Prosperity REIT reports 48.5% Net Income growth and 8.8% Revenue growth
03/03/2016 • About Prosperity REIT (
$808) • By InTwits
Prosperity REIT reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Prosperity REIT has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's a lot of higher than industry average of 25.6%.
- CAPEX is quite volatile: 13.3 in 2015, 25.8 in 2014, 15.4 in 2013, 13.3 in 2012, 12.9 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prosperity REIT ($808) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 278.4 | 308.5 | 341.9 | 403.4 | 438.7 | 8.8% |
| Net Income | 1,151.5 | 1,074.7 | 695.7 | 466.5 | 692.6 | 48.5% |
Balance Sheet
|
|---|
| Cash | 52.9 | 44.3 | 58.1 | 65.2 | 64.9 | -0.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 1,768.3 | 1,763.4 | 1,778.5 | 2,800.6 | 2,813.3 | 0.5% |
Cash flow
|
|---|
| Capex | 12.9 | 13.3 | 15.4 | 25.8 | 13.3 | -48.5% |
Ratios
|
|---|
| Revenue growth | 3.1% | 10.8% | 10.8% | 18.0% | 8.8% | |
| Net Income Margin | 413.6% | 348.4% | 203.5% | 115.6% | 157.9% | 42.2% |
| CAPEX, % of revenue | 4.6% | 4.3% | 4.5% | 6.4% | 3.0% | -3.4% |
| ROIC | 2.8% | 2.7% | 2.7% | 2.7% | 2.9% | 0.2% |
| ROE | 27.1% | 20.0% | 11.4% | 7.2% | 10.0% | 2.9% |
Revenue and profitability
Prosperity REIT's Revenue increased on 8.8% in 2015.
Net Income marign surged on 42.2 pp from 116% to 158% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.0% in 2015. The company's CAPEX/Revenue decreased slightly on 1.3 pp from 4.3% in 2012 to 3.0% in 2015. For the last three years the average CAPEX/Revenue was 4.6%.
Return on investment
The company operates at low ROIC (2.89%) and ROE (10.02%). ROIC showed almost no change in 2015. ROE increased on 2.9 pp from 7.2% to 10.0% in 2015.
Leverage (Debt)
Debt showed almost no change in 2015 while cash showed almost no change in 2015.
Management team
Prosperity REIT's CEO is Wong Lai Hung "Mavis". Wong Lai Hung "Mavis" has 7 years tenure at the company.
Appendix 1: Peers in REITS
Below we provide Prosperity REIT benchmarking against other companies in REITS 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 |
|---|
| 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% | |
| Link REIT/The ($823) | | 10.8% | 9.7% | 10.0% | 7.9% |
| |
|---|
| Median (8 companies) | 12.5% | 12.2% | 9.0% | 11.9% | 8.8% |
|---|
| Prosperity REIT ($808) | | 10.8% | 10.8% | 18.0% | 8.8% |
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% |
| New Century Real Estate Investment Trust ($1275) | 0.0% | 0.0% | 3.5% | 5.7% | |
| Sunlight Real Estate Investment Trust ($435) | 1.2% | 1.4% | 0.7% | 5.1% | 3.1% |
| |
|---|
| Median (8 companies) | 1.8% | 1.6% | 3.5% | 5.4% | 3.1% |
|---|
| Prosperity REIT ($808) | 4.6% | 4.3% | 4.5% | 6.4% | 3.0% |
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% | |
| Champion REIT ($2778) | 11.5% | 8.9% | 4.0% | 4.0% | 6.2% |
| |
|---|
| Median (9 companies) | 11.5% | 8.9% | 3.7% | 4.0% | 8.6% |
|---|
| Prosperity REIT ($808) | 2.8% | 2.7% | 2.7% | 2.7% | 2.9% |
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 |
|---|
