Magnificent Estates Net Income dropped on 84.1% in 2015 and EBITDA Margin dropped on 12.4 pp from 53.0% to 40.6%
11/03/2016 • About Magnificent Estates (
$201) • By InTwits
Magnificent Estates reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Magnificent Estates doesn't have a profitable business model yet: 2015 ROIC is 1.9%
- Magnificent Estates has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.7%. At the same time it's a lot of higher than industry average of 5.9%.
- CAPEX is quite volatile: 56.4 in 2015, 121 in 2014, 53.2 in 2013, 155 in 2012, 224 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Magnificent Estates ($201) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 401.6 | 520.5 | 688.7 | 538.6 | 444.5 | -17.5% |
| Gross Profit | 281.9 | 362.7 | 456.7 | 311.6 | 211.5 | -32.1% |
| SG&A | | | 24.4 | 27.1 | 26.3 | -3.1% |
| EBITDA | 168.9 | 236.8 | 329.4 | 285.4 | 180.5 | -36.7% |
| Net Income | 487.8 | 536.3 | 622.8 | 905.7 | 144.1 | -84.1% |
Balance Sheet
|
|---|
| Cash | 99.5 | 179.8 | 314.3 | 1,164.8 | 778.1 | -33.2% |
| Short Term Debt | 1,275.2 | 1,269.6 | 759.3 | 779.9 | 414.7 | -46.8% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 224.1 | 155.5 | 53.2 | 121.3 | 56.4 | -53.5% |
Ratios
|
|---|
| Revenue growth | 31.9% | 29.6% | 32.3% | -21.8% | -17.5% | |
| EBITDA growth | -11.7% | 40.2% | 39.1% | -13.4% | -36.7% | |
| Gross Margin | 70.2% | 69.7% | 66.3% | 57.9% | 47.6% | -10.3% |
| EBITDA Margin | 42.1% | 45.5% | 47.8% | 53.0% | 40.6% | -12.4% |
| Net Income Margin | 121.5% | 103.0% | 90.4% | 168.2% | 32.4% | -135.8% |
| SG&A, % of revenue | | | 3.5% | 5.0% | 5.9% | 0.9% |
| CAPEX, % of revenue | 55.8% | 29.9% | 7.7% | 22.5% | 12.7% | -9.8% |
| ROIC | 2.7% | 3.5% | 4.2% | 3.3% | 1.9% | -1.3% |
| ROE | 12.9% | 12.1% | 12.5% | 15.8% | 2.9% | -12.9% |
| Net Debt/EBITDA | 7.0x | 4.6x | 1.4x | -1.3x | -2.0x | -0.7x |
Revenue and profitability
The company's Revenue dropped on 17.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 14.9 pp from -20.7% to -5.8% in 2015.
Gross Margin dropped on 10.3 pp from 57.9% to 47.6% in 2015. SG&A as a % of Revenue increased slightly on 0.88 pp from 5.0% to 5.9% in 2015.
Net Income marign dropped on 136 pp from 168% to 32.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Magnificent Estates had CAPEX/Revenue of 12.7%. The company showed big decline in CAPEX/Revenue of 17.2 pp from 29.9% in 2012 to 12.7% in 2015. It's average CAPEX/Revenue for the last three years was 14.3%.
Return on investment
The company operates at low ROIC (1.93%) and ROE (2.89%). ROIC decreased slightly on 1.3 pp from 3.3% to 1.9% in 2015. ROE dropped on 12.9 pp from 15.8% to 2.9% in 2015.
Leverage (Debt)
Debt level is -2.0x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from -1.3x to -2.0x in 2015. Debt dropped on 46.8% in 2015 while cash dropped on 33.2% in 2015.
