Keck Seng Investments revenue growth accelerated to 27.7% in 2015 vs. 11.9% a year earliner
24/03/2016 • About Keck Seng Investments (
$184) • By InTwits
Keck Seng Investments reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 26.8% in 2015 vs. 29.2% in 2014 vs. 30.6% in 2011
- Keck Seng Investments has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: 50.9 in 2015, 81.0 in 2014, 47.7 in 2013, 57.5 in 2012, 212 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Keck Seng Investments ($184) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,182 | 1,364 | 1,357 | 1,519 | 1,940 | 27.7% |
| Gross Profit | 1,042 | 1,202 | 1,215 | 1,360 | 1,764 | 29.7% |
| SG&A | | 286 | 330 | 385 | 492 | 27.7% |
| EBITDA | 361 | 525 | 409 | 443 | 520 | 17.3% |
| Net Income | 149 | 356 | 326 | 268 | 229 | -14.6% |
Balance Sheet
|
|---|
| Cash | 1,123 | 1,539 | 1,762 | 1,468 | 1,791 | 22.0% |
| Short Term Debt | 333 | 385 | 78 | 115 | 91 | -20.1% |
| Long Term Debt | 593 | 0 | 260 | 1,820 | 1,739 | -4.4% |
Cash flow
|
|---|
| Capex | 212 | 57 | 48 | 81 | 51 | -37.2% |
Ratios
|
|---|
| Revenue growth | -0.5% | 15.4% | -0.5% | 11.9% | 27.7% | |
| EBITDA growth | -11.4% | 45.3% | -22.1% | 8.3% | 17.3% | |
| Gross Margin | 88.1% | 88.2% | 89.5% | 89.5% | 90.9% | 1.4% |
| EBITDA Margin | 30.6% | 38.5% | 30.2% | 29.2% | 26.8% | -2.4% |
| Net Income Margin | 12.6% | 26.1% | 24.0% | 17.7% | 11.8% | -5.8% |
| SG&A, % of revenue | | 21.0% | 24.3% | 25.3% | 25.3% | 0.0% |
| CAPEX, % of revenue | 17.9% | 4.2% | 3.5% | 5.3% | 2.6% | -2.7% |
| ROIC | 6.8% | 10.6% | 7.7% | 6.8% | 6.4% | -0.3% |
| ROE | 5.8% | 12.9% | 10.8% | 8.4% | 6.8% | -1.6% |
| Net Debt/EBITDA | -0.5x | -2.2x | -3.5x | 1.1x | 0.1x | -1.0x |
Revenue and profitability
The company's Revenue jumped on 27.7% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 7.6% to 6.3% in FY2015.
Gross Margin increased slightly on 1.4 pp from 89.5% to 90.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 5.8 pp from 17.7% to 11.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.6% in 2015. CAPEX/Revenue decreased slightly on 1.6 pp from 4.2% in 2012 to 2.6% in 2015. It's average CAPEX/Revenue for the last three years was 3.8%.
Return on investment
The company operates at low ROIC (6.45%) and ROE (6.79%). ROIC showed almost no change in 2015. ROE decreased slightly on 1.6 pp from 8.4% to 6.8% in 2015.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and 3.5x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 1.1x to 0.1x in 2015. Debt decreased on 5.4% in 2015 while cash jumped on 22.0% in 2015.
Appendix 1: Peers in Real Estate
Below we provide Keck Seng Investments 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) | | -27.5% | -21.9% | 3,008.3% | -77.4% |
| 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 (177 companies) | 11.5% | 16.4% | 14.0% | 5.2% | 4.1% |
|---|
| Keck Seng Investments ($184) | | 15.4% | -0.5% | 11.9% | 27.7% |
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% | 97.6% |
| ITC Properties Group Ltd ($199) | 29.8% | 22.8% | 92.9% | 95.2% | 62.7% |
| |
|---|
| Median (159 companies) | 43.8% | 41.8% | 41.8% | 39.1% | 42.9% |
|---|
| Keck Seng Investments ($184) | 88.1% | 88.2% | 89.5% | 89.5% | 90.9% |
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% | 186.5% |
| 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 (176 companies) | 35.5% | 29.1% | 28.3% | 26.9% | 27.6% |
|---|
| Keck Seng Investments ($184) | 30.6% | 38.5% | 30.2% | 29.2% | 26.8% |
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 (178 companies) | 5.8% | 5.7% | 6.2% | 4.7% | 4.5% |
|---|
| Keck Seng Investments ($184) | 17.9% | 4.2% | 3.5% | 5.3% | 2.6% |
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% | 1.8% |
| China Vast Industrial Urban Development Co Ltd ($6166) | | 2.2% | 19.7% | 19.8% | 9.1% |
| Zall Development Group Ltd ($2098) | 39.0% | 19.2% | 17.6% | 18.7% | |
| |
|---|
| Median (181 companies) | 4.6% | 4.1% | 4.0% | 4.1% | 2.8% |
|---|
| Keck Seng Investments ($184) | 6.8% | 10.6% | 7.7% | 6.8% | 6.4% |
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 (143 companies) | 2.2x | 2.4x | 2.8x | 3.0x | 3.2x |
|---|
| Keck Seng Investments ($184) | -0.5x | -2.2x | -3.5x | 1.1x | 0.1x |
