 37.2% | -32.0% | |
| Gross Margin | 31.4% | 45.0% | 41.8% | 41.6% | 39.2% | -2.4% |
| EBITDA Margin | 31.9% | 47.3% | 41.4% | 42.0% | 35.7% | -6.2% |
| Net Income Margin | 22.3% | 24.6% | 28.6% | 21.2% | 19.0% | -2.3% |
| SG&A, % of revenue | 2.7% | 13.4% | 11.7% | 9.1% | 12.6% | 3.5% |
| CAPEX, % of revenue | 8.0% | 8.6% | 10.1% | 11.8% | 17.8% | 6.1% |
| ROIC | 6.3% | 7.3% | 6.9% | 8.5% | 5.2% | -3.3% |
| ROE | 7.6% | 6.8% | 9.0% | 8.3% | 5.6% | -2.7% |
| Net Debt/EBITDA | 2.4x | 2.6x | 2.6x | 2.4x | 4.7x | 2.3x |
Revenue and profitability
New World China Land Ltd's Revenue dropped on 20.1% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 6.2 pp from 42.0% to 35.7% in FY2015.
Gross Margin decreased on 2.4 pp from 41.6% to 39.2% in FY2015. SG&A as a % of Revenue increased on 3.5 pp from 9.1% to 12.6% in FY2015.
Net Income marign decreased on 2.3 pp from 21.2% to 19.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
New World China Land Ltd's CAPEX/Revenue was 17.8% in FY2015. CAPEX/Revenue increased on 9.2 pp from 8.6% in FY2012 to 17.8% in FY2015. For the last three years the average CAPEX/Revenue was 13.2%.
Return on investment
The company operates at low ROIC (5.24%) and ROE (5.59%). ROIC decreased on 3.3 pp from 8.5% to 5.2% in FY2015. ROE decreased on 2.7 pp from 8.3% to 5.6% in FY2015.
Leverage (Debt)
Debt level is 4.7x Net Debt / EBITDA and 7.2x Debt / EBITDA. Net Debt / EBITDA jumped on 2.3x from 2.4x to 4.7x in FY2015. Debt surged on 14.6% in FY2015 while cash decreased on 9.1% in FY2015.
Appendix 1: Peers in Real Estate
Below we provide New World China Land 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) | 15.7% | 15.6% | 12.4% | 5.0% | 3.4% |
|---|
| New World China Land Ltd ($917) | | -7.6% | 28.9% | 35.3% | -20.1% |
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% | 62.7% |
| |
|---|
| Median (154 companies) | 43.7% | 41.9% | 40.0% | 38.9% | 50.7% |
|---|
| New World China Land Ltd ($917) | 31.4% | 45.0% | 41.8% | 41.6% | 39.2% |
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% | -525.1% |
| 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% | 26.4% | 27.8% |
|---|
| New World China Land Ltd ($917) | 31.9% | 47.3% | 41.4% | 42.0% | 35.7% |
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% | 189.7% |
| 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% | 1.5% |
|---|
| New World China Land Ltd ($917) | 8.0% | 8.6% | 10.1% | 11.8% | 17.8% |
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% | 3.9% | 3.8% | 3.8% | 2.2% |
|---|
| New World China Land Ltd ($917) | 6.3% | 7.3% | 6.9% | 8.5% | 5.2% |
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 | 0.5x |
|---|
| New World China Land Ltd ($917) | 2.4x | 2.6x | 2.6x | 2.4x | 4.7x |
