China Oceanwide Holdings Ltd reports 45,712% CAPEX growth and 2.4% Revenue growth
15/03/2016 • About China Oceanwide Holdings Ltd (
$715) • By InTwits
China Oceanwide Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Oceanwide Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.9%
- EBITDA Margin is quite volatile: 69.2% in 2015, 48.4% in 2014, 110.5% in 2013, 137.5% in 2012, 54.1% in 2011
- China Oceanwide Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 176.8%. At the same time it's in pair with industry average of 192.9%.
- CAPEX is quite volatile: 851 in 2015, 1.9 in 2014, 0.28 in 2013, 0.73 in 2012, 0.36 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Oceanwide Holdings Ltd ($715) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 86.366 | 87.819 | 88.433 | 94.414 | 96.659 | 2.4% |
| Gross Profit | 71.518 | 72.383 | 71.789 | 77.459 | 78.213 | 1.0% |
| SG&A | 26.048 | 24.509 | 26.454 | 32.427 | 94.814 | 192.4% |
| EBITDA | 46.695 | 120.752 | 97.725 | 45.662 | 66.895 | 46.5% |
| Net Income | 91.002 | 182.160 | 174.746 | 85.808 | 122.510 | 42.8% |
Balance Sheet
|
|---|
| Cash | 4,259.131 | 4,013.602 | 3,599.159 | 2,678.726 | 1,079.408 | -59.7% |
| Short Term Debt | 40.295 | 0.000 | 0.000 | 137.970 | 1,317.670 | 855.0% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 240.281 | |
Cash flow
|
|---|
| Capex | 0.355 | 0.727 | 0.279 | 1.858 | 851.189 | 45,712.1% |
Ratios
|
|---|
| Revenue growth | 5.1% | 1.7% | 0.7% | 6.8% | 2.4% | |
| EBITDA growth | -26.0% | 158.6% | -19.1% | -53.3% | 46.5% | |
| Gross Margin | 82.8% | 82.4% | 81.2% | 82.0% | 80.9% | -1.1% |
| EBITDA Margin | 54.1% | 137.5% | 110.5% | 48.4% | 69.2% | 20.8% |
| Net Income Margin | 105.4% | 207.4% | 197.6% | 90.9% | 126.7% | 35.9% |
| SG&A, % of revenue | 30.2% | 27.9% | 29.9% | 34.3% | 98.1% | 63.7% |
| CAPEX, % of revenue | 0.4% | 0.8% | 0.3% | 2.0% | 880.6% | 878.6% |
| ROIC | 0.7% | 1.8% | 1.5% | 0.7% | 0.9% | 0.2% |
| ROE | 1.5% | 3.0% | 2.9% | 1.4% | 2.0% | 0.6% |
| Net Debt/EBITDA | -90.3x | -33.2x | -36.8x | -55.6x | 7.2x | 62.8x |
Revenue and profitability
China Oceanwide Holdings Ltd's Revenue increased on 2.4% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 20.8 pp from 48.4% to 69.2% in 2015.
Gross Margin decreased slightly on 1.1 pp from 82.0% to 80.9% in 2015. SG&A as a % of Revenue surged on 63.7 pp from 34.3% to 98.1% in 2015.
Net Income marign surged on 35.9 pp from 90.9% to 127% in 2015.
Capital expenditures (CAPEX) and working capital investments
China Oceanwide Holdings Ltd's CAPEX/Revenue was 881% in 2015. China Oceanwide Holdings Ltd's CAPEX/Revenue surged on 880 pp from 0.83% in 2012 to 881% in 2015. For the last three years the average CAPEX/Revenue was 294%.China Oceanwide Holdings Ltd maintained rich investment policy and has spent a lot to CAPEX (1,272% of EBITDA).
Return on investment
The company operates at low ROIC (0.88%) and ROE (2.02%). ROIC showed almost no change in 2015. ROE increased slightly on 0.60 pp from 1.4% to 2.0% in 2015.
Leverage (Debt)
Debt level is 7.2x Net Debt / EBITDA and 23.3x Debt / EBITDA. Net Debt / EBITDA surged on 62.8x from -55.6x to 7.2x in 2015. Debt surged on 1,029% in 2015 while cash dropped on 59.7% in 2015.
Appendix 1: Peers in Real Estate
Below we provide China Oceanwide Holdings 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) | 12.6% | 15.8% | 13.1% | 5.0% | 4.2% |
|---|
| China Oceanwide Holdings Ltd ($715) | | 1.7% | 0.7% | 6.8% | 2.4% |
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% |
|---|
| China Oceanwide Holdings Ltd ($715) | 82.8% | 82.4% | 81.2% | 82.0% | 80.9% |
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% | 397.4% |
| 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% |
|---|
| China Oceanwide Holdings Ltd ($715) | 54.1% | 137.5% | 110.5% | 48.4% | 69.2% |
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% | 6.8% |
|---|
| China Oceanwide Holdings Ltd ($715) | 0.4% | 0.8% | 0.3% | 2.0% | 880.6% |
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% | 3.0% |
|---|
| China Oceanwide Holdings Ltd ($715) | 0.7% | 1.8% | 1.5% | 0.7% | 0.9% |
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 | 2.4x | 2.8x | 3.0x | 2.0x |
|---|
| China Oceanwide Holdings Ltd ($715) | -90.3x | -33.2x | -36.8x | -55.6x | 7.2x |
