Guangzhou R&F Properties Co Ltd revenue returned to growth in 2015: increased 40.9% vs. 1.2% decline a year earliner
11/03/2016 • About Guangzhou R&F Properties Co Ltd (
$2777) • By InTwits
Guangzhou R&F Properties Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Guangzhou R&F Properties Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 1,439 in 2015, 1,258 in 2014, 994 in 2013, 761 in 2012, 444 in 2011
- The company has business model with low profitability: ROIC is at 9.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guangzhou R&F Properties Co Ltd ($2777) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 27,370 | 26,389 | 31,799 | 31,430 | 44,291 | 40.9% |
| Gross Profit | 11,416 | 10,297 | 11,957 | 11,122 | 14,207 | 27.7% |
| SG&A | 1,924 | 1,972 | 2,455 | 3,104 | 3,306 | 6.5% |
| EBITDA | 10,329 | | | | 12,725 | |
| Net Income | 4,842 | 5,510 | 7,640 | 6,554 | 6,721 | 2.6% |
Balance Sheet
|
|---|
| Cash | 4,826 | 12,862 | 24,344 | 19,830 | 13,970 | -29.5% |
| Short Term Debt | 10,093 | 7,212 | 18,095 | 22,105 | 32,679 | 47.8% |
| Long Term Debt | 18,285 | 28,272 | 43,249 | 45,494 | 49,759 | 9.4% |
Cash flow
|
|---|
| Capex | 444 | 761 | 994 | 1,258 | 1,439 | 14.4% |
Ratios
|
|---|
| Revenue growth | 11.1% | -3.6% | 20.5% | -1.2% | 40.9% | |
| EBITDA growth | 11.8% | | | | | |
| Gross Margin | 41.7% | 39.0% | 37.6% | 35.4% | 32.1% | -3.3% |
| EBITDA Margin | 37.7% | 0.0% | 0.0% | 0.0% | 28.7% | 28.7% |
| Net Income Margin | 17.7% | 20.9% | 24.0% | 20.9% | 15.2% | -5.7% |
| SG&A, % of revenue | 7.0% | 7.5% | 7.7% | 9.9% | 7.5% | -2.4% |
| CAPEX, % of revenue | 1.6% | 2.9% | 3.1% | 4.0% | 3.2% | -0.8% |
| ROIC | 18.2% | 13.7% | 11.7% | 7.3% | 9.2% | 2.0% |
| ROE | 22.9% | 22.5% | 25.7% | 15.5% | 12.2% | -3.3% |
| Net Debt/EBITDA | 2.3x | | | | 5.4x | 5.4x |
Revenue and profitability
Guangzhou R&F Properties Co Ltd's Revenue surged on 40.9% in 2015.
Gross Margin decreased on 3.3 pp from 35.4% to 32.1% in 2015. SG&A as a % of Revenue decreased on 2.4 pp from 9.9% to 7.5% in 2015.
Net Income marign decreased on 5.7 pp from 20.9% to 15.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Guangzhou R&F Properties Co Ltd had CAPEX/Revenue of 3.2%. CAPEX/Revenue showed almost no change from 2012 to 2015. Average CAPEX/Revenue for the last three years was 3.5%.
Return on investment
The company operates at good ROE (12.17%) while ROIC is low (9.21%). ROIC increased slightly on 2.0 pp from 7.3% to 9.2% in 2015. ROE decreased on 3.3 pp from 15.5% to 12.2% in 2015.
Leverage (Debt)
Debt level is 5.4x Net Debt / EBITDA and 6.5x Debt / EBITDA. Net Debt / EBITDA jumped5.4x from to 5.4x in 2015. Debt surged on 22.0% in 2015 while cash dropped on 29.5% in 2015.
Management team
Zhang Li is a the company's CEO. Zhang Li has spent 13 years at the company. Zhu Ling is a Guangzhou R&F Properties Co Ltd's CFO. Zhu Ling has spent 13 years at the company.
Appendix 1: Peers in Real Estate
Below we provide Guangzhou R&F Properties Co 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 (173 companies) | 13.8% | 15.8% | 13.0% | 5.2% | 3.9% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | | -3.6% | 20.5% | -1.2% | 40.9% |
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) | 43.8% | 42.2% | 41.8% | 39.3% | 50.8% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | 41.7% | 39.0% | 37.6% | 35.4% | 32.1% |
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 (174 companies) | 35.1% | 28.9% | 28.1% | 26.9% | 34.6% |
|---|
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) | 5.9% | 5.5% | 6.2% | 4.7% | 7.7% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | 1.6% | 2.9% | 3.1% | 4.0% | 3.2% |
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% | 4.0% | 3.8% | 3.8% | 3.0% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | 18.2% | 13.7% | 11.7% | 7.3% | 9.2% |
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 (141 companies) | 2.1x | 2.3x | 2.7x | 3.0x | 2.0x |
|---|
