Shangri-La Asia Ltd Net Debt / EBITDA jumped on 2.8x from 6.9x to 9.8x in 2015 and Debt increased slightly on 1.2%
24/03/2016 • About Shangri-La Asia Ltd (
$69) • By InTwits
Shangri-La Asia Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shangri-La Asia Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.1%
- EBITDA Margin is declining: 22.6% in 2015 vs. 25.0% in 2014 vs. 27.3% in 2011
- Shangri-La Asia Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 36.7%. At the same time it's a lot of higher than industry average of 19.8%.
- CAPEX is quite volatile: 384 in 2015, 217 in 2014, 214 in 2013, 339 in 2012, 135 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.1%
- It operates with high leverage: Net Debt/EBITDA is 9.8x while industry average is -21.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shangri-La Asia Ltd ($69) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,912 | 2,057 | 2,081 | 2,112 | 2,123 | 0.5% |
| Gross Profit | 1,072 | 1,176 | 1,174 | 1,199 | 1,189 | -0.9% |
| SG&A | 253 | 264 | 280 | 289 | 292 | 1.2% |
| EBITDA | 522 | 590 | 549 | 528 | 479 | -9.3% |
| Net Income | 253 | 359 | 392 | 181 | 140 | -22.5% |
Balance Sheet
|
|---|
| Cash | 839 | 839 | 1,135 | 1,442 | 489 | -66.1% |
| Short Term Debt | 536 | 529 | 405 | 703 | 1,603 | 127.9% |
| Long Term Debt | 2,391 | 3,837 | 4,448 | 4,403 | 3,565 | -19.0% |
Cash flow
|
|---|
| Capex | 506 | 997 | 690 | 871 | 727 | -16.5% |
Ratios
|
|---|
| Revenue growth | 21.4% | 7.6% | 1.2% | 1.5% | 0.5% | |
| EBITDA growth | 14.2% | 13.0% | -7.0% | -3.9% | -9.3% | |
| Gross Margin | 56.1% | 57.2% | 56.4% | 56.8% | 56.0% | -0.8% |
| EBITDA Margin | 27.3% | 28.7% | 26.4% | 25.0% | 22.6% | -2.4% |
| Net Income Margin | 13.2% | 17.4% | 18.9% | 8.6% | 6.6% | -2.0% |
| SG&A, % of revenue | 13.2% | 12.8% | 13.4% | 13.7% | 13.8% | 0.1% |
| CAPEX, % of revenue | 26.5% | 48.5% | 33.1% | 41.2% | 34.3% | -7.0% |
| ROIC | 2.6% | 2.8% | 2.0% | 1.7% | 1.1% | -0.6% |
| ROE | 4.9% | 6.2% | 6.4% | 2.7% | 2.1% | -0.6% |
| Net Debt/EBITDA | 4.0x | 6.0x | 6.8x | 6.9x | 9.8x | 2.8x |
Revenue and profitability
The company's Revenue increased slightly on 0.52% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.7 pp from 7.4% to -16.3% in FY2015.
Gross Margin decreased slightly on 0.78 pp from 56.8% to 56.0% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased slightly on 2.0 pp from 8.6% to 6.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Shangri-La Asia Ltd had CAPEX/Revenue of 34.3%. CAPEX/Revenue dropped on 14.2 pp from 48.5% in 2012 to 34.3% in 2015. For the last three years the average CAPEX/Revenue was 36.2%.Shangri-La Asia Ltd maintained rich investment policy and has spent a lot to CAPEX (152% of EBITDA).
Return on investment
The company operates at low ROIC (1.09%) and ROE (2.11%). ROIC decreased slightly on 0.60 pp from 1.7% to 1.1% in 2015. ROE decreased slightly on 0.63 pp from 2.7% to 2.1% in 2015.
Leverage (Debt)
Debt level is 9.8x Net Debt / EBITDA and 10.8x Debt / EBITDA. Net Debt / EBITDA jumped on 2.8x from 6.9x to 9.8x in 2015. Debt increased slightly on 1.2% in 2015 while cash dropped on 66.1% in 2015.
