Great Eagle Holdings Ltd reports 180% CAPEX growth and 1.8% Revenue growth
01/03/2016 • About Great Eagle Holdings Ltd (
$41) • By InTwits
Great Eagle Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Great Eagle Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 32.5%. At the same time it's in pair with industry average of 5.8%.
- CAPEX is quite volatile: 3,109 in 2015, 1,110 in 2014, 6,356 in 2013, 1,328 in 2012, 222 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Great Eagle Holdings Ltd ($41) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,746 | 6,747 | 7,301 | 8,127 | 8,271 | 1.8% |
| Gross Profit | 1,564 | 3,078 | 3,251 | 3,488 | 3,461 | -0.8% |
| SG&A | 223 | 255 | 341 | 571 | 413 | -27.7% |
| EBITDA | 1,339 | 2,822 | 2,909 | 2,917 | 3,051 | 4.6% |
| Net Income | 4,227 | 3,552 | 2,399 | 2,115 | 3,312 | 56.6% |
Balance Sheet
|
|---|
| Cash | 2,439 | 4,962 | 10,712 | 5,628 | 5,164 | -8.2% |
| Short Term Debt | 2,585 | 6,381 | 7,042 | 3,231 | 9,968 | 208.6% |
| Long Term Debt | 809 | 10,372 | 19,347 | 24,682 | 17,192 | -30.3% |
Cash flow
|
|---|
| Capex | 222 | 1,328 | 6,356 | 1,110 | 3,109 | 180.1% |
Ratios
|
|---|
| Revenue growth | 1.1% | 42.1% | 8.2% | 11.3% | 1.8% | |
| EBITDA growth | -15.2% | 110.7% | 3.1% | 0.3% | 4.6% | |
| Gross Margin | 33.0% | 45.6% | 44.5% | 42.9% | 41.8% | -1.1% |
| EBITDA Margin | 28.2% | 41.8% | 39.8% | 35.9% | 36.9% | 1.0% |
| Net Income Margin | 89.1% | 52.6% | 32.9% | 26.0% | 40.0% | 14.0% |
| SG&A, % of revenue | 4.7% | 3.8% | 4.7% | 7.0% | 5.0% | -2.0% |
| CAPEX, % of revenue | 4.7% | 19.7% | 87.1% | 13.7% | 37.6% | 23.9% |
| ROIC | 2.8% | 4.2% | 2.9% | 2.5% | 2.4% | -0.1% |
| ROE | 13.4% | 9.3% | 5.2% | 4.2% | 6.2% | 2.1% |
| Net Debt/EBITDA | 0.7x | 4.2x | 5.4x | 7.6x | 7.2x | -0.4x |
Revenue and profitability
The company's Revenue increased slightly on 1.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.5 pp from 30.7% to 34.2% in 2015.
Gross Margin decreased slightly on 1.1 pp from 42.9% to 41.8% in 2015. SG&A as a % of Revenue decreased on 2.0 pp from 7.0% to 5.0% in 2015.
Net Income marign jumped on 14.0 pp from 26.0% to 40.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Great Eagle Holdings Ltd had CAPEX/Revenue of 37.6%. The company's CAPEX/Revenue surged on 17.9 pp from 19.7% in 2012 to 37.6% in 2015. It's average CAPEX/Revenue for the last three years was 46.1%.Great Eagle Holdings Ltd investments to CAPEX were large: 102% of EBITDA.
Return on investment
The company operates at low ROIC (2.44%) and ROE (6.24%). ROIC showed almost no change in 2015. ROE increased on 2.1 pp from 4.2% to 6.2% in 2015.
Leverage (Debt)
Debt level is 7.2x Net Debt / EBITDA and 8.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 7.6x to 7.2x in 2015. Debt decreased on 2.7% in 2015 while cash decreased on 8.2% in 2015.
Appendix 1: Peers in Real Estate
Below we provide Great Eagle Holdings 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) | 15.5% | 15.2% | 13.1% | 5.0% | 2.9% |
|---|
| Great Eagle Holdings Ltd ($41) | | 42.1% | 8.2% | 11.3% | 1.8% |
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) | 43.7% | 41.9% | 40.0% | 38.9% | 50.8% |
|---|
| Great Eagle Holdings Ltd ($41) | 33.0% | 45.6% | 44.5% | 42.9% | 41.8% |
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) | 35.4% | 28.9% | 27.9% | 26.4% | 34.3% |
|---|
| Great Eagle Holdings Ltd ($41) | 28.2% | 41.8% | 39.8% | 35.9% | 36.9% |
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% | 340.6% |
| 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% | 6.8% |
|---|
| Great Eagle Holdings Ltd ($41) | 4.7% | 19.7% | 87.1% | 13.7% | 37.6% |
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% | 3.9% | 3.9% | 3.8% | 2.3% |
|---|
| Great Eagle Holdings Ltd ($41) | 2.8% | 4.2% | 2.9% | 2.5% | 2.4% |
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 (139 companies) | 2.1x | 2.3x | 2.7x | 3.0x | 1.5x |
|---|
| Great Eagle Holdings Ltd ($41) | 0.7x | 4.2x | 5.4x | 7.6x | 7.2x |
