Liu Chong Hing Investment Ltd Net Income dropped on 82.6% in 2015 while Revenue jumped on 56.2%
02/03/2016 • About Liu Chong Hing Investment Ltd (
$194) • By InTwits
Liu Chong Hing Investment Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Liu Chong Hing Investment Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 60.9%. At the same time it's a lot of higher than industry average of 31.4%.
- CAPEX is quite volatile: 11.3 in 2015, 2,243 in 2014, 39.1 in 2013, 115 in 2012, 257 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Liu Chong Hing Investment Ltd ($194) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,735 | 619 | 643 | 832 | 1,299 | 56.2% |
| EBITDA | 1,731 | 431 | 457 | 522 | 550 | 5.3% |
| Net Income | 600 | 480 | 543 | 2,357 | 410 | -82.6% |
Balance Sheet
|
|---|
| Cash | 19,056 | 17,846 | 466 | 1,139 | 1,044 | -8.3% |
| Short Term Debt | 4,406 | 5,574 | 1,834 | 843 | 862 | 2.2% |
| Long Term Debt | 1,852 | 1,899 | 1,948 | 2,197 | 490 | -77.7% |
Cash flow
|
|---|
| Capex | 257 | 115 | 39 | 2,243 | 11 | -99.5% |
Ratios
|
|---|
| Revenue growth | 623.1% | -77.4% | 3.8% | 29.4% | 56.2% | |
| EBITDA growth | 302.5% | -75.1% | 6.0% | 14.2% | 5.3% | |
| EBITDA Margin | 63.3% | 69.6% | 71.1% | 62.8% | 42.3% | -20.4% |
| Net Income Margin | 22.0% | 77.5% | 84.5% | 283.4% | 31.6% | -251.8% |
| CAPEX, % of revenue | 9.4% | 18.5% | 6.1% | 269.7% | 0.9% | -268.8% |
| ROIC | 6.9% | 1.3% | 1.6% | 2.7% | 3.5% | 0.7% |
| ROE | 7.9% | 5.7% | 6.1% | 23.4% | 3.7% | -19.7% |
| Net Debt/EBITDA | -7.4x | -24.1x | 7.3x | 3.6x | 0.6x | -3.1x |
Revenue and profitability
The company's Revenue jumped on 56.2% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 20.4 pp from 62.8% to 42.3% in 2015.
Net Income marign dropped on 252 pp from 283% to 31.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
Liu Chong Hing Investment Ltd's CAPEX/Revenue was 0.87% in 2015. The company showed big decline in CAPEX/Revenue of 17.6 pp from 18.5% in 2012 to 0.87% in 2015. Average CAPEX/Revenue for the last three years was 92.2%.
Return on investment
The company operates at low ROIC (3.49%) and ROE (3.74%). ROIC increased slightly on 0.74 pp from 2.7% to 3.5% in 2015. ROE dropped on 19.7 pp from 23.4% to 3.7% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 2.5x. Net Debt / EBITDA dropped on 3.1x from 3.6x to 0.6x in 2015. Debt dropped on 55.5% in 2015 while cash decreased on 8.3% in 2015.
Appendix 1: Peers in Real Estate
Below we provide Liu Chong Hing Investment 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) | 15.2% | 15.6% | 13.1% | 5.0% | 2.4% |
|---|
| Liu Chong Hing Investment Ltd ($194) | | -77.4% | 3.8% | 29.4% | 56.2% |
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 (155 companies) | 43.6% | 41.9% | 40.5% | 39.1% | 48.6% |
|---|
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) | 35.2% | 28.9% | 27.9% | 26.4% | 34.5% |
|---|
| Liu Chong Hing Investment Ltd ($194) | 63.3% | 69.6% | 71.1% | 62.8% | 42.3% |
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% |
| Madex International Holdings Ltd ($231) | 586.8% | 174.5% | 519.7% | 205.3% | |
| |
|---|
| Median (173 companies) | 5.9% | 5.3% | 6.1% | 4.5% | 7.2% |
|---|
| Liu Chong Hing Investment Ltd ($194) | 9.4% | 18.5% | 6.1% | 269.7% | 0.9% |
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% | 4.0% | 3.9% | 3.8% | 2.4% |
|---|
| Liu Chong Hing Investment Ltd ($194) | 6.9% | 1.3% | 1.6% | 2.7% | 3.5% |
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 | 2.4x | 2.7x | 3.0x | 1.5x |
|---|
| Liu Chong Hing Investment Ltd ($194) | -7.4x | -24.1x | 7.3x | 3.6x | 0.6x |
