Fortune Real Estate Investment Trust reports 1,105% CAPEX growth and 13.7% Revenue growth
21/01/2016 • About Fortune Real Estate Investment Trust (
$778) • By InTwits
Fortune Real Estate Investment Trust reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Fortune Real Estate Investment Trust has high CAPEX intensity: 5 year average CAPEX/Revenue was 139.0%. At the same time it's a lot of higher than industry average of 60.8%.
- CAPEX is quite volatile: 1,881 in 2015, 156 in 2014, 5,735 in 2013, 2,010 in 2012, 44.2 in 2011
- The company has business model with low profitability: ROIC is at 8.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 5.2x while industry average is 6.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Fortune Real Estate Investment Trust ($778) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 912 | 1,114 | 1,432 | 1,656 | 1,882 | 13.7% |
| EBITDA | 3,621 | | | | | |
| Net Income | 3,363 | 2,238 | 3,649 | 3,931 | 2,486 | -36.8% |
Balance Sheet
|
|---|
| Cash | 732 | 578 | 858 | 688 | 710 | 3.2% |
| Short Term Debt | 420 | 940 | 970 | 940 | 3,780 | 302.1% |
| Long Term Debt | 2,794 | 3,879 | 8,860 | 8,881 | 7,229 | -18.6% |
Cash flow
|
|---|
| Capex | 44 | 2,010 | 5,735 | 156 | 1,881 | 1,104.6% |
Ratios
|
|---|
| Revenue growth | 9.0% | 22.1% | 28.6% | 15.6% | 13.7% | |
| EBITDA growth | 62.5% | | | | | |
| EBITDA Margin | 396.9% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Net Income Margin | 368.6% | 201.0% | 254.8% | 237.4% | 132.1% | -105.3% |
| CAPEX, % of revenue | 4.8% | 180.5% | 400.4% | 9.4% | 99.9% | 90.5% |
| ROIC | 24.2% | 13.6% | 16.0% | 14.0% | 8.6% | -5.4% |
| ROE | 28.5% | 15.9% | 21.4% | 19.0% | 10.7% | -8.3% |
| Net Debt/EBITDA | 0.7x | | | | | 0.0x |
Revenue and profitability
Fortune Real Estate Investment Trust's Revenue surged on 13.7% in 2015.
Net Income marign dropped on 105 pp from 237% to 132% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Fortune Real Estate Investment Trust had CAPEX/Revenue of 99.9%. CAPEX/Revenue dropped on 80.6 pp from 181% in 2012 to 99.9% in 2015. Average CAPEX/Revenue for the last three years was 170%.
Return on investment
The company operates at low ROIC (8.65%) and ROE (10.70%). ROIC decreased on 5.4 pp from 14.0% to 8.6% in 2015. ROE decreased on 8.3 pp from 19.0% to 10.7% in 2015.
Leverage (Debt)
Debt jumped on 12.1% in 2015 while cash increased on 3.2% in 2015.
Appendix 1: Peers in REITS
Below you can find Fortune Real Estate Investment Trust benchmarking vs. other companies in REITS 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 |
|---|
| Prosperity REIT ($808) | 3.1% | 10.8% | 10.8% | 18.0% | |
| Spring Real Estate Investment Trust ($1426) | 25.2% | 13.8% | 33.1% | 15.4% | |
| Yuexiu Real Estate Investment Trust ($405) | 7.8% | 36.4% | 92.5% | 14.6% | |
| Regal Real Estate Investment Trust ($1881) | -18.3% | 13.6% | 7.0% | 13.8% | |
| Link REIT/The ($823) | | 10.8% | 9.7% | 10.0% | 7.9% |
| |
|---|
| Median (8 companies) | 5.6% | 10.8% | 9.0% | 11.9% | 8.7% |
|---|
| Fortune Real Estate Investment Trust ($778) | | 22.1% | 28.6% | 15.6% | 13.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Link REIT/The ($823) | 304.6% | 179.0% | 340.1% | 257.8% | 362.0% |
| Sunlight Real Estate Investment Trust ($435) | 343.7% | 202.4% | 293.6% | 203.4% | 275.0% |
| New Century Real Estate Investment Trust ($1275) | 30.9% | 31.3% | 33.2% | 82.5% | |
| Regal Real Estate Investment Trust ($1881) | 437.8% | 447.8% | 73.8% | 56.7% | |
| Yuexiu Real Estate Investment Trust ($405) | 59.2% | 56.0% | 50.4% | 50.7% | |
| |
|---|
| Median (5 companies) | 304.6% | 179.0% | 62.1% | 82.5% | 318.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Regal Real Estate Investment Trust ($1881) | 11.5% | 8.3% | 19.8% | 322.0% | |
| Link REIT/The ($823) | 13.5% | 43.9% | 13.4% | 14.0% | 107.2% |
| Prosperity REIT ($808) | 4.6% | 4.3% | 4.5% | 6.4% | |
| New Century Real Estate Investment Trust ($1275) | 0.0% | 0.0% | 3.5% | 5.7% | |
| Sunlight Real Estate Investment Trust ($435) | 1.2% | 1.4% | 0.7% | 5.1% | 3.1% |
| |
|---|
| Median (8 companies) | 1.8% | 1.6% | 3.5% | 5.4% | 55.1% |
|---|
| Fortune Real Estate Investment Trust ($778) | 4.8% | 180.5% | 400.4% | 9.4% | 99.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Link REIT/The ($823) | 27.2% | 14.8% | 25.5% | 17.7% | 22.3% |
| Sunlight Real Estate Investment Trust ($435) | 15.7% | 9.2% | 13.3% | 9.2% | 12.6% |
| New Century Real Estate Investment Trust ($1275) | 7.9% | 6.5% | 3.0% | 4.4% | |
| Champion REIT ($2778) | 11.5% | 8.9% | 4.0% | 4.0% | |
| Spring Real Estate Investment Trust ($1426) | 3.6% | 3.4% | 3.7% | 3.8% | |
| |
|---|
| Median (9 companies) | 7.9% | 6.5% | 3.0% | 3.8% | 17.4% |
|---|
| Fortune Real Estate Investment Trust ($778) | 24.2% | 13.6% | 16.0% | 14.0% | 8.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Regal Real Estate Investment Trust ($1881) | 1.5x | 1.3x | 10.2x | 13.9x | |
| Yuexiu Real Estate Investment Trust ($405) | 4.7x | 19.0x | 10.4x | 8.9x | |
| New Century Real Estate Investment Trust ($1275) | 5.4x | 4.3x | 6.5x | 6.1x | |
| Sunlight Real Estate Investment Trust ($435) | 2.2x | 3.3x | 2.1x | 2.7x | 1.9x |
| Link REIT/The ($823) | 0.6x | 1.2x | 0.5x | 0.6x | 0.6x |
| |
|---|
| Median (5 companies) | 2.2x | 3.3x | 6.5x | 6.1x | 1.2x |
|---|
