China Resources Land Ltd reports 31.7% CAPEX decline while 15.3% Revenue growth
21/03/2016 • About China Resources Land Ltd (
$1109) • By InTwits
China Resources Land Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Resources Land Ltd is a fast growth stock: 2015 revenue growth was 15.3%, 5 year revenue CAGR was 32.1% at 2015 ROIC 13.9%
- China Resources Land Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.2%. At the same time it's a lot of higher than industry average of 10.8%.
- CAPEX is quite volatile: 9,265 in 2015, 13,573 in 2014, 7,033 in 2013, 5,289 in 2012, 3,697 in 2011
- The company has highly profitable business model: ROIC is at 13.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Resources Land Ltd ($1109) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 35,795 | 44,364 | 71,389 | 89,705 | 103,393 | 15.3% |
| Gross Profit | 14,182 | 16,696 | 20,107 | 27,353 | 32,298 | 18.1% |
| SG&A | 3,681 | 3,711 | 3,927 | 5,324 | 6,312 | 18.6% |
| EBITDA | 15,271 | 17,879 | 24,112 | 27,922 | 32,511 | 16.4% |
| Net Income | 8,121 | 10,569 | 14,696 | 15,141 | 17,528 | 15.8% |
Balance Sheet
|
|---|
| Cash | 15,792 | 21,953 | 28,239 | 44,857 | 45,875 | 2.3% |
| Short Term Debt | 23,856 | 8,949 | 19,391 | 24,658 | 16,236 | -34.2% |
| Long Term Debt | 39,910 | 47,620 | 48,645 | 69,261 | 61,379 | -11.4% |
Cash flow
|
|---|
| Capex | 3,697 | 5,289 | 7,033 | 13,573 | 9,265 | -31.7% |
Ratios
|
|---|
| Revenue growth | 39.1% | 23.9% | 60.9% | 25.7% | 15.3% | |
| EBITDA growth | 29.3% | 17.1% | 34.9% | 15.8% | 16.4% | |
| Gross Margin | 39.6% | 37.6% | 28.2% | 30.5% | 31.2% | 0.7% |
| EBITDA Margin | 42.7% | 40.3% | 33.8% | 31.1% | 31.4% | 0.3% |
| Net Income Margin | 22.7% | 23.8% | 20.6% | 16.9% | 17.0% | 0.1% |
| SG&A, % of revenue | 10.3% | 8.4% | 5.5% | 5.9% | 6.1% | 0.2% |
| CAPEX, % of revenue | 10.3% | 11.9% | 9.9% | 15.1% | 9.0% | -6.2% |
| ROIC | 12.8% | 12.3% | 14.7% | 13.5% | 13.9% | 0.5% |
| ROE | 15.2% | 16.3% | 19.1% | 15.9% | 15.9% | -0.0% |
| Net Debt/EBITDA | 3.1x | 1.9x | 1.7x | 1.8x | 1.0x | -0.8x |
Revenue and profitability
China Resources Land Ltd's Revenue surged on 15.3% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.7 pp from -2.4% to 4.4% in 2015.
Gross Margin increased slightly on 0.75 pp from 30.5% to 31.2% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 9.0% in 2015. The company showed decline in CAPEX/Revenue of 3.0 pp from 11.9% in 2012 to 9.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 11.3%.
Return on investment
The company operates at good ROIC (13.94%) and ROE (15.89%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is 2.4x. Net Debt / EBITDA dropped on 0.8x from 1.8x to 1.0x in 2015. Debt dropped on 17.4% in 2015 while cash increased on 2.3% in 2015.
Appendix 1: Peers in Real Estate
Below we provide China Resources Land 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) | | -35.1% | -51.2% | 3,097.3% | 188.5% |
| 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 Resources Land Ltd ($1109) | | 23.9% | 60.9% | 25.7% | 15.3% |
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% | 43.3% |
|---|
| China Resources Land Ltd ($1109) | 39.6% | 37.6% | 28.2% | 30.5% | 31.2% |
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 Resources Land Ltd ($1109) | 42.7% | 40.3% | 33.8% | 31.1% | 31.4% |
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% | 6.2% |
|---|
| China Resources Land Ltd ($1109) | 10.3% | 11.9% | 9.9% | 15.1% | 9.0% |
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% |
|---|
| China Resources Land Ltd ($1109) | 12.8% | 12.3% | 14.7% | 13.5% | 13.9% |
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 | 38.4x |
| |
|---|
| Median (140 companies) | 2.1x | 2.4x | 2.8x | 3.0x | 2.8x |
|---|
| China Resources Land Ltd ($1109) | 3.1x | 1.9x | 1.7x | 1.8x | 1.0x |
