Shui On Land Ltd Net Debt / EBITDA jumped on 37.0x from 17.1x to 54.2x in 2015 while EBITDA dropped on 65.9%
16/03/2016 • About Shui On Land Ltd (
$272) • By InTwits
Shui On Land Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shui On Land Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.7%
- EBITDA Margin is declining: 12.7% in 2015 vs. 23.5% in 2014 vs. 35.7% in 2011
- Shui On Land Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 63.0%. At the same time it's a lot of higher than industry average of 8.8%.
- CAPEX is quite volatile: 2,962 in 2015, 4,470 in 2014, 4,636 in 2013, 4,081 in 2012, 7,951 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.7%
- It operates with high leverage: Net Debt/EBITDA is 54.2x while industry average is 22.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shui On Land Ltd ($272) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,484 | 4,821 | 9,828 | 10,249 | 6,472 | -36.9% |
| Gross Profit | 3,701 | 2,060 | 3,155 | 3,446 | 1,689 | -51.0% |
| SG&A | 829 | 945 | 1,266 | 1,234 | 1,126 | -8.8% |
| EBITDA | 3,033 | 1,394 | 2,456 | 2,413 | 824 | -65.9% |
| Net Income | 3,428 | 2,048 | 2,439 | 2,313 | 1,339 | -42.1% |
Balance Sheet
|
|---|
| Cash | 3,523 | 6,287 | 5,378 | 6,668 | 3,344 | -49.9% |
| Short Term Debt | 8,774 | 10,429 | 6,315 | 11,473 | 12,778 | 11.4% |
| Long Term Debt | 18,792 | 26,723 | 31,381 | 36,562 | 35,214 | -3.7% |
Cash flow
|
|---|
| Capex | 7,951 | 4,081 | 4,636 | 4,470 | 2,962 | -33.7% |
Ratios
|
|---|
| Revenue growth | 73.9% | -43.2% | 103.9% | 4.3% | -36.9% | |
| EBITDA growth | 109.2% | -54.0% | 76.2% | -1.8% | -65.9% | |
| Gross Margin | 43.6% | 42.7% | 32.1% | 33.6% | 26.1% | -7.5% |
| EBITDA Margin | 35.7% | 28.9% | 25.0% | 23.5% | 12.7% | -10.8% |
| Net Income Margin | 40.4% | 42.5% | 24.8% | 22.6% | 20.7% | -1.9% |
| SG&A, % of revenue | 9.8% | 19.6% | 12.9% | 12.0% | 17.4% | 5.4% |
| CAPEX, % of revenue | 93.7% | 84.7% | 47.2% | 43.6% | 45.8% | 2.2% |
| ROIC | 5.3% | 1.7% | 2.7% | 2.4% | 0.7% | -1.7% |
| ROE | 13.0% | 6.8% | 6.3% | 4.8% | 2.1% | -2.7% |
| Net Debt/EBITDA | 7.9x | 22.1x | 13.2x | 17.1x | 54.2x | 37.0x |
Revenue and profitability
The company's Revenue dropped on 36.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.8 pp from 23.5% to 12.7% in 2015.
Gross Margin decreased on 7.5 pp from 33.6% to 26.1% in 2015. SG&A as a % of Revenue increased on 5.4 pp from 12.0% to 17.4% in 2015.
Net Income marign decreased slightly on 1.9 pp from 22.6% to 20.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 45.8%. The company showed big decline in CAPEX/Revenue of 38.9 pp from 84.7% in 2012 to 45.8% in 2015. It's average CAPEX/Revenue for the last three years was 45.5%.Shui On Land Ltd has spent a lot to CAPEX (359% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (0.70%) and ROE (2.12%). ROIC decreased slightly on 1.7 pp from 2.4% to 0.70% in 2015. ROE decreased on 2.7 pp from 4.8% to 2.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 54.2x and Debt / EBITDA is 58.2x. Net Debt / EBITDA surged on 37.0x from 17.1x to 54.2x in 2015. Debt showed almost no change in 2015 while cash dropped on 49.9% in 2015.
Appendix 1: Peers in Real Estate
Below we provide Shui On Land 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) | 12.2% | 15.8% | 13.0% | 5.2% | 4.5% |
|---|
| Shui On Land Ltd ($272) | | -43.2% | 103.9% | 4.3% | -36.9% |
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% | 41.9% | 41.8% | 39.3% | 48.5% |
|---|
| Shui On Land Ltd ($272) | 43.6% | 42.7% | 32.1% | 33.6% | 26.1% |
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% | 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% | 29.1% | 28.2% | 27.3% | 34.2% |
|---|
| Shui On Land Ltd ($272) | 35.7% | 28.9% | 25.0% | 23.5% | 12.7% |
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% | 190.4% |
| 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% |
|---|
| Shui On Land Ltd ($272) | 93.7% | 84.7% | 47.2% | 43.6% | 45.8% |
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% |
|---|
| Shui On Land Ltd ($272) | 5.3% | 1.7% | 2.7% | 2.4% | 0.7% |
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 | 2.9x | 2.2x |
|---|
| Shui On Land Ltd ($272) | 7.9x | 22.1x | 13.2x | 17.1x | 54.2x |
