Evergrande Real Estate Group Ltd CAPEX jumped on 74.5% in 2015 and Revenue jumped on 19.5%
29/03/2016 • About Evergrande Real Estate Group Ltd (
$3333) • By InTwits
Evergrande Real Estate Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Evergrande Real Estate Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's a lot of higher than industry average of 0.9%.
- CAPEX is quite volatile: 2,419 in 2015, 6,258 in 2014, 4,577 in 2013, 1,703 in 2012, 1,601 in 2011
- The company has business model with low profitability: ROIC is at 8.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Evergrande Real Estate Group Ltd ($3333) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 61,918 | 65,261 | 93,672 | 111,398 | 133,130 | 19.5% |
| Gross Profit | 20,608 | 18,210 | 27,649 | 31,784 | 37,413 | 17.7% |
| SG&A | 4,882 | 5,618 | 7,782 | 13,192 | 19,464 | 47.5% |
| EBITDA | 20,158 | 16,996 | 25,948 | 29,167 | 32,720 | 12.2% |
| Net Income | 11,324 | 9,171 | 13,268 | 16,943 | 15,548 | -8.2% |
Balance Sheet
|
|---|
| Cash | 20,082 | 17,790 | 40,118 | 29,847 | 103,090 | 245.4% |
| Short Term Debt | 10,228 | 19,031 | 35,796 | 79,663 | 158,744 | 99.3% |
| Long Term Debt | 41,499 | 41,243 | 73,021 | 76,401 | 138,162 | 80.8% |
Cash flow
|
|---|
| Capex | 9,222 | 7,618 | 12,259 | 8,997 | 15,700 | 74.5% |
Ratios
|
|---|
| Revenue growth | 35.2% | 5.4% | 43.5% | 18.9% | 19.5% | |
| EBITDA growth | 45.4% | -15.7% | 52.7% | 12.4% | 12.2% | |
| Gross Margin | 33.3% | 27.9% | 29.5% | 28.5% | 28.1% | -0.4% |
| EBITDA Margin | 32.6% | 26.0% | 27.7% | 26.2% | 24.6% | -1.6% |
| Net Income Margin | 18.3% | 14.1% | 14.2% | 15.2% | 11.7% | -3.5% |
| SG&A, % of revenue | 7.9% | 8.6% | 8.3% | 11.8% | 14.6% | 2.8% |
| CAPEX, % of revenue | 14.9% | 11.7% | 13.1% | 8.1% | 11.8% | 3.7% |
| ROIC | 25.4% | 15.5% | 15.5% | 11.2% | 8.1% | -3.1% |
| ROE | 43.1% | 26.1% | 29.0% | 25.3% | 20.5% | -4.8% |
| Net Debt/EBITDA | 1.6x | 2.5x | 2.6x | 4.3x | 5.9x | 1.6x |
Revenue and profitability
Evergrande Real Estate Group Ltd's Revenue surged on 19.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.9 pp from 24.6% to 16.7% in FY2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased on 2.8 pp from 11.8% to 14.6% in 2015.
Net Income marign decreased on 3.5 pp from 15.2% to 11.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 11.8%. Evergrande Real Estate Group Ltd's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 11.0%.
Return on investment
The company operates at good ROE (20.48%) while ROIC is low (8.11%). ROIC decreased on 3.1 pp from 11.2% to 8.1% in 2015. ROE decreased on 4.8 pp from 25.3% to 20.5% in 2015.
Leverage (Debt)
Debt level is 5.9x Net Debt / EBITDA and 9.1x Debt / EBITDA. Net Debt / EBITDA jumped on 1.6x from 4.3x to 5.9x in 2015. Debt surged on 90.2% in 2015 while cash surged on 245% in 2015.
