Looking for a profitable fast-growing stock? Look at Synergis Holdings Ltd
30/03/2016 • About Synergis Holdings Ltd (
$2340) • By InTwits
Synergis Holdings Ltd is an attractive growth stock in Real Estate industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Synergis Holdings Ltd showed fast growth in the last financial year. Synergis Holdings Ltd's revenue surged on 28.4% in FY2015. EBITDA also increased considerably: 15.5% for the same period.
In the longer period the company showed fast revenue growth of 39.1% from 2012 to 2015 annualy. EBITDA surged on 37.8% from 2012 to 2015 annualy.
Synergis Holdings Ltd ($2340) financials for the last 5 years
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 679 | 908 | 1,680 | 1,906 | 2,447 |
|---|
| Revenue growth, % | | 33.8% | 84.9% | 13.5% | 28.4% |
|---|
| Gross margin, % | 15.6% | 14.7% | 10.7% | 9.77% | 7.60% |
|---|
| SG&A, % | | 12.1% | 7.26% | 6.37% | 4.43% |
|---|
| EBITDA | 28 | 34 | 77 | 78 | 90 |
|---|
| EBITDA growth, % | | 23.0% | 125.1% | 0.6% | 15.5% |
|---|
| EBITDA margin, % | 4.10% | 3.77% | 4.59% | 4.07% | 3.66% |
|---|
| Net Income | 16 | 19 | 34 | 45 | 55 |
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| Net Income margin, % | 2.36% | 2.06% | 2.05% | 2.38% | 2.26% |
|---|
| |
| CAPEX | 5 | 4 | 5 | 4 | 3 |
|---|
| CAPEX/Revenue, % | 0.715% | 0.478% | 0.287% | 0.207% | 0.110% |
|---|
| Debt | 0 | 180 | 276 | 247 | 294 |
|---|
| Cash | 58 | 90 | 79 | 91 | 128 |
|---|
| Net Debt/EBITDA | -2.1x | 2.6x | 2.6x | 2.0x | 1.8x |
|---|
| |
| ROIC, % | 16.3% | 10.0% | 13.3% | 12.3% | 13.9% |
|---|
| ROE, % | 12.9% | 11.5% | 16.6% | 20.0% | 21.7% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the last 3 years the company's EBITDA margin decreased slightly on 0.100 pp from 3.80% in 2012 to 3.70% in 2015.
Synergis Holdings Ltd shows attractive ROIC at 13.9% for the last 12 months which assumes stable development model. Three years ago it was a bit lower at 10.0%. It's average level of ROIC for the last three years was 13.2%.
Net Income margin decreased slightly on 0.100 pp from 2.40% to 2.30% in 2015. If we look for the longer period Synergis Holdings Ltd showed Net Income margin growth of 0.200 pp from 2.10% in 2012 to 2.30% in 2015.
Synergis Holdings Ltd operates at ROE of 21.7%. For the last three years the average ROE was 19.4%.
Capital expenditures (CAPEX)
In FY2015 the company had CAPEX/Revenue of 0.110%. The company showed big decline in CAPEX/Revenue of 0.367 pp from 0.478% in 2012 to 0.110% in 2015. It's average CAPEX/Revenue for the last three years was 0.201%.
Leverage (Debt)
Having such a fast growth profile Synergis Holdings Ltd keeps medium debt level at 1.8x Net Debt/EBITDA. In the last 3 years leverage dropped on 0.78x from 2.63x in 2012 to 1.84x in 2015.
Valuation vs. comparable companies
The company trades at 6.3x EV/EBITDA which is 81.6% lower than 34.1x Real Estate industry avearge calculated based on 185 companies. The market closed today at 7.2x P/E for Synergis Holdings Ltd which is 61.7% lower than 18.7x Real Estate peer group avearge calculated on the basis of 77 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Synergis Holdings Ltd traded at 6.5x EV/(EBITDA-CAPEX) which is higher vs. -4.1x Real Estate peer group avearge calculated on the basis of 60 companies.
Peers in Real Estate
Below we provide Synergis Holdings Ltd 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | -0.1% | -27.5% | -21.9% | 3,008.3% | |
| 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 (175 companies) | 10.1% | 15.8% | 13.1% | 5.0% | 4.2% |
|---|
| Synergis Holdings Ltd ($2340) | | 33.8% | 84.9% | 13.5% | 28.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 (157 companies) | 44.2% | 42.2% | 41.9% | 39.3% | 43.0% |
|---|
| Synergis Holdings Ltd ($2340) | 15.6% | 14.7% | 10.7% | 9.8% | 7.6% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| 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 (174 companies) | 35.4% | 29.7% | 28.3% | 27.8% | 28.8% |
|---|
| Synergis Holdings Ltd ($2340) | 4.1% | 3.8% | 4.6% | 4.1% | 3.7% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 (176 companies) | 5.9% | 5.5% | 6.2% | 4.8% | 3.7% |
|---|
| Synergis Holdings Ltd ($2340) | 0.7% | 0.5% | 0.3% | 0.2% | 0.1% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| Zall Development Group Ltd ($2098) | 39.0% | 19.2% | 17.6% | 18.7% | |
| China Overseas Land & Investment Ltd ($688) | 18.0% | 18.4% | 15.1% | 18.5% | 15.4% |
| |
|---|
| Median (179 companies) | 4.6% | 4.1% | 3.9% | 3.9% | 2.7% |
|---|
| Synergis Holdings Ltd ($2340) | 16.3% | 10.0% | 13.3% | 12.3% | 13.9% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 (141 companies) | 2.1x | 2.2x | 2.7x | 3.0x | 3.2x |
|---|
| Synergis Holdings Ltd ($2340) | -2.1x | 2.6x | 2.6x | 2.0x | 1.8x |
