Wuzhou International Holdings Ltd Net Debt / EBITDA surged on 32.6x from 4.3x to 36.8x in 2015 and Debt jumped on 38.3%
30/03/2016 • About Wuzhou International Holdings Ltd (
$1369) • By InTwits
Wuzhou International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wuzhou International Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.3%
- EBITDA Margin is declining: 5.3% in 2015 vs. 23.1% in 2014 vs. 44.0% in 2011
- EBITDA Margin is quite volatile: 5.3% in 2015, 23.1% in 2014, 47.0% in 2013, 57.8% in 2012, 44.0% in 2011
- Wuzhou International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.1%. At the same time it's in pair with industry average of 3.5%.
- CAPEX is quite volatile: 492 in 2015, 261 in 2014, 345 in 2013, 466 in 2012, 155 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.3%
- It operates with high leverage: Net Debt/EBITDA is 36.8x while industry average is 11.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wuzhou International Holdings Ltd ($1369) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,516 | 2,253 | 4,050 | 4,308 | 3,333 | -22.6% |
| Gross Profit | 739 | 1,201 | 1,769 | 1,499 | 715 | -52.3% |
| SG&A | 311 | 504 | 787 | 941 | 858 | -8.8% |
| EBITDA | 668 | 1,302 | 1,904 | 995 | 177 | -82.2% |
| Net Income | 313 | 700 | 1,020 | 253 | -482 | -290.5% |
Balance Sheet
|
|---|
| Cash | 516 | 755 | 941 | 1,179 | 1,006 | -14.7% |
| Short Term Debt | 371 | 772 | 1,082 | 1,787 | 3,367 | 88.4% |
| Long Term Debt | 852 | 1,627 | 2,712 | 3,644 | 4,142 | 13.7% |
Cash flow
|
|---|
| Capex | 155 | 466 | 345 | 261 | 492 | 88.7% |
Ratios
|
|---|
| Revenue growth | 73.1% | 48.7% | 79.7% | 6.4% | -22.6% | |
| EBITDA growth | 116.4% | 95.1% | 46.2% | -47.8% | -82.2% | |
| Gross Margin | 48.8% | 53.3% | 43.7% | 34.8% | 21.5% | -13.3% |
| EBITDA Margin | 44.0% | 57.8% | 47.0% | 23.1% | 5.3% | -17.8% |
| Net Income Margin | 20.7% | 31.1% | 25.2% | 5.9% | -14.5% | -20.3% |
| SG&A, % of revenue | 20.5% | 22.4% | 19.4% | 21.9% | 25.8% | 3.9% |
| CAPEX, % of revenue | 10.3% | 20.7% | 8.5% | 6.1% | 14.8% | 8.7% |
| ROIC | 31.7% | 34.5% | 28.1% | 10.0% | 1.3% | -8.7% |
| ROE | 44.3% | 65.3% | 42.3% | 7.1% | -13.3% | -20.4% |
| Net Debt/EBITDA | 1.1x | 1.3x | 1.5x | 4.3x | 36.8x | 32.6x |
Revenue and profitability
The company's Revenue dropped on 22.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.7 pp from -38.7% to -34.9% in 2015.
Gross Margin dropped on 13.3 pp from 34.8% to 21.5% in 2015. SG&A as a % of Revenue increased on 3.9 pp from 21.9% to 25.8% in 2015.
Net Income marign dropped on 20.3 pp from 5.9% to -14.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
Wuzhou International Holdings Ltd's CAPEX/Revenue was 14.8% in 2015. CAPEX/Revenue decreased on 5.9 pp from 20.7% in 2012 to 14.8% in 2015. It's average level of CAPEX/Revenue for the last three years was 9.8%.The company has spent a lot to CAPEX (279% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (1.30%) and negative ROE (-13.33%). ROIC decreased on 8.7 pp from 10.0% to 1.3% in 2015. ROE dropped on 20.4 pp from 7.1% to -13.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 36.8x and Debt / EBITDA is 42.5x. Net Debt / EBITDA surged on 32.6x from 4.3x to 36.8x in 2015. Debt jumped on 38.3% in 2015 while cash dropped on 14.7% in 2015.
Appendix 1: Peers in Real Estate
Below you can find Wuzhou International Holdings 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 (167 companies) | 34.7% | 15.8% | 13.5% | 5.2% | 4.2% |
|---|
| Wuzhou International Holdings Ltd ($1369) | | 48.7% | 79.7% | 6.4% | -22.6% |
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 (148 companies) | 43.7% | 41.8% | 41.1% | 39.2% | 41.3% |
|---|
| Wuzhou International Holdings Ltd ($1369) | 48.8% | 53.3% | 43.7% | 34.8% | 21.5% |
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 (167 companies) | 35.4% | 28.9% | 28.3% | 27.3% | 24.6% |
|---|
| Wuzhou International Holdings Ltd ($1369) | 44.0% | 57.8% | 47.0% | 23.1% | 5.3% |
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% |
| Madex International Holdings Ltd ($231) | 586.8% | 174.5% | 519.7% | 205.3% | 350.6% |
| 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% |
| |
|---|
| Median (168 companies) | 5.5% | 5.4% | 6.1% | 4.7% | 3.8% |
|---|
| Wuzhou International Holdings Ltd ($1369) | 10.3% | 20.7% | 8.5% | 6.1% | 14.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hydoo International Holding Ltd ($1396) | 88.4% | 44.3% | 62.0% | 12.9% | 16.6% |
| 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% |
| |
|---|
| Median (169 companies) | 4.6% | 4.2% | 4.0% | 4.2% | 2.9% |
|---|
| Wuzhou International Holdings Ltd ($1369) | 31.7% | 34.5% | 28.1% | 10.0% | 1.3% |
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 (128 companies) | 2.3x | 2.3x | 2.7x | 2.9x | 3.2x |
|---|
| Wuzhou International Holdings Ltd ($1369) | 1.1x | 1.3x | 1.5x | 4.3x | 36.8x |
