Champion REIT reports 71.4% Net Income growth and almost no change in Revenue of 2,289
25/02/2016 • About Champion REIT (
$2778) • By InTwits
Champion REIT reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Champion REIT has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.2%. At the same time it's in pair with industry average of 3.5%.
- CAPEX is quite volatile: 66.5 in 2015, 39.1 in 2014, 2,311 in 2013, 4.2 in 2012, 0 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Champion REIT ($2778) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,940 | 2,059 | 2,179 | 2,288 | 2,289 | 0.0% |
| Net Income | 6,493 | 4,160 | 2,199 | 1,929 | 3,305 | 71.4% |
Balance Sheet
|
|---|
| Cash | 1,293 | 1,397 | 1,066 | 1,005 | 693 | -31.1% |
| Short Term Debt | 0 | 5,504 | 6,993 | 0 | 2,197 | |
| Long Term Debt | 15,040 | 7,472 | 7,629 | 14,584 | 12,309 | -15.6% |
Cash flow
|
|---|
| Capex | 0 | 4 | 2,311 | 39 | 66 | 70.2% |
Ratios
|
|---|
| Revenue growth | 3.4% | 6.1% | 5.8% | 5.0% | 0.0% | |
| Net Income Margin | 334.6% | 202.0% | 100.9% | 84.3% | 144.4% | 60.1% |
| CAPEX, % of revenue | 0.0% | 0.2% | 106.1% | 1.7% | 2.9% | 1.2% |
| ROIC | 11.5% | 8.9% | 4.0% | 4.0% | 6.2% | 2.1% |
| ROE | 18.1% | 10.0% | 4.9% | 4.2% | 7.0% | 2.8% |
Revenue and profitability
Champion REIT's Revenue showed almost no change in 2015.
Net Income marign jumped on 60.1 pp from 84.3% to 144% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Champion REIT had CAPEX/Revenue of 2.9%. Champion REIT's CAPEX/Revenue increased on 2.7 pp from 0.21% in 2012 to 2.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 36.9%.
Return on investment
The company operates at low ROIC (6.15%) and ROE (6.98%). ROIC increased on 2.1 pp from 4.0% to 6.2% in 2015. ROE increased on 2.8 pp from 4.2% to 7.0% in 2015.
Leverage (Debt)
Debt decreased slightly on 0.53% in 2015 while cash dropped on 31.1% in 2015.
Appendix 1: Peers in REITS
Below you can find Champion REIT 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% | |
| Fortune Real Estate Investment Trust ($778) | | 22.1% | 28.6% | 15.6% | 13.7% |
| Spring Real Estate Investment Trust ($1426) | 25.2% | 13.8% | 33.1% | 15.4% | |
| Yuexiu Real Estate Investment Trust ($405) | | 36.4% | 92.5% | 14.6% | 8.8% |
| Regal Real Estate Investment Trust ($1881) | -18.3% | 13.6% | 7.0% | 13.8% | |
| |
|---|
| Median (8 companies) | 7.8% | 12.2% | 10.3% | 14.2% | 9.2% |
|---|
| Champion REIT ($2778) | | 6.1% | 5.8% | 5.0% | 0.0% |
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% | 46.9% |
| |
|---|
| Median (5 companies) | 324.2% | 179.0% | 62.1% | 82.5% | 275.0% |
|---|
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% |
| Fortune Real Estate Investment Trust ($778) | 4.8% | 180.5% | 400.4% | 9.4% | 99.9% |
| 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% | |
| |
|---|
| Median (8 companies) | 3.5% | 3.0% | 3.5% | 6.1% | 51.5% |
|---|
| Champion REIT ($2778) | 0.0% | 0.2% | 106.1% | 1.7% | 2.9% |
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% |
| Fortune Real Estate Investment Trust ($778) | 24.2% | 13.6% | 16.0% | 14.0% | 8.6% |
| 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% | |
| 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% | 10.6% |
|---|
| Champion REIT ($2778) | 11.5% | 8.9% | 4.0% | 4.0% | 6.2% |
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 | 12.8x |
| 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) | 1.8x | 3.3x | 6.5x | 6.1x | 1.9x |
|---|
