Road King Infrastructure Ltd Net Income dropped on 18.4% in 2015 and Revenue decreased slightly on 1.7%
18/03/2016 • About Road King Infrastructure Ltd (
$1098) • By InTwits
Road King Infrastructure Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 16.6% in 2015 vs. 19.9% in 2014 vs. 20.9% in 2011
- Road King Infrastructure Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's a lot of higher than industry average of 4.4%.
- CAPEX is quite volatile: 7.8 in 2015, 27.6 in 2014, 74.5 in 2013, 265 in 2012, 923 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Road King Infrastructure Ltd ($1098) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,833 | 9,344 | 11,456 | 12,730 | 12,510 | -1.7% |
| Gross Profit | 1,911 | 2,718 | 2,933 | 3,334 | 2,883 | -13.5% |
| SG&A | 246 | 342 | 405 | 379 | 886 | 133.7% |
| EBITDA | 1,425 | 2,080 | 2,336 | 2,539 | 2,083 | -18.0% |
| Net Income | 735 | 818 | 1,002 | 1,005 | 820 | -18.4% |
Balance Sheet
|
|---|
| Cash | 3,184 | 5,168 | 6,677 | 3,724 | 3,072 | -17.5% |
| Short Term Debt | 3,519 | 3,700 | 6,185 | 5,524 | 6,763 | 22.4% |
| Long Term Debt | 6,920 | 8,088 | 7,928 | 9,768 | 7,406 | -24.2% |
Cash flow
|
|---|
| Capex | 923 | 265 | 74 | 28 | 8 | -71.6% |
Ratios
|
|---|
| Revenue growth | 38.3% | 36.8% | 22.6% | 11.1% | -1.7% | |
| EBITDA growth | 25.1% | 45.9% | 12.3% | 8.7% | -18.0% | |
| Gross Margin | 28.0% | 29.1% | 25.6% | 26.2% | 23.0% | -3.1% |
| EBITDA Margin | 20.9% | 22.3% | 20.4% | 19.9% | 16.6% | -3.3% |
| Net Income Margin | 10.8% | 8.8% | 8.7% | 7.9% | 6.6% | -1.3% |
| SG&A, % of revenue | 3.6% | 3.7% | 3.5% | 3.0% | 7.1% | 4.1% |
| CAPEX, % of revenue | 13.5% | 2.8% | 0.7% | 0.2% | 0.1% | -0.2% |
| ROIC | 6.5% | 8.4% | 8.4% | 8.4% | 6.9% | -1.5% |
| ROE | 6.9% | 7.2% | 8.2% | 7.8% | 6.2% | -1.5% |
| Net Debt/EBITDA | 5.1x | 3.2x | 3.2x | 4.6x | 5.3x | 0.8x |
Revenue and profitability
The company's Revenue decreased slightly on 1.7% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.3 pp from 19.9% to 16.6% in 2015.
Gross Margin decreased on 3.1 pp from 26.2% to 23.0% in 2015. SG&A as a % of Revenue increased on 4.1 pp from 3.0% to 7.1% in 2015.
Net Income marign decreased slightly on 1.3 pp from 7.9% to 6.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.063%. CAPEX/Revenue decreased on 2.8 pp from 2.8% in 2012 to 0.063% in 2015. For the last three years the average CAPEX/Revenue was 0.31%.
Return on investment
The company operates at low ROIC (6.86%) and ROE (6.22%). ROIC decreased slightly on 1.5 pp from 8.4% to 6.9% in 2015. ROE decreased slightly on 1.5 pp from 7.8% to 6.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.3x and Debt / EBITDA is 6.8x. Net Debt / EBITDA surged on 0.8x from 4.6x to 5.3x in 2015. Debt decreased on 7.3% in 2015 while cash dropped on 17.5% in 2015.
Appendix 1: Peers in Real Estate
Below you can find Road King Infrastructure Ltd benchmarking vs. other companies in Real Estate industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
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% | 4.8% |
|---|
| Road King Infrastructure Ltd ($1098) | | 36.8% | 22.6% | 11.1% | -1.7% |
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% |
|---|
| Road King Infrastructure Ltd ($1098) | 28.0% | 29.1% | 25.6% | 26.2% | 23.0% |
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) | 35.3% | 29.1% | 28.2% | 27.3% | 29.1% |
|---|
| Road King Infrastructure Ltd ($1098) | 20.9% | 22.3% | 20.4% | 19.9% | 16.6% |
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% | 5.5% | 6.2% | 4.7% | 6.9% |
|---|
| Road King Infrastructure Ltd ($1098) | 13.5% | 2.8% | 0.7% | 0.2% | 0.1% |
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% | 15.4% |
| |
|---|
| Median (177 companies) | 4.6% | 4.0% | 3.8% | 3.8% | 3.0% |
|---|
| Road King Infrastructure Ltd ($1098) | 6.5% | 8.4% | 8.4% | 8.4% | 6.9% |
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 | 2.2x | 2.7x | 2.9x | 2.7x |
|---|
| Road King Infrastructure Ltd ($1098) | 5.1x | 3.2x | 3.2x | 4.6x | 5.3x |
