Central China Real Estate Ltd revenue jumped on 36.1% in 2015 while EBITDA Margin decreased on 9.2 pp from 25.1% to 15.9%
31/03/2016 • About Central China Real Estate Ltd (
$832) • By InTwits
Central China Real Estate Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Central China Real Estate Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.5%. At the same time it's a lot of higher than industry average of 4.4%.
- CAPEX is quite volatile: 2,038 in 2015, 1,132 in 2014, 792 in 2013, 650 in 2012, 427 in 2011
- The company has business model with low profitability: ROIC is at 9.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Central China Real Estate Ltd ($832) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,638 | 6,346 | 6,951 | 9,229 | 12,563 | 36.1% |
| Gross Profit | 2,574 | 2,246 | 2,369 | 3,097 | 2,788 | -10.0% |
| SG&A | 440 | 620 | 849 | 1,111 | 1,281 | 15.4% |
| EBITDA | 2,106 | 1,694 | 1,979 | 2,318 | 2,002 | -13.6% |
| Net Income | 668 | 823 | 1,026 | 883 | 801 | -9.3% |
Balance Sheet
|
|---|
| Cash | 3,256 | 3,950 | 4,813 | 5,019 | 7,422 | 47.9% |
| Short Term Debt | 4,756 | 1,415 | 2,248 | 1,410 | 2,541 | 80.3% |
| Long Term Debt | 624 | 5,156 | 5,934 | 8,147 | 8,050 | -1.2% |
Cash flow
|
|---|
| Capex | 457 | 609 | 780 | 609 | 386 | -36.6% |
Ratios
|
|---|
| Revenue growth | 47.0% | -4.4% | 9.5% | 32.8% | 36.1% | |
| EBITDA growth | 77.9% | -19.6% | 16.8% | 17.2% | -13.6% | |
| Gross Margin | 38.8% | 35.4% | 34.1% | 33.6% | 22.2% | -11.4% |
| EBITDA Margin | 31.7% | 26.7% | 28.5% | 25.1% | 15.9% | -9.2% |
| Net Income Margin | 10.1% | 13.0% | 14.8% | 9.6% | 6.4% | -3.2% |
| SG&A, % of revenue | 6.6% | 9.8% | 12.2% | 12.0% | 10.2% | -1.8% |
| CAPEX, % of revenue | 6.9% | 9.6% | 11.2% | 6.6% | 3.1% | -3.5% |
| ROIC | 20.5% | 13.6% | 13.0% | 12.8% | 9.9% | -2.9% |
| ROE | 16.4% | 16.8% | 18.3% | 14.2% | 12.1% | -2.1% |
| Net Debt/EBITDA | 1.0x | 1.5x | 1.7x | 2.0x | 1.6x | -0.4x |
Revenue and profitability
Central China Real Estate Ltd's Revenue surged on 36.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.6 pp from 15.0% to 17.6% in 2015.
Gross Margin dropped on 11.4 pp from 33.6% to 22.2% in 2015. SG&A as a % of Revenue decreased slightly on 1.8 pp from 12.0% to 10.2% in 2015.
Net Income marign decreased on 3.2 pp from 9.6% to 6.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 3.1%. The company's CAPEX/Revenue decreased on 6.5 pp from 9.6% in 2012 to 3.1% in 2015. For the last three years the average CAPEX/Revenue was 7.0%.
Return on investment
The company operates at good ROE (12.10%) while ROIC is low (9.90%). ROIC decreased on 2.9 pp from 12.8% to 9.9% in 2015. ROE decreased on 2.1 pp from 14.2% to 12.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 5.3x. Net Debt / EBITDA dropped on 0.4x from 2.0x to 1.6x in 2015. Debt jumped on 10.8% in 2015 while cash jumped on 47.9% in 2015.
Appendix 1: Peers in Real Estate
Below you can find Central China Real Estate 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% |
| GR Properties Ltd ($108) | | 21.6% | -82.9% | 14.6% | 1,203.6% |
| 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% |
| |
|---|
| Median (176 companies) | 32.1% | 16.1% | 14.0% | 5.2% | 4.3% |
|---|
| Central China Real Estate Ltd ($832) | | -4.4% | 9.5% | 32.8% | 36.1% |
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 (157 companies) | 44.0% | 41.9% | 41.9% | 39.2% | 38.9% |
|---|
| Central China Real Estate Ltd ($832) | 38.8% | 35.4% | 34.1% | 33.6% | 22.2% |
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% |
| Zall Development Group Ltd ($2098) | 73.6% | 105.3% | 133.1% | 143.2% | 213.9% |
| 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% |
| |
|---|
| Median (176 companies) | 35.5% | 29.3% | 28.3% | 27.3% | 23.8% |
|---|
| Central China Real Estate Ltd ($832) | 31.7% | 26.7% | 28.5% | 25.1% | 15.9% |
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 (177 companies) | 5.5% | 5.4% | 6.1% | 4.7% | 3.3% |
|---|
| Central China Real Estate Ltd ($832) | 6.9% | 9.6% | 11.2% | 6.6% | 3.1% |
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 (178 companies) | 4.6% | 4.2% | 4.0% | 4.2% | 2.8% |
|---|
| Central China Real Estate Ltd ($832) | 20.5% | 13.6% | 13.0% | 12.8% | 9.9% |
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 |
| Talent Property Group Ltd ($760) | | | | | 43.0x |
| 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 |
| |
|---|
| Median (134 companies) | 2.3x | 2.3x | 2.7x | 3.0x | 3.2x |
|---|
| Central China Real Estate Ltd ($832) | 1.0x | 1.5x | 1.7x | 2.0x | 1.6x |
