Regal Hotels International Holdings Ltd CAPEX dropped on 78.6% in 2015 while Revenue increased on 7.5%
22/03/2016 • About Regal Hotels International Holdings Ltd (
$78) • By InTwits
Regal Hotels International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Regal Hotels International Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.4%
- EBITDA Margin is quite volatile: 34.7% in 2015, 35.7% in 2014, 27.0% in 2013, 41.0% in 2012, -4.7% in 2011
- Regal Hotels International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.4%. At the same time it's in pair with industry average of 20.5%.
- CAPEX is quite volatile: 297 in 2015, 1,388 in 2014, 256 in 2013, 174 in 2012, 99.8 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.4%
- It operates with high leverage: Net Debt/EBITDA is 11.1x while industry average is -22.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Regal Hotels International Holdings Ltd ($78) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,037 | 2,331 | 3,570 | 2,299 | 2,472 | 7.5% |
| Gross Profit | 868 | 1,174 | 1,182 | 1,099 | 1,122 | 2.1% |
| SG&A | | | | 250 | 254 | 1.6% |
| EBITDA | -95 | 956 | 963 | 821 | 858 | 4.6% |
| Net Income | 108 | 536 | 257 | 410 | 119 | -71.0% |
Balance Sheet
|
|---|
| Cash | 855 | 2,365 | 1,303 | 1,443 | 1,181 | -18.2% |
| Short Term Debt | 4,731 | 82 | 334 | 511 | 280 | -45.2% |
| Long Term Debt | 627 | 7,070 | 9,395 | 10,596 | 10,429 | -1.6% |
Cash flow
|
|---|
| Capex | 100 | 174 | 256 | 1,388 | 297 | -78.6% |
Ratios
|
|---|
| Revenue growth | 35.6% | 14.4% | 53.2% | -35.6% | 7.5% | |
| EBITDA growth | -114.8% | -1,103.7% | 0.8% | -14.8% | 4.6% | |
| Gross Margin | 42.6% | 50.4% | 33.1% | 47.8% | 45.4% | -2.4% |
| EBITDA Margin | -4.7% | 41.0% | 27.0% | 35.7% | 34.7% | -1.0% |
| Net Income Margin | 5.3% | 23.0% | 7.2% | 17.8% | 4.8% | -13.0% |
| SG&A, % of revenue | | | | 10.9% | 10.3% | -0.6% |
| CAPEX, % of revenue | 4.9% | 7.4% | 7.2% | 60.4% | 12.0% | -48.4% |
| ROIC | -2.4% | 2.8% | 2.5% | 1.5% | 1.4% | -0.1% |
| ROE | 0.9% | 4.6% | 2.2% | 3.5% | 1.0% | -2.5% |
| Net Debt/EBITDA | | 5.0x | 8.7x | 11.8x | 11.1x | -0.7x |
Revenue and profitability
The company's Revenue increased on 7.5% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.99 pp from 35.7% to 34.7% in 2015.
Gross Margin decreased on 2.4 pp from 47.8% to 45.4% in 2015. SG&A as a % of Revenue decreased slightly on 0.60 pp from 10.9% to 10.3% in 2015.
Net Income marign dropped on 13.0 pp from 17.8% to 4.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
Regal Hotels International Holdings Ltd's CAPEX/Revenue was 12.0% in 2015. Regal Hotels International Holdings Ltd's CAPEX/Revenue increased on 4.6 pp from 7.4% in 2012 to 12.0% in 2015. It's average CAPEX/Revenue for the last three years was 26.5%.
Return on investment
The company operates at low ROIC (1.39%) and ROE (1.00%). ROIC showed almost no change in 2015. ROE decreased on 2.5 pp from 3.5% to 1.00% in 2015.
Leverage (Debt)
Debt level is 11.1x Net Debt / EBITDA and 12.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 11.8x to 11.1x in 2015. Debt decreased on 3.6% in 2015 while cash dropped on 18.2% in 2015.