Appendix 1: Peers in Lodging
Below we provide Shangri-La Asia Ltd benchmarking against other companies in Lodging 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 |
|---|
| China New City Commercial Development Ltd ($1321) | | -16.9% | 433.0% | -76.2% | 141.3% |
| Zhuhai Holdings Investment Group Ltd ($908) | | 229.8% | 14.5% | 57.0% | 76.3% |
| Century City International Holdings Ltd ($355) | | 283.6% | 108.7% | -35.8% | 25.9% |
| Far East Consortium International Ltd/HK ($35) | | 6.4% | 111.9% | 9.0% | 25.7% |
| NagaCorp Ltd ($3918) | | 24.6% | 23.7% | 17.2% | 24.6% |
| |
|---|
| Median (20 companies) | 26.4% | 14.4% | 13.8% | 0.7% | -6.8% |
|---|
| Shangri-La Asia Ltd ($69) | | 7.6% | 1.2% | 1.5% | 0.5% |
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% |
| 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% |
| NagaCorp Ltd ($3918) | 73.2% | 72.9% | 72.1% | 67.4% | 65.1% |
| |
|---|
| Median (14 companies) | 52.5% | 55.7% | 46.3% | 51.3% | 48.6% |
|---|
| Shangri-La Asia Ltd ($69) | 56.1% | 57.2% | 56.4% | 56.8% | 56.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| NagaCorp Ltd ($3918) | 49.2% | 49.8% | 50.1% | 42.8% | 45.3% |
| Emperor Entertainment Hotel Ltd ($296) | 38.7% | 44.9% | 46.4% | 46.9% | 43.1% |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 40.9% | 41.2% | 40.5% | 25.8% | 41.5% |
| Asia Standard Hotel Group Ltd ($292) | 69.1% | -23.9% | 65.2% | 49.9% | 40.4% |
| Sino Hotels Holdings Ltd ($1221) | 42.8% | 46.5% | 45.9% | 43.1% | 39.6% |
| |
|---|
| Median (20 companies) | 24.2% | 26.7% | 26.4% | 25.8% | 27.6% |
|---|
| Shangri-La Asia Ltd ($69) | 27.3% | 28.7% | 26.4% | 25.0% | 22.6% |
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% | 68.5% |
| Legend Strategy International Holdings Group Co Ltd ($1355) | 15.7% | 17.0% | 38.0% | 1.2% | 62.6% |
| Century City International Holdings Ltd ($355) | 0.3% | 21.2% | 32.9% | 13.4% | 35.8% |
| NagaCorp Ltd ($3918) | 20.3% | 25.9% | 17.2% | 24.0% | 27.8% |
| MGM China Holdings Ltd ($2282) | 1.5% | 4.8% | 7.5% | 10.8% | 26.2% |
| |
|---|
| Median (20 companies) | 6.3% | 6.3% | 8.9% | 10.8% | 13.7% |
|---|
| Shangri-La Asia Ltd ($69) | 26.5% | 48.5% | 33.1% | 41.2% | 34.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| NagaCorp Ltd ($3918) | 27.6% | 30.6% | 28.9% | 22.6% | 28.6% |
| MGM China Holdings Ltd ($2282) | 47.3% | 46.2% | 53.8% | 54.5% | 24.0% |
| Sands China Ltd ($1928) | 14.5% | 14.2% | 24.4% | 26.7% | 15.8% |
| Emperor Entertainment Hotel Ltd ($296) | 13.0% | 22.2% | 21.1% | 18.4% | 12.0% |
| Galaxy Entertainment Group Ltd ($27) | 14.7% | 25.2% | 30.0% | 27.5% | 10.2% |
| |
|---|
| Median (20 companies) | 8.8% | 7.6% | 5.7% | 3.9% | 4.2% |
|---|
| Shangri-La Asia Ltd ($69) | 2.6% | 2.8% | 2.0% | 1.7% | 1.1% |
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 |
| Macau Legend Development Ltd ($1680) | 2.2x | 2.2x | 0.6x | 0.2x | 7.1x |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 7.8x | 4.5x | 4.1x | 10.4x | 6.3x |
| |
|---|
| Median (19 companies) | 0.6x | 0.5x | 0.6x | 0.5x | 3.8x |
|---|
| Shangri-La Asia Ltd ($69) | 4.0x | 6.0x | 6.8x | 6.9x | 9.8x |