Appendix 1: Peers in Real Estate
Below you can find Evergrande Real Estate Group Ltd benchmarking vs. other companies in Real Estate 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 |
|---|
| Guangdong Land Holdings Ltd ($124) | | | | | 24,971.2% |
| Wanda Hotel Development Co Ltd ($169) | | | -51.4% | -86.2% | 1,071.2% |
| Henderson Investment Ltd ($97) | | -78.9% | | | 737.1% |
| ITC Properties Group Ltd ($199) | | -70.5% | -95.2% | 75.7% | 678.6% |
| LT Commercial Real Estate Ltd ($112) | | 30.5% | -53.9% | -83.4% | 662.4% |
| |
|---|
| Median (150 companies) | 12.6% | 16.4% | 13.1% | 5.2% | 3.9% |
|---|
| Evergrande Real Estate Group Ltd ($3333) | | 5.4% | 43.5% | 18.9% | 19.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 71.1% | 79.0% | 95.2% | 97.9% | 99.9% |
| Tern Properties Co Ltd ($277) | 96.9% | 96.7% | 98.4% | 98.4% | 98.7% |
| YT Realty Group Ltd ($75) | 91.5% | 94.4% | 96.6% | 96.7% | 97.6% |
| Wah Ha Realty Co Ltd ($278) | 88.7% | 96.3% | 96.0% | 93.2% | 95.9% |
| Soundwill Holdings Ltd ($878) | 35.6% | 53.1% | 74.5% | 46.9% | 95.7% |
| |
|---|
| Median (132 companies) | 44.2% | 41.9% | 41.9% | 39.3% | 42.2% |
|---|
| Evergrande Real Estate Group Ltd ($3333) | 33.3% | 27.9% | 29.5% | 28.5% | 28.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinese Estates Holdings Ltd ($127) | 340.9% | 356.2% | 91.6% | 195.5% | 397.4% |
| SOHO China Ltd ($410) | 113.8% | 113.6% | 80.8% | 104.0% | 201.9% |
| Beijing Properties Holdings Ltd ($925) | 33.2% | -606.3% | 2,162.6% | 224.3% | 186.5% |
| Swire Properties Ltd ($1972) | 283.7% | 154.5% | 114.6% | 73.2% | 100.3% |
| Tern Properties Co Ltd ($277) | 82.9% | 103.0% | 112.8% | 78.4% | 86.9% |
| |
|---|
| Median (150 companies) | 35.5% | 29.7% | 28.5% | 27.8% | 26.5% |
|---|
| Evergrande Real Estate Group Ltd ($3333) | 32.6% | 26.0% | 27.7% | 26.2% | 24.6% |
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% | 4,834.8% |
| China Oceanwide Holdings Ltd ($715) | 0.4% | 0.8% | 0.3% | 2.0% | 880.6% |
| Pacific Century Premium Developments Ltd ($432) | 6.5% | 2.9% | 323.1% | 351.2% | 340.6% |
| Hon Kwok Land Investment Co Ltd ($160) | 90.6% | 20.6% | 157.3% | 144.5% | 296.3% |
| Silver Grant International Industries Ltd ($171) | 100.8% | 134.5% | 193.1% | 204.1% | 280.7% |
| |
|---|
| Median (151 companies) | 5.8% | 5.5% | 6.1% | 4.7% | 3.9% |
|---|
| Evergrande Real Estate Group Ltd ($3333) | 14.9% | 11.7% | 13.1% | 8.1% | 11.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gemdale Properties & Investment Corp Ltd ($535) | 8.9% | 15.3% | 19.6% | 10.8% | 15.9% |
| China Overseas Land & Investment Ltd ($688) | 18.0% | 18.4% | 15.1% | 18.5% | 15.4% |
| Colour Life Services Group Co Ltd ($1778) | | 44.2% | 47.9% | 29.3% | 14.5% |
| Dalian Wanda Commercial Properties Co Ltd ($3699) | | 26.8% | 19.6% | 12.3% | 14.4% |
| China Vanke Co Ltd ($2202) | 16.8% | 17.8% | 13.5% | 14.6% | 14.1% |
| |
|---|
| Median (152 companies) | 4.6% | 4.1% | 4.0% | 4.1% | 2.8% |
|---|
| Evergrande Real Estate Group Ltd ($3333) | 25.4% | 15.5% | 15.5% | 11.2% | 8.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shui On Land Ltd ($272) | 7.9x | 22.1x | 13.2x | 17.1x | 54.2x |
| Beijing Capital Land Ltd ($2868) | 2.9x | 7.1x | 4.6x | 11.7x | 49.1x |
| Sunshine 100 China Holdings Ltd ($2608) | 19.8x | 9.9x | 12.4x | 12.9x | 42.3x |
| Greenland Hong Kong Holdings Ltd ($337) | 3.7x | | 6.2x | 49.3x | 38.4x |
| LVGEM China Real Estate Invest ($95) | 21.5x | 24.4x | | 2.9x | 16.7x |
| |
|---|
| Median (117 companies) | 2.2x | 2.2x | 2.8x | 3.0x | 3.4x |
|---|
| Evergrande Real Estate Group Ltd ($3333) | 1.6x | 2.5x | 2.6x | 4.3x | 5.9x |