Appendix 1: Peers in Holding Companies-Divers
Below we provide Magnificent Estates benchmarking against other companies in Holding Companies-Divers 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 |
|---|
| Kong Sun Holdings Ltd ($295) | -18.7% | -88.3% | 5.1% | 7,067.0% | |
| Goldin Properties Holdings Ltd ($283) | | | 126.0% | 2,065.8% | -79.6% |
| China Primary Energy Holdings Ltd ($8117) | -43.1% | -56.3% | -23.6% | 195.4% | |
| Carnival Group International Holdings Ltd ($996) | | | | 159.1% | |
| 21 Holdings Ltd ($1003) | 20.3% | -57.4% | -12.4% | 106.4% | |
| |
|---|
| Median (42 companies) | 11.6% | 11.4% | 3.3% | 15.7% | 0.5% |
|---|
| Magnificent Estates ($201) | | 29.6% | 32.3% | -21.8% | -17.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Multifield International Holdings Ltd ($898) | 66.4% | 87.5% | 84.7% | 89.1% | |
| New Century Group Hong Kong Ltd ($234) | 76.7% | 27.3% | 85.2% | 82.8% | 91.5% |
| Emperor International Holdings Ltd ($163) | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% |
| China Renji Medical Group Ltd/Hong Kong ($648) | 54.9% | 70.0% | 67.3% | 78.6% | |
| Century Legend Holdings Ltd ($79) | 68.5% | 70.1% | 72.3% | 71.0% | |
| |
|---|
| Median (39 companies) | 27.9% | 32.9% | 34.6% | 30.8% | 38.3% |
|---|
| Magnificent Estates ($201) | 70.2% | 69.7% | 66.3% | 57.9% | 47.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Emperor International Holdings Ltd ($163) | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% |
| Multifield International Holdings Ltd ($898) | 49.8% | 80.1% | 68.3% | 97.5% | |
| New Century Group Hong Kong Ltd ($234) | 82.5% | -5.5% | 78.8% | 58.3% | 85.0% |
| China Merchants Holdings International Co Ltd ($144) | 63.7% | 56.4% | 50.8% | 45.2% | |
| Wisdom Holdings Group ($1661) | 25.0% | 32.4% | 45.1% | 44.4% | |
| |
|---|
| Median (44 companies) | 5.2% | 1.7% | 1.9% | 5.6% | 7.8% |
|---|
| Magnificent Estates ($201) | 42.1% | 45.5% | 47.8% | 53.0% | 40.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Far East Holdings International Ltd ($36) | 2.7% | 0.1% | 13.2% | 422.1% | |
| China Investments Holdings Ltd ($132) | 20.7% | 4.8% | 81.9% | 382.2% | |
| Heng Fai Enterprises Ltd ($185) | 217.5% | 4.8% | 77.1% | 310.0% | 458.1% |
| New Century Group Hong Kong Ltd ($234) | 1.0% | 97.2% | 1.0% | 142.7% | 32.2% |
| Chinney Investments Ltd ($216) | 37.6% | 17.5% | 103.4% | 111.3% | 230.9% |
| |
|---|
| Median (44 companies) | 4.1% | 2.2% | 3.6% | 6.1% | 15.6% |
|---|
| Magnificent Estates ($201) | 55.8% | 29.9% | 7.7% | 22.5% | 12.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wisdom Holdings Group ($1661) | 62.7% | 68.6% | 42.1% | 28.8% | |
| Chinney Alliance Group Ltd ($385) | 3.4% | 6.4% | 8.1% | 13.6% | |
| Hutchison Whampoa Ltd ($13) | 3.3% | 3.7% | 4.2% | 8.1% | |
| Code Agriculture Holdings Ltd ($8153) | -0.1% | 2.4% | -3.3% | 7.9% | -6.2% |
| C C Land Holdings Ltd ($1224) | 4.5% | 7.4% | 5.3% | 7.9% | |
| |
|---|
| Median (44 companies) | 0.3% | -0.2% | -0.2% | 0.5% | 0.3% |
|---|
| Magnificent Estates ($201) | 2.7% | 3.5% | 4.2% | 3.3% | 1.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinney Investments Ltd ($216) | 111.3x | 10.3x | 63.7x | 48.6x | 93.7x |
| Carnival Group International Holdings Ltd ($996) | | | | 23.7x | |
| Van Shung Chong Holdings Ltd ($1001) | 3.4x | | 0.9x | 12.3x | 7.7x |
| Southeast Asia Properties & Finance Ltd ($252) | 6.8x | 6.7x | 5.7x | 9.2x | 4.3x |
| Code Agriculture Holdings Ltd ($8153) | 24.3x | 11.9x | 42.8x | 8.7x | |
| |
|---|
| Median (26 companies) | 2.7x | 2.4x | 3.1x | 3.2x | 5.1x |
|---|
| Magnificent Estates ($201) | 7.0x | 4.6x | 1.4x | -1.3x | -2.0x |
