NagaCorp Ltd is an attractive growth stock
08/02/2016 • About NagaCorp Ltd (
$3918) • By InTwits
NagaCorp Ltd is a growth stock in Lodging industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
NagaCorp Ltd showed fast growth in the last financial year. The company's revenue surged on 24.6% in FY2015. At the same time NagaCorp Ltd well managed its profitability and showed even faster growth in EBITDA of 32.1% for the same period.
In the last 3 years NagaCorp Ltd showed fast revenue growth of 21.8% from 2012 to 2015 annualy. EBITDA surged on 18.0% from 2012 to 2015 annualy.
NagaCorp Ltd ($3918) financials for the last 5 years
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 224 | 279 | 345 | 404 | 504 |
|---|
| Revenue growth, % | | 24.6% | 23.7% | 17.2% | 24.6% |
|---|
| Gross margin, % | 73.2% | 72.9% | 72.1% | 67.4% | 65.1% |
|---|
| SG&A, % | | | | | 9.37% |
|---|
| EBITDA | 110 | 139 | 173 | 173 | 228 |
|---|
| EBITDA growth, % | | 26.1% | 24.3% | 0.1% | 32.1% |
|---|
| EBITDA margin, % | 49.2% | 49.8% | 50.1% | 42.8% | 45.3% |
|---|
| Net Income | 92 | 113 | 140 | 136 | 173 |
|---|
| Net Income margin, % | 41.1% | 40.6% | 40.7% | 33.7% | 34.3% |
|---|
| |
| CAPEX | 45 | 72 | 59 | 97 | 140 |
|---|
| CAPEX/Revenue, % | 20.3% | 25.9% | 17.2% | 24.0% | 27.8% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 65 | 73 | 252 | 178 | 143 |
|---|
| Net Debt/EBITDA | -0.6x | -0.5x | -1.5x | -1.0x | -0.6x |
|---|
| |
| ROIC, % | 27.6% | 30.6% | 28.9% | 22.6% | 28.6% |
|---|
| ROE, % | 27.8% | 30.0% | 28.0% | 22.2% | 26.3% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. The company showed EBITDA margin growth of 2.50 pp from 42.8% to 45.3% in 2015. If we look for the longer period the company's EBITDA margin decreased on 4.50 pp from 49.8% in 2012 to 45.3% in 2015.
We call NagaCorp Ltd an attractive growth stock as together with the growth it delivers high ROIC at 28.6%. During the last three years it decreased - it was 30.6% in FY2012. It's average level of ROIC for the last three years was 26.7%.
NagaCorp Ltd showed small growth in Net Income margin of 0.600 pp from 33.7% to 34.3% in 2015. In the last 3 years the company's Net Income margin dropped on 6.30 pp from 40.6% in 2012 to 34.3% in 2015.
NagaCorp Ltd operates at ROE of 26.3%. For the last three years the average ROE was 25.5%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 27.8%. CAPEX/Revenue increased on 1.95 pp from 25.9% in 2012 to 27.8% in 2015. For the last three years the average CAPEX/Revenue was 23.0%.
Leverage (Debt)
The company has negative net debt at -0.6x Net Debt/EBITDA - at the same time with high growth. In the longer period NagaCorp Ltd showed fast leverage growth of 0.10x from -0.53x in 2012 to -0.63x in 2015.
Peers in Lodging
Below you can find NagaCorp Ltd benchmarking vs. other companies in Lodging 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% |
| 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% |
| Galaxy Entertainment Group Ltd ($27) | 113.8% | 37.8% | 16.4% | 8.7% | |
| |
|---|
| Median (21 companies) | 31.7% | 14.4% | 10.2% | 0.7% | -3.5% |
|---|
| NagaCorp Ltd ($3918) | | 24.6% | 23.7% | 17.2% | 24.6% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% |
| Sino Hotels Holdings Ltd ($1221) | 69.7% | 71.3% | 70.4% | 68.9% | 65.8% |
| |
|---|
| Median (15 companies) | 45.7% | 50.4% | 46.3% | 48.0% | 65.8% |
|---|
| NagaCorp Ltd ($3918) | 73.2% | 72.9% | 72.1% | 67.4% | 65.1% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% |
| Sino Hotels Holdings Ltd ($1221) | 42.8% | 46.5% | 45.9% | 43.1% | 39.6% |
| Far East Consortium International Ltd/HK ($35) | 50.1% | 57.2% | 34.5% | 43.0% | 36.4% |
| Macau Legend Development Ltd ($1680) | 56.6% | 48.6% | 39.8% | 41.8% | |
| |
|---|
| Median (21 companies) | 23.7% | 25.0% | 24.5% | 25.8% | 39.6% |
|---|
| NagaCorp Ltd ($3918) | 49.2% | 49.8% | 50.1% | 42.8% | 45.3% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| Far East Consortium International Ltd/HK ($35) | 24.5% | 46.8% | 27.9% | 23.5% | 7.9% |
| |
|---|
| Median (21 companies) | 6.3% | 6.3% | 8.9% | 10.8% | 7.9% |
|---|
| NagaCorp Ltd ($3918) | 20.3% | 25.9% | 17.2% | 24.0% | 27.8% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 5.2% | 7.6% | 5.7% | 3.9% | 3.9% |
|---|
| NagaCorp Ltd ($3918) | 27.6% | 30.6% | 28.9% | 22.6% | 28.6% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 0.6x | 0.5x | 0.6x | 0.7x | 4.0x |
|---|
| NagaCorp Ltd ($3918) | -0.6x | -0.5x | -1.5x | -1.0x | -0.6x |
