Macau Legend Development Ltd Net Income dropped on 156% in 2015 and EBITDA Margin dropped on 30.7 pp from 41.8% to 11.1%
23/03/2016 • About Macau Legend Development Ltd (
$1680) • By InTwits
Macau Legend Development Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Macau Legend Development Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.4%
- EBITDA Margin is quite volatile: 11.1% in 2015, 41.8% in 2014, 39.8% in 2013, 48.6% in 2012, 56.6% in 2011
- Macau Legend Development Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 34.4%. At the same time it's a lot of higher than industry average of 20.3%.
- CAPEX is quite volatile: 983 in 2015, 1,321 in 2014, 427 in 2013, 75.6 in 2012, 17.5 in 2011
- The company has unprofitable business model: ROIC is at -1.4%
- It operates with high leverage: Net Debt/EBITDA is 7.1x while industry average is -22.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Macau Legend Development Ltd ($1680) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,346 | 1,501 | 1,764 | 1,811 | 1,436 | -20.7% |
| Gross Profit | 927 | 836 | 987 | 929 | 421 | -54.7% |
| SG&A | 224 | 262 | 484 | 505 | 611 | 21.0% |
| EBITDA | 761 | 729 | 702 | 757 | 159 | -78.9% |
| Net Income | 648 | 535 | 510 | 479 | -269 | -156.1% |
Balance Sheet
|
|---|
| Cash | 72 | 112 | 1,007 | 4,047 | 2,918 | -27.9% |
| Short Term Debt | 272 | 334 | 356 | 449 | 652 | 45.4% |
| Long Term Debt | 1,456 | 1,405 | 1,049 | 3,778 | 3,395 | -10.1% |
Cash flow
|
|---|
| Capex | 17 | 76 | 427 | 1,321 | 983 | -25.6% |
Ratios
|
|---|
| Revenue growth | 22.9% | 11.5% | 17.5% | 2.7% | -20.7% | |
| EBITDA growth | 31.9% | -4.2% | -3.8% | 8.0% | -78.9% | |
| Gross Margin | 68.9% | 55.7% | 55.9% | 51.3% | 29.3% | -22.0% |
| EBITDA Margin | 56.6% | 48.6% | 39.8% | 41.8% | 11.1% | -30.7% |
| Net Income Margin | 48.2% | 35.7% | 28.9% | 26.4% | -18.7% | -45.1% |
| SG&A, % of revenue | 16.6% | 17.5% | 27.4% | 27.9% | 42.6% | 14.7% |
| CAPEX, % of revenue | 1.3% | 5.0% | 24.2% | 73.0% | 68.5% | -4.5% |
| ROIC | 60.7% | 11.5% | 7.3% | 5.4% | -1.4% | -6.8% |
| ROE | | 16.2% | 9.3% | 7.3% | -3.7% | -11.0% |
| Net Debt/EBITDA | 2.2x | 2.2x | 0.6x | 0.2x | 7.1x | 6.8x |
Revenue and profitability
The company's Revenue dropped on 20.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.8 pp from 8.6% to 14.4% in 2015.
Gross Margin dropped on 22.0 pp from 51.3% to 29.3% in 2015. SG&A as a % of Revenue surged on 14.7 pp from 27.9% to 42.6% in 2015.
Net Income marign dropped on 45.1 pp from 26.4% to -18.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 68.5% in 2015. Macau Legend Development Ltd's CAPEX/Revenue jumped on 63.4 pp from 5.0% in 2012 to 68.5% in 2015. Average CAPEX/Revenue for the last three years was 55.2%.Battling declining revenue Macau Legend Development Ltd made large investments to CAPEX (617% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-1.38%) and ROE (-3.69%). ROIC decreased on 6.8 pp from 5.4% to -1.4% in 2015. ROE dropped on 11.0 pp from 7.3% to -3.7% in 2015.
Leverage (Debt)
Debt level is 7.1x Net Debt / EBITDA and 25.4x Debt / EBITDA. Net Debt / EBITDA surged on 6.8x from 0.2x to 7.1x in 2015. Debt decreased on 4.2% in 2015 while cash dropped on 27.9% in 2015.
Management team
Macau Legend Development Ltd's CEO is Chow Kam Fai "David". Chow Kam Fai "David" has 11 years tenure at the company.
Appendix 1: Peers in Lodging
Below you can find Macau Legend Development 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) | 21.4% | 14.4% | 10.2% | 0.7% | -6.8% |
|---|
| Macau Legend Development Ltd ($1680) | | 11.5% | 17.5% | 2.7% | -20.7% |
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) | 52.5% | 57.2% | 46.3% | 52.0% | 53.9% |
|---|
| Macau Legend Development Ltd ($1680) | 68.9% | 55.7% | 55.9% | 51.3% | 29.3% |
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) | 24.2% | 26.7% | 26.4% | 25.8% | 30.3% |
|---|
| Macau Legend Development Ltd ($1680) | 56.6% | 48.6% | 39.8% | 41.8% | 11.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Regal Hotels International Holdings Ltd ($78) | 4.9% | 7.4% | 7.2% | 60.4% | 12.0% |
| 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% | 7.4% | 8.9% | 10.8% | 13.7% |
|---|
| Macau Legend Development Ltd ($1680) | 1.3% | 5.0% | 24.2% | 73.0% | 68.5% |
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) | 5.2% | 5.7% | 5.6% | 3.6% | 4.2% |
|---|
| Macau Legend Development Ltd ($1680) | 60.7% | 11.5% | 7.3% | 5.4% | -1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China New City Commercial Development Ltd ($1321) | 18.7x | 26.0x | 7.9x | | 100.1x |
| Century City International Holdings Ltd ($355) | -58.1x | 6.5x | 9.3x | 11.2x | 12.3x |
| Regal Hotels International Holdings Ltd ($78) | | 5.0x | 8.7x | 11.8x | 11.1x |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 7.8x | 4.5x | 4.1x | 10.4x | 6.3x |
| Carrianna Group Holdings Co Ltd ($126) | 7.7x | 3.9x | 6.6x | 2.6x | 6.2x |
| |
|---|
| Median (17 companies) | 0.6x | 0.5x | 0.8x | 1.0x | 3.4x |
|---|
| Macau Legend Development Ltd ($1680) | 2.2x | 2.2x | 0.6x | 0.2x | 7.1x |