Appendix 1: Peers in Lodging
Below you can find Regal Hotels International Holdings Ltd benchmarking vs. other companies in Lodging 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 |
|---|
| Zhuhai Holdings Investment Group Ltd ($908) | 13.4% | 229.8% | 14.5% | 57.0% | |
| Carrianna Group Holdings Co Ltd ($126) | | 69.3% | -36.2% | 35.4% | -33.8% |
| NagaCorp Ltd ($3918) | | 24.6% | 23.7% | 17.2% | 24.6% |
| Emperor Entertainment Hotel Ltd ($296) | | 35.9% | 13.8% | 11.7% | -10.2% |
| Far East Consortium International Ltd/HK ($35) | | 6.4% | 111.9% | 9.0% | 25.7% |
| |
|---|
| Median (23 companies) | 22.1% | 11.5% | 10.2% | 0.8% | -10.2% |
|---|
| Regal Hotels International Holdings Ltd ($78) | | 14.4% | 53.2% | -35.6% | 7.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.7% | 99.5% |
| Wynn Macau Ltd ($1128) | 97.6% | 97.9% | 98.3% | 98.5% | |
| Emperor Entertainment Hotel Ltd ($296) | 70.9% | 77.1% | 75.6% | 76.8% | 70.9% |
| Asia Standard Hotel Group Ltd ($292) | 52.5% | 60.7% | 73.4% | 72.1% | 67.6% |
| Sino Hotels Holdings Ltd ($1221) | 69.7% | 71.3% | 70.4% | 68.9% | 65.8% |
| |
|---|
| Median (17 companies) | 56.1% | 57.2% | 55.9% | 52.0% | 56.0% |
|---|
| Regal Hotels International Holdings Ltd ($78) | 42.6% | 50.4% | 33.1% | 47.8% | 45.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Standard Hotel Group Ltd ($292) | 69.1% | -23.9% | 65.2% | 49.9% | 40.4% |
| Emperor Entertainment Hotel Ltd ($296) | 38.7% | 44.9% | 46.4% | 46.9% | 43.1% |
| Sino Hotels Holdings Ltd ($1221) | 42.8% | 46.5% | 45.9% | 43.1% | 39.6% |
| Far East Consortium International Ltd/HK ($35) | 50.1% | 57.2% | 34.5% | 43.0% | 36.4% |
| NagaCorp Ltd ($3918) | 49.2% | 49.8% | 50.1% | 42.8% | 45.3% |
| |
|---|
| Median (23 companies) | 26.7% | 26.7% | 26.4% | 25.8% | 30.1% |
|---|
| Regal Hotels International Holdings Ltd ($78) | -4.7% | 41.0% | 27.0% | 35.7% | 34.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Macau Legend Development Ltd ($1680) | 1.3% | 5.0% | 24.2% | 73.0% | |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 2.4% | 8.1% | 28.7% | 55.4% | 22.6% |
| Shangri-La Asia Ltd ($69) | 26.5% | 48.5% | 33.1% | 41.2% | |
| Wynn Macau Ltd ($1128) | 3.2% | 5.2% | 11.0% | 28.2% | |
| NagaCorp Ltd ($3918) | 20.3% | 25.9% | 17.2% | 24.0% | 27.8% |
| |
|---|
| Median (23 companies) | 6.5% | 6.3% | 11.0% | 10.8% | 14.5% |
|---|
| Regal Hotels International Holdings Ltd ($78) | 4.9% | 7.4% | 7.2% | 60.4% | 12.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| MGM China Holdings Ltd ($2282) | 47.3% | 46.2% | 53.8% | 54.5% | 24.0% |
| Wynn Macau Ltd ($1128) | 66.1% | 53.9% | 42.3% | 29.9% | |
| Galaxy Entertainment Group Ltd ($27) | 14.7% | 25.2% | 30.0% | 27.5% | 10.2% |
| Sands China Ltd ($1928) | 14.5% | 14.2% | 24.4% | 26.7% | 15.8% |
| SJM Holdings Ltd ($880) | 26.2% | 29.7% | 31.0% | 24.8% | 8.6% |
| |
|---|
| Median (23 companies) | 8.8% | 7.6% | 5.7% | 3.9% | 4.5% |
|---|
| Regal Hotels International Holdings Ltd ($78) | -2.4% | 2.8% | 2.5% | 1.5% | 1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Century City International Holdings Ltd ($355) | -58.1x | 6.5x | 9.3x | 11.2x | 12.3x |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 7.8x | 4.5x | 4.1x | 10.4x | 6.3x |
| Shangri-La Asia Ltd ($69) | 4.0x | 6.0x | 6.8x | 6.9x | |
| Zhuhai Holdings Investment Group Ltd ($908) | -3.7x | -4.1x | 11.1x | 6.7x | |
| Asia Standard Hotel Group Ltd ($292) | 3.5x | | 3.7x | 5.2x | 5.5x |
| |
|---|
| Median (21 companies) | 0.8x | 0.5x | 0.6x | 0.5x | 2.5x |
|---|
| Regal Hotels International Holdings Ltd ($78) | | 5.0x | 8.7x | 11.8x | 11.1x |
