Hysan Development Co Ltd reports 40.8% Net Income decline and almost no change in EBITDA Margin of 81.7%
08/03/2016 • About Hysan Development Co Ltd (
$14) • By InTwits
Hysan Development Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hysan Development Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 38.2%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: 414 in 2015, 359 in 2014, 704 in 2013, 1,626 in 2012, 1,528 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hysan Development Co Ltd ($14) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,922 | 2,486 | 3,063 | 3,224 | 3,430 | 6.4% |
| Gross Profit | 1,660 | 2,063 | 2,658 | 2,820 | 3,016 | 7.0% |
| SG&A | 173 | 187 | 208 | 214 | 234 | 9.3% |
| EBITDA | 1,461 | 1,905 | 2,467 | 2,621 | 2,803 | 6.9% |
| Net Income | 8,545 | 9,955 | 6,158 | 4,902 | 2,903 | -40.8% |
Balance Sheet
|
|---|
| Cash | 654 | 963 | 621 | 576 | 584 | 1.4% |
| Short Term Debt | 1,507 | 699 | 1,055 | 1,589 | 250 | -84.3% |
| Long Term Debt | 5,156 | 5,242 | 6,449 | 4,858 | 4,609 | -5.1% |
Cash flow
|
|---|
| Capex | 1,528 | 1,626 | 704 | 359 | 414 | 15.3% |
Ratios
|
|---|
| Revenue growth | 9.0% | 29.3% | 23.2% | 5.3% | 6.4% | |
| EBITDA growth | 9.0% | 30.4% | 29.5% | 6.2% | 6.9% | |
| Gross Margin | 86.4% | 83.0% | 86.8% | 87.5% | 87.9% | 0.5% |
| EBITDA Margin | 76.0% | 76.6% | 80.5% | 81.3% | 81.7% | 0.4% |
| Net Income Margin | 444.6% | 400.4% | 201.0% | 152.0% | 84.6% | -67.4% |
| SG&A, % of revenue | 9.0% | 7.5% | 6.8% | 6.6% | 6.8% | 0.2% |
| CAPEX, % of revenue | 79.5% | 65.4% | 23.0% | 11.1% | 12.1% | 0.9% |
| ROIC | 2.8% | 3.0% | 3.5% | 3.4% | 3.6% | 0.2% |
| ROE | 19.1% | 18.6% | 10.1% | 7.5% | 4.3% | -3.2% |
| Net Debt/EBITDA | 4.1x | 2.6x | 2.8x | 2.2x | 1.5x | -0.7x |
Revenue and profitability
The company's Revenue increased on 6.4% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.6 pp from 8.0% to 16.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 67.4 pp from 152% to 84.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Hysan Development Co Ltd had CAPEX/Revenue of 12.1%. Hysan Development Co Ltd's CAPEX/Revenue dropped on 53.3 pp from 65.4% in 2012 to 12.1% in 2015. Average CAPEX/Revenue for the last three years was 15.4%.
Return on investment
The company operates at low ROIC (3.61%) and ROE (4.29%). ROIC showed almost no change in 2015. ROE decreased on 3.2 pp from 7.5% to 4.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.5x and Debt / EBITDA is 1.7x. Net Debt / EBITDA dropped on 0.7x from 2.2x to 1.5x in 2015. Debt dropped on 24.6% in 2015 while cash increased slightly on 1.4% in 2015.
Appendix 1: Peers in Real Estate
Below you can find Hysan Development Co Ltd benchmarking vs. other companies in Real Estate 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 |
|---|
| 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 (173 companies) | 15.0% | 15.4% | 13.0% | 5.0% | 3.6% |
|---|
| Hysan Development Co Ltd ($14) | | 29.3% | 23.2% | 5.3% | 6.4% |
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% | 48.5% |
|---|
| Hysan Development Co Ltd ($14) | 86.4% | 83.0% | 86.8% | 87.5% | 87.9% |
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 (173 companies) | 35.1% | 28.9% | 28.0% | 26.4% | 34.2% |
|---|
| Hysan Development Co Ltd ($14) | 76.0% | 76.6% | 80.5% | 81.3% | 81.7% |
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% | 0.9% |
| |
|---|
| Median (174 companies) | 5.8% | 5.4% | 6.1% | 4.6% | 7.2% |
|---|
| Hysan Development Co Ltd ($14) | 79.5% | 65.4% | 23.0% | 11.1% | 12.1% |
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% |
| Colour Life Services Group Co Ltd ($1778) | | 44.2% | 47.9% | 29.3% | 14.5% |
| 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% | |
| |
|---|
| Median (177 companies) | 4.6% | 4.1% | 3.9% | 3.9% | 2.4% |
|---|
| Hysan Development Co Ltd ($14) | 2.8% | 3.0% | 3.5% | 3.4% | 3.6% |
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 (140 companies) | 2.1x | 2.2x | 2.7x | 3.0x | 1.9x |
|---|
| Hysan Development Co Ltd ($14) | 4.1x | 2.6x | 2.8x | 2.2x | 1.5x |
