Capital Estate Ltd revenue dropped on 13.2% in 2015 while EBITDA Margin surged on 12.6 pp from -12.8% to -0.22%
23/10/2015 • About Capital Estate Ltd (
$193) • By InTwits
Capital Estate Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Capital Estate Ltd doesn't have a profitable business model yet: FY2015 ROIC is -3.2%
- The company operates at negative EBITDA Margin: -0.2%
- Capital Estate 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 -1.7%0
- Capital Estate Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.9%. At the same time it's in pair with industry average of 33.8%.
- CAPEX is quite volatile: 0.54 in FY2015, 2.8 in FY2014, 12.0 in FY2013, 29.2 in FY2012, 43.8 in FY2011
- The company has unprofitable business model: ROIC is at -3.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Capital Estate Ltd ($193) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 132.4 | 142.9 | 140.8 | 133.3 | 115.7 | -13.2% |
| Gross Profit | 59.8 | 59.6 | 54.4 | 46.8 | 44.2 | -5.6% |
| SG&A | | | 63.9 | 69.4 | 64.0 | -7.8% |
| EBITDA | 13.5 | -7.2 | -0.6 | -17.1 | -0.3 | -98.5% |
| Net Income | -17.2 | -120.3 | -161.9 | -55.5 | -52.6 | -5.3% |
Balance Sheet
|
|---|
| Cash | 49.8 | 26.0 | 115.5 | 42.6 | 201.7 | 372.9% |
| Short Term Debt | 19.4 | 25.5 | 121.2 | 12.0 | 0.0 | -100.0% |
| Long Term Debt | 138.8 | 115.3 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 43.8 | 29.2 | 12.0 | 2.8 | 0.5 | -80.5% |
Ratios
|
|---|
| Revenue growth | 22.1% | 7.9% | -1.5% | -5.3% | -13.2% | |
| EBITDA growth | 967.9% | -153.5% | -91.6% | 2,691.3% | -98.5% | |
| Gross Margin | 45.2% | 41.7% | 38.6% | 35.1% | 38.2% | 3.1% |
| EBITDA Margin | 10.2% | -5.1% | -0.4% | -12.8% | -0.2% | 12.6% |
| Net Income Margin | -13.0% | -84.2% | -115.0% | -41.7% | -45.4% | -3.8% |
| SG&A, % of revenue | | | 45.4% | 52.1% | 55.3% | 3.3% |
| CAPEX, % of revenue | 33.1% | 20.5% | 8.5% | 2.1% | 0.5% | -1.6% |
| ROIC | -2.1% | -3.8% | -3.0% | -5.1% | -3.2% | 1.9% |
| ROE | -1.8% | -12.2% | -18.5% | -7.0% | -6.1% | 0.8% |
| Net Debt/EBITDA | 8.0x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 13.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 12.6 pp from -12.8% to -0.22% in FY2015.
Gross Margin increased on 3.1 pp from 35.1% to 38.2% in FY2015. SG&A as a % of Revenue increased on 3.3 pp from 52.1% to 55.3% in FY2015.
Net Income marign decreased on 3.8 pp from -41.7% to -45.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.47% in FY2015. Capital Estate Ltd showed big decline in CAPEX/Revenue of 20.0 pp from 20.5% in FY2012 to 0.47% in FY2015. It's average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at negative ROIC (-3.20%) and ROE (-6.15%). ROIC increased slightly on 1.9 pp from -5.1% to -3.2% in FY2015. ROE increased slightly on 0.83 pp from -7.0% to -6.1% in FY2015.
Leverage (Debt)
The company paid down all the debt in FY2015. Cash surged on 373% in FY2015.
Appendix 1: Peers in Real Estate
Below we provide Capital Estate 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% | 15.6% | 13.1% | 5.1% | 2.3% |
|---|
| Capital Estate Ltd ($193) | | 7.9% | -1.5% | -5.3% | -13.2% |
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) | 43.4% | 42.1% | 41.1% | 39.2% | 53.0% |
|---|
| Capital Estate Ltd ($193) | 45.2% | 41.7% | 38.6% | 35.1% | 38.2% |
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% | 28.1% | 26.9% | 34.5% |
|---|
| Capital Estate Ltd ($193) | 10.2% | -5.1% | -0.4% | -12.8% | -0.2% |
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% | 4.7% | 4.8% |
|---|
| Capital Estate Ltd ($193) | 33.1% | 20.5% | 8.5% | 2.1% | 0.5% |
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% | 2.1% |
|---|
| Capital Estate Ltd ($193) | -2.1% | -3.8% | -3.0% | -5.1% | -3.2% |
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 (140 companies) | 2.1x | 2.4x | 2.8x | 3.0x | 1.4x |
|---|
