Renhe Commercial Holdings Co Ltd reports 74.8% CAPEX growth and 56.8% Revenue growth
17/03/2016 • About Renhe Commercial Holdings Co Ltd (
$1387) • By InTwits
Renhe Commercial Holdings Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Renhe Commercial Holdings Co Ltd doesn't have a profitable business model yet: 2015 ROIC is -17.8%
- The company operates at negative EBITDA Margin: -634.7%
- Renhe Commercial Holdings Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 110.4%. At the same time it's in pair with industry average of 4.4%.
- CAPEX is quite volatile: 898 in 2015, 514 in 2014, 395 in 2013, 417 in 2012, 5,016 in 2011
- The company has unprofitable business model: ROIC is at -17.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Renhe Commercial Holdings Co Ltd ($1387) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,245 | 688 | 547 | 555 | 871 | 56.8% |
| Gross Profit | 1,597 | 544 | 521 | 544 | 869 | 60.0% |
| SG&A | 398 | 450 | 1,004 | 409 | 702 | 71.4% |
| EBITDA | 7,916 | 2,132 | -1,450 | -1,416 | -5,526 | 290.3% |
| Net Income | 5,271 | 895 | -1,700 | -1,667 | -4,436 | 166.2% |
Balance Sheet
|
|---|
| Cash | 2,154 | 1,233 | 1,284 | 884 | 908 | 2.7% |
| Short Term Debt | 555 | 335 | 522 | 3,185 | 4,681 | 47.0% |
| Long Term Debt | 6,855 | 7,247 | 7,277 | 5,403 | 2,067 | -61.7% |
Cash flow
|
|---|
| Capex | 5,016 | 417 | 395 | 514 | 898 | 74.8% |
Ratios
|
|---|
| Revenue growth | 96.5% | -69.3% | -20.4% | 1.5% | 56.8% | |
| EBITDA growth | 87.7% | -73.1% | -168.0% | -2.4% | 290.3% | |
| Gross Margin | 71.1% | 79.0% | 95.2% | 97.9% | 99.9% | 2.0% |
| EBITDA Margin | 352.6% | 309.8% | -264.9% | -254.9% | -634.7% | -379.7% |
| Net Income Margin | 234.8% | 130.1% | -310.5% | -300.1% | -509.4% | -209.4% |
| SG&A, % of revenue | 17.7% | 65.4% | 183.4% | 73.7% | 80.6% | 6.9% |
| CAPEX, % of revenue | 223.4% | 60.6% | 72.2% | 92.5% | 103.1% | 10.6% |
| ROIC | 27.3% | 6.3% | -4.5% | -4.6% | -17.8% | -13.2% |
| ROE | 27.1% | 4.2% | -8.1% | -8.6% | -22.2% | -13.5% |
| Net Debt/EBITDA | 0.7x | 3.0x | | | | 0.0x |
Revenue and profitability
Renhe Commercial Holdings Co Ltd's Revenue surged on 56.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 7.6% to 9.8% in 2015.
Gross Margin increased slightly on 2.0 pp from 97.9% to 99.9% in 2015. SG&A as a % of Revenue increased on 6.9 pp from 73.7% to 80.6% in 2015.
Net Income marign dropped on 209 pp from -300% to -509% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 103%. The company showed fast CAPEX/Revenue growth of 42.5 pp from 60.6% in 2012 to 103% in 2015. It's average CAPEX/Revenue for the last three years was 89.3%.
Return on investment
The company operates at negative ROIC (-17.84%) and ROE (-22.17%). ROIC dropped on 13.2 pp from -4.6% to -17.8% in 2015. ROE dropped on 13.5 pp from -8.6% to -22.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.3x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt dropped on 21.4% in 2015 while cash increased on 2.7% in 2015.
Management team
Wang Hongfang is a Renhe Commercial Holdings Co Ltd's CEO. Wang Hongfang has spent 4 years at the company. The company's CFO is Hung Fan Kwan. Hung Fan Kwan has 10 years tenure at the company.
Appendix 1: Peers in Real Estate
Below we provide Renhe Commercial Holdings 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) | 12.2% | 15.8% | 13.1% | 5.2% | 4.2% |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | | -69.3% | -20.4% | 1.5% | 56.8% |
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% | |
| 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% |
| Allied Properties HK Ltd ($56) | 94.3% | 95.0% | 94.3% | 93.5% | |
| |
|---|
| Median (155 companies) | 43.6% | 41.9% | 40.5% | 39.1% | 46.5% |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 71.1% | 79.0% | 95.2% | 97.9% | 99.9% |
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% | 28.2% | 27.3% | 31.1% |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 352.6% | 309.8% | -264.9% | -254.9% | -634.7% |
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% | 6.8% |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 223.4% | 60.6% | 72.2% | 92.5% | 103.1% |
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% | 4.0% | 3.9% | 3.9% | 3.0% |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 27.3% | 6.3% | -4.5% | -4.6% | -17.8% |
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 | 2.2x | 2.7x | 3.0x | 2.6x |
|---|
