Tai Sang Land Development Ltd reports 57.6% Net Income decline while 1.6 pp EBITDA Margin growth from 34.2% to 35.8%
18/03/2016 • About Tai Sang Land Development Ltd (
$89) • By InTwits
Tai Sang Land Development Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tai Sang Land Development Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.2%
- Tai Sang Land Development Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 53.9%. At the same time it's a lot of higher than industry average of 21.9%.
- CAPEX is quite volatile: 238 in 2015, 190 in 2014, 76.9 in 2013, 66.6 in 2012, 83.6 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tai Sang Land Development Ltd ($89) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 188.8 | 216.1 | 228.8 | 251.0 | 278.9 | 11.1% |
| Gross Profit | 125.0 | 154.2 | 155.8 | 172.3 | 196.3 | 13.9% |
| SG&A | | | | 94.2 | 104.5 | 10.9% |
| EBITDA | 44.7 | 71.6 | 64.8 | 85.8 | 99.8 | 16.4% |
| Net Income | 584.3 | 580.2 | 415.0 | 620.3 | 263.3 | -57.6% |
Balance Sheet
|
|---|
| Cash | 48.6 | 40.8 | 60.8 | 41.6 | 57.5 | 38.1% |
| Short Term Debt | 357.6 | 513.4 | 311.0 | 470.4 | 444.6 | -5.5% |
| Long Term Debt | 131.6 | 0.0 | 294.5 | 265.9 | 519.4 | 95.3% |
Cash flow
|
|---|
| Capex | 83.6 | 66.6 | 76.9 | 190.1 | 237.9 | 25.1% |
Ratios
|
|---|
| Revenue growth | 15.0% | 14.5% | 5.9% | 9.7% | 11.1% | |
| EBITDA growth | 6.7% | 60.1% | -9.5% | 32.4% | 16.4% | |
| Gross Margin | 66.2% | 71.4% | 68.1% | 68.7% | 70.4% | 1.7% |
| EBITDA Margin | 23.7% | 33.1% | 28.3% | 34.2% | 35.8% | 1.6% |
| Net Income Margin | 309.5% | 268.4% | 181.3% | 247.1% | 94.4% | -152.7% |
| SG&A, % of revenue | | | | 37.5% | 37.5% | -0.1% |
| CAPEX, % of revenue | 44.3% | 30.8% | 33.6% | 75.8% | 85.3% | 9.6% |
| ROIC | 0.7% | 1.1% | 0.9% | 1.1% | 1.2% | 0.1% |
| ROE | 15.2% | 13.2% | 8.6% | 11.7% | 4.4% | -7.3% |
| Net Debt/EBITDA | 9.9x | 6.6x | 8.4x | 8.1x | 9.1x | 1.0x |
Revenue and profitability
Tai Sang Land Development Ltd's Revenue jumped on 11.1% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.6 pp from 34.2% to 35.8% in 2015.
Gross Margin increased slightly on 1.7 pp from 68.7% to 70.4% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 153 pp from 247% to 94.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Tai Sang Land Development Ltd had CAPEX/Revenue of 85.3%. Tai Sang Land Development Ltd showed fast CAPEX/Revenue growth of 54.5 pp from 30.8% in 2012 to 85.3% in 2015. It's average CAPEX/Revenue for the last three years was 64.9%.To fuel this fast growth Tai Sang Land Development Ltd made large investments to CAPEX (238% of EBITDA).
Return on investment
The company operates at low ROIC (1.16%) and ROE (4.39%). ROIC showed almost no change in 2015. ROE decreased on 7.3 pp from 11.7% to 4.4% in 2015.
Leverage (Debt)
Debt level is 9.1x Net Debt / EBITDA and 9.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.0x from 8.1x to 9.1x in 2015. Debt jumped on 30.9% in 2015 while cash surged on 38.1% in 2015.
Appendix 1: Peers in Real Estate
Below we provide Tai Sang Land Development 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% | 15.8% | 13.1% | 5.0% | 4.3% |
|---|
| Tai Sang Land Development Ltd ($89) | | 14.5% | 5.9% | 9.7% | 11.1% |
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) | 43.6% | 41.9% | 40.5% | 39.1% | 43.3% |
|---|
| Tai Sang Land Development Ltd ($89) | 66.2% | 71.4% | 68.1% | 68.7% | 70.4% |
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% | 28.9% | 28.0% | 26.4% | 28.8% |
|---|
| Tai Sang Land Development Ltd ($89) | 23.7% | 33.1% | 28.3% | 34.2% | 35.8% |
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% |
|---|
| Tai Sang Land Development Ltd ($89) | 44.3% | 30.8% | 33.6% | 75.8% | 85.3% |
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% | 4.1% | 3.9% | 3.9% | 3.0% |
|---|
| Tai Sang Land Development Ltd ($89) | 0.7% | 1.1% | 0.9% | 1.1% | 1.2% |
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 |
|---|
| Tai Sang Land Development Ltd ($89) | 9.9x | 6.6x | 8.4x | 8.1x | 9.1x |
