Pokfulam Development Co reports 80.9 pp EBITDA Margin growth from -7.3% to 73.6% in 2015 while 2.7% Revenue decline
11/11/2015 • About Pokfulam Development Co (
$225) • By InTwits
Pokfulam Development Co reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 73.6% in FY2015, -7.3% in FY2014, -5.3% in FY2013, 5.2% in FY2012, 56.9% in FY2011
- Pokfulam Development Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.7%. At the same time it's a lot of higher than industry average of 37.9%.
- CAPEX is quite volatile: 16.7 in FY2015, 30.7 in FY2014, 34.6 in FY2013, 7.5 in FY2012, 1.6 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pokfulam Development Co ($225) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 120.8 | 133.5 | 131.0 | 136.2 | 132.5 | -2.7% |
| Gross Profit | 73.8 | 86.1 | 82.4 | 86.7 | 83.2 | -4.0% |
| SG&A | | 12.2 | 13.6 | 13.8 | 13.0 | -5.9% |
| EBITDA | 68.8 | 6.9 | -7.0 | -9.9 | 97.5 | -1,082.4% |
| Net Income | 471.4 | 459.5 | 223.5 | 178.0 | 172.4 | -3.1% |
Balance Sheet
|
|---|
| Cash | 23.1 | 72.6 | 118.9 | 151.5 | 173.5 | 14.5% |
| Short Term Debt | 42.0 | 42.0 | 70.0 | 85.0 | 70.0 | -17.6% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 1.6 | 7.5 | 34.6 | 30.7 | 16.7 | -45.7% |
Ratios
|
|---|
| Revenue growth | 2.1% | 10.5% | -1.9% | 4.0% | -2.7% | |
| EBITDA growth | 0.9% | -89.9% | -200.8% | 41.7% | -1,082.4% | |
| Gross Margin | 61.1% | 64.5% | 62.9% | 63.6% | 62.8% | -0.8% |
| EBITDA Margin | 56.9% | 5.2% | -5.3% | -7.3% | 73.6% | 80.9% |
| Net Income Margin | 390.2% | 344.1% | 170.6% | 130.7% | 130.2% | -0.5% |
| SG&A, % of revenue | | 9.1% | 10.4% | 10.1% | 9.8% | -0.3% |
| CAPEX, % of revenue | 1.4% | 5.6% | 26.4% | 22.5% | 12.6% | -9.9% |
| ROIC | 2.1% | 0.1% | -0.2% | -0.3% | 2.2% | 2.4% |
| ROE | 17.0% | 13.3% | 5.6% | 4.3% | 4.0% | -0.3% |
| Net Debt/EBITDA | 0.3x | -4.4x | | | -1.1x | -1.1x |
Revenue and profitability
Pokfulam Development Co's Revenue decreased on 2.7% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 80.9 pp from -7.3% to 73.6% in FY2015.
Gross Margin decreased slightly on 0.84 pp from 63.6% to 62.8% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign decreased slightly on 0.51 pp from 131% to 130% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 12.6% in FY2015. CAPEX/Revenue increased on 7.0 pp from 5.6% in FY2012 to 12.6% in FY2015. Average CAPEX/Revenue for the last three years was 20.5%.
Return on investment
The company operates at low ROIC (2.17%) and ROE (3.99%). ROIC increased on 2.4 pp from -0.26% to 2.2% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Debt level is -1.1x Net Debt / EBITDA and 0.7x Debt / EBITDA. Net Debt / EBITDA dropped1.1x from to -1.1x in FY2015. Debt dropped on 17.6% in FY2015 while cash surged on 14.5% in FY2015.
Appendix 1: Peers in Real Estate
Below you can find Pokfulam Development Co 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) | 15.2% | 15.6% | 13.1% | 5.1% | 1.7% |
|---|
| Pokfulam Development Co ($225) | | 10.5% | -1.9% | 4.0% | -2.7% |
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% | 41.9% | 40.0% | 38.9% | 50.7% |
|---|
| Pokfulam Development Co ($225) | 61.1% | 64.5% | 62.9% | 63.6% | 62.8% |
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) | 35.2% | 28.9% | 28.1% | 26.9% | 31.6% |
|---|
| Pokfulam Development Co ($225) | 56.9% | 5.2% | -5.3% | -7.3% | 73.6% |
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% | 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) | 6.0% | 5.3% | 6.1% | 4.5% | 3.0% |
|---|
| Pokfulam Development Co ($225) | 1.4% | 5.6% | 26.4% | 22.5% | 12.6% |
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% | 1.9% |
|---|
| Pokfulam Development Co ($225) | 2.1% | 0.1% | -0.2% | -0.3% | 2.2% |
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 |
|---|
