China Vanke Co Ltd demonstrated healthy growth over the last few years
20/03/2016 • About China Vanke Co Ltd (
$2202) • By InTwits
China Vanke Co Ltd is an attractive growth stock in Real Estate industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
China Vanke Co Ltd showed fast growth in the last financial year. The company's revenue surged on 28.7% in FY2015. Together with revenue growth China Vanke Co Ltd also managed to keep EBITDA growth. EBITDA grew 5.87% for the same period.
If we look for the longer period the company showed fast revenue growth of 22.4% from 2012 to 2015 annualy. EBITDA surged on 6.22% from 2012 to 2015 annualy.
China Vanke Co Ltd ($2202) financials for the last 5 years
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 67,709 | 96,860 | 123,874 | 137,994 | 177,569 |
|---|
| Revenue growth, % | | 43.1% | 27.9% | 11.4% | 28.7% |
|---|
| Gross margin, % | 36.1% | 32.4% | 25.1% | 25.1% | 22.2% |
|---|
| SG&A, % | 7.71% | 6.09% | 5.54% | 6.17% | 5.00% |
|---|
| EBITDA | 19,386 | 25,662 | 24,327 | 29,048 | 30,754 |
|---|
| EBITDA growth, % | | 32.4% | -5.2% | 19.4% | 5.9% |
|---|
| EBITDA margin, % | 28.6% | 26.5% | 19.6% | 21.1% | 17.3% |
|---|
| Net Income | 9,625 | 12,551 | 15,119 | 15,746 | 18,119 |
|---|
| Net Income margin, % | 14.2% | 13.0% | 12.2% | 11.4% | 10.2% |
|---|
| |
| CAPEX | 262 | 151 | 2,439 | 1,831 | 2,063 |
|---|
| CAPEX/Revenue, % | 0.386% | 0.156% | 1.97% | 1.33% | 1.16% |
|---|
| Debt | 50,393 | 71,593 | 91,490 | 68,981 | 96,236 |
|---|
| Cash | 33,614 | 51,120 | 43,004 | 61,653 | 51,748 |
|---|
| Net Debt/EBITDA | 0.9x | 0.8x | 2.0x | 0.3x | 1.4x |
|---|
| |
| ROIC, % | 16.8% | 17.8% | 13.5% | 14.6% | 14.1% |
|---|
| ROE, % | 19.8% | 21.5% | 21.5% | 19.1% | 19.2% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. If we look for the longer period the company showed big decline in EBITDA margin of 9.20 pp from 26.5% in 2012 to 17.3% in 2015.
We call China Vanke Co Ltd an attractive growth stock as together with the growth it delivers high ROIC at 14.1%. Three years ago it was a bit higher at 17.8%. It's average ROIC for the last three years was 14.1%.
China Vanke Co Ltd's Net Income margin dropped on 1.20 pp from 11.4% to 10.2% in 2015. In the longer period the company showed big decline in Net Income margin of 2.80 pp from 13% in 2012 to 10.2% in 2015.
China Vanke Co Ltd operates at ROE of 19.2%. Average ROE for the last three years was 19.9%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 1.16% in FY2015. CAPEX/Revenue surged on 1.01 pp from 0.156% in 2012 to 1.16% in 2015. Average CAPEX/Revenue for the last three years was 1.49%.
Leverage (Debt)
Having such a fast growth profile China Vanke Co Ltd keeps medium debt level at 1.4x Net Debt/EBITDA. If we look for the longer period leverage surged on 0.65x from 0.80x in 2012 to 1.45x in 2015.
Peers in Real Estate
Below we provide China Vanke 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 12.6% | 15.4% | 13.0% | 5.0% | 4.0% |
|---|
| China Vanke Co Ltd ($2202) | | 43.1% | 27.9% | 11.4% | 28.7% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | 42.2% | 41.8% | 39.3% | 48.6% |
|---|
| China Vanke Co Ltd ($2202) | 36.1% | 32.4% | 25.1% | 25.1% | 22.2% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| 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% | 34.5% |
|---|
| China Vanke Co Ltd ($2202) | 28.6% | 26.5% | 19.6% | 21.1% | 17.3% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| 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% | 4.7% | 7.2% |
|---|
| China Vanke Co Ltd ($2202) | 0.4% | 0.2% | 2.0% | 1.3% | 1.2% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | 3.8% | 3.8% | 3.0% |
|---|
| China Vanke Co Ltd ($2202) | 16.8% | 17.8% | 13.5% | 14.6% | 14.1% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 | 2.1x |
|---|
| China Vanke Co Ltd ($2202) | 0.9x | 0.8x | 2.0x | 0.3x | 1.4x |
