Harbour Centre Development Ltd EBITDA jumped on 63.8% in 2015 while Revenue dropped on 10.6%
02/03/2016 • About Harbour Centre Development Ltd (
$51) • By InTwits
Harbour Centre Development Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Harbour Centre Development Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 31.4%. At the same time it's a lot of higher than industry average of 18.9%.
- CAPEX is quite volatile: 1,044 in 2015, 1,182 in 2014, 5,187 in 2013, 489 in 2012, 229 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.7%
- It operates with high leverage: Net Debt/EBITDA is -1.1x while industry average is -29.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Harbour Centre Development Ltd ($51) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,297 | 6,261 | 5,758 | 5,646 | 5,048 | -10.6% |
| SG&A | | 295 | 247 | 206 | 228 | 10.7% |
| EBITDA | 436 | 2,271 | 1,248 | 939 | 1,538 | 63.8% |
| Net Income | 1,096 | 3,058 | 1,276 | 1,082 | 1,231 | 13.8% |
Balance Sheet
|
|---|
| Cash | 5,842 | 7,731 | 5,825 | 5,185 | 6,447 | 24.3% |
| Short Term Debt | 300 | 800 | 500 | 250 | 400 | 60.0% |
| Long Term Debt | 2,841 | 2,350 | 5,738 | 4,168 | 4,400 | 5.6% |
Cash flow
|
|---|
| Capex | 229 | 489 | 5,187 | 1,182 | 1,044 | -11.7% |
Ratios
|
|---|
| Revenue growth | 94.3% | 382.8% | -8.0% | -1.9% | -10.6% | |
| EBITDA growth | 234.9% | 421.2% | -45.0% | -24.8% | 63.8% | |
| EBITDA Margin | 33.6% | 36.3% | 21.7% | 16.6% | 30.5% | 13.8% |
| Net Income Margin | 84.5% | 48.8% | 22.2% | 19.2% | 24.4% | 5.2% |
| SG&A, % of revenue | | 4.7% | 4.3% | 3.6% | 4.5% | 0.9% |
| CAPEX, % of revenue | 17.7% | 7.8% | 90.1% | 20.9% | 20.7% | -0.3% |
| ROIC | 2.6% | 12.8% | 5.7% | 3.9% | 6.7% | 2.8% |
| ROE | 9.9% | 23.5% | 8.5% | 6.9% | 7.6% | 0.7% |
| Net Debt/EBITDA | -6.2x | -2.0x | 0.3x | -0.8x | -1.1x | -0.3x |
Revenue and profitability
The company's Revenue dropped on 10.6% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 13.8 pp from 16.6% to 30.5% in 2015.
SG&A as a % of Revenue increased slightly on 0.87 pp from 3.6% to 4.5% in 2015.
Net Income marign increased on 5.2 pp from 19.2% to 24.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Harbour Centre Development Ltd's CAPEX/Revenue was 20.7% in 2015. Harbour Centre Development Ltd showed fast CAPEX/Revenue growth of 12.9 pp from 7.8% in 2012 to 20.7% in 2015. Average CAPEX/Revenue for the last three years was 43.9%.Battling declining revenue Harbour Centre Development Ltd invested a large share of EBITDA (67.9%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (6.69%) and ROE (7.60%). ROIC increased on 2.8 pp from 3.9% to 6.7% in 2015. ROE increased slightly on 0.75 pp from 6.9% to 7.6% in 2015.
Leverage (Debt)
Debt level is -1.1x Net Debt / EBITDA and 3.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from -0.8x to -1.1x in 2015. Debt increased on 8.6% in 2015 while cash jumped on 24.3% in 2015.
Appendix 1: Peers in Lodging
Below you can find Harbour Centre Development 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| NagaCorp Ltd ($3918) | | 24.6% | 23.7% | 17.2% | 24.6% |
| 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% |
| |
|---|
| Median (21 companies) | 24.6% | 14.4% | 13.8% | 0.8% | -17.2% |
|---|
| Harbour Centre Development Ltd ($51) | | 382.8% | -8.0% | -1.9% | -10.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.7% | 99.5% |
| 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 (16 companies) | 49.1% | 53.1% | 51.1% | 49.6% | 65.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| NagaCorp Ltd ($3918) | 49.2% | 49.8% | 50.1% | 42.8% | 45.3% |
| |
|---|
| Median (21 companies) | 23.7% | 25.0% | 26.4% | 26.2% | 30.1% |
|---|
| Harbour Centre Development Ltd ($51) | 33.6% | 36.3% | 21.7% | 16.6% | 30.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| NagaCorp Ltd ($3918) | 20.3% | 25.9% | 17.2% | 24.0% | 27.8% |
| |
|---|
| Median (21 companies) | 6.3% | 6.3% | 8.9% | 10.8% | 12.3% |
|---|
| Harbour Centre Development Ltd ($51) | 17.7% | 7.8% | 90.1% | 20.9% | 20.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| MGM China Holdings Ltd ($2282) | 47.3% | 46.2% | 53.8% | 54.5% | 24.0% |
| 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% | 10.2% |
| Sands China Ltd ($1928) | 14.5% | 14.2% | 24.4% | 26.7% | 15.8% |
| SJM Holdings Ltd ($880) | 26.2% | 29.7% | 31.0% | 24.8% | 8.6% |
| |
|---|
| Median (21 companies) | 8.8% | 7.6% | 6.7% | 5.0% | 8.6% |
|---|
| Harbour Centre Development Ltd ($51) | 2.6% | 12.8% | 5.7% | 3.9% | 6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | 1.0x |
|---|
| Harbour Centre Development Ltd ($51) | -6.2x | -2.0x | 0.3x | -0.8x | -1.1x |
