China Overseas Land & Investment Ltd Net Income jumped on 22.5% in 2015 and EBITDA Margin showed almost no change
18/03/2016 • About China Overseas Land & Investment Ltd (
$688) • By InTwits
China Overseas Land & Investment Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Overseas Land & Investment Ltd is a fast growth stock: 2015 revenue growth was 7.0%, 5 year revenue CAGR was 25.9% at 2015 ROIC 15.4%
- China Overseas Land & Investment Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's a lot of higher than industry average of 0.9%.
- CAPEX is quite volatile: 2,419 in 2015, 6,258 in 2014, 4,577 in 2013, 1,703 in 2012, 1,601 in 2011
- The company has highly profitable business model: ROIC is at 15.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Overseas Land & Investment Ltd ($688) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 51,332 | 64,581 | 82,469 | 130,957 | 140,131 | 7.0% |
| Gross Profit | 20,672 | 24,725 | 26,822 | 39,310 | 42,312 | 7.6% |
| SG&A | 1,897 | 2,037 | 2,817 | 3,990 | 4,213 | 5.6% |
| EBITDA | 22,248 | 26,758 | 27,785 | 43,067 | 46,170 | 7.2% |
| Net Income | 15,464 | 18,722 | 23,044 | 27,200 | 33,312 | 22.5% |
Balance Sheet
|
|---|
| Cash | 17,841 | 39,880 | 40,876 | 58,281 | 100,573 | 72.6% |
| Short Term Debt | 9,820 | 5,546 | 4,145 | 22,666 | 7,269 | -67.9% |
| Long Term Debt | 32,974 | 54,068 | 69,397 | 75,890 | 109,271 | 44.0% |
Cash flow
|
|---|
| Capex | 1,601 | 1,703 | 4,577 | 6,258 | 2,419 | -61.3% |
Ratios
|
|---|
| Revenue growth | 15.8% | 25.8% | 27.7% | 58.8% | 7.0% | |
| EBITDA growth | 11.2% | 20.3% | 3.8% | 55.0% | 7.2% | |
| Gross Margin | 40.3% | 38.3% | 32.5% | 30.0% | 30.2% | 0.2% |
| EBITDA Margin | 43.3% | 41.4% | 33.7% | 32.9% | 32.9% | 0.1% |
| Net Income Margin | 30.1% | 29.0% | 27.9% | 20.8% | 23.8% | 3.0% |
| SG&A, % of revenue | 3.7% | 3.2% | 3.4% | 3.0% | 3.0% | -0.0% |
| CAPEX, % of revenue | 3.1% | 2.6% | 5.5% | 4.8% | 1.7% | -3.1% |
| ROIC | 18.0% | 18.4% | 15.1% | 18.5% | 15.4% | -3.1% |
| ROE | 24.5% | 23.6% | 23.4% | 22.3% | 20.5% | -1.8% |
| Net Debt/EBITDA | 1.1x | 0.7x | 1.2x | 0.9x | 0.3x | -0.6x |
Revenue and profitability
The company's Revenue increased on 7.0% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 3.0 pp from 20.8% to 23.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.7%. The company showed small CAPEX/Revenue decline of 0.91 pp from 2.6% in 2012 to 1.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 4.0%.
Return on investment
The company operates at high and attractive ROE (20.49%) while ROIC is a bit lower (15.42%). ROIC decreased on 3.1 pp from 18.5% to 15.4% in 2015. ROE decreased slightly on 1.8 pp from 22.3% to 20.5% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 2.5x. Net Debt / EBITDA dropped on 0.6x from 0.9x to 0.3x in 2015. Debt surged on 18.2% in 2015 while cash surged on 72.6% in 2015.
Appendix 1: Peers in Real Estate
Below we provide China Overseas Land & Investment 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) | | 197.1% | -89.9% | 2,067.2% | -92.7% |
| Ceneric Holdings Ltd ($542) | -94.0% | -73.9% | -49.8% | 1,922.5% | |
| |
|---|
| Median (173 companies) | 11.5% | 15.4% | 13.0% | 5.0% | 4.3% |
|---|
| China Overseas Land & Investment Ltd ($688) | | 25.8% | 27.7% | 58.8% | 7.0% |
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% | 99.9% |
| 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% | 43.8% |
|---|
| China Overseas Land & Investment Ltd ($688) | 40.3% | 38.3% | 32.5% | 30.0% | 30.2% |
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% | 28.8% |
|---|
| China Overseas Land & Investment Ltd ($688) | 43.3% | 41.4% | 33.7% | 32.9% | 32.9% |
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) | 5.9% | 5.5% | 6.2% | 4.6% | 6.9% |
|---|
| China Overseas Land & Investment Ltd ($688) | 3.1% | 2.6% | 5.5% | 4.8% | 1.7% |
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% | |
| Hong Kong Ferry Holdings Co Ltd ($50) | 4.7% | 3.8% | 0.6% | 18.0% | 3.1% |
| |
|---|
| Median (177 companies) | 4.6% | 4.0% | 3.8% | 3.8% | 3.0% |
|---|
| China Overseas Land & Investment Ltd ($688) | 18.0% | 18.4% | 15.1% | 18.5% | 15.4% |
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 | 2.8x |
|---|
| China Overseas Land & Investment Ltd ($688) | 1.1x | 0.7x | 1.2x | 0.9x | 0.3x |
