SRE Group Ltd reports 12,620% EBITDA decline while 22.4% Revenue growth
31/03/2016 • About SRE Group Ltd (
$1207) • By InTwits
SRE Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SRE Group Ltd doesn't have a profitable business model yet: 2015 ROIC is -7.6%
- EBITDA Margin is declining: -114.1% in 2015 vs. 1.1% in 2014 vs. 22.1% in 2011
- SRE Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.7%. At the same time it's a lot of higher than industry average of 4.4%.
- CAPEX is quite volatile: 46.2 in 2015, 314 in 2014, 288 in 2013, 173 in 2012, 889 in 2011
- The company has unprofitable business model: ROIC is at -7.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SRE Group Ltd ($1207) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,871 | 3,343 | 3,344 | 1,440 | 1,763 | 22.4% |
| Gross Profit | 1,408 | 900 | 956 | 307 | -1,357 | -542.6% |
| SG&A | 300 | 315 | 345 | 347 | 709 | 103.9% |
| EBITDA | 1,296 | 739 | 574 | 16 | -2,011 | -12,620.3% |
| Net Income | 497 | 367 | 200 | -106 | -2,364 | 2,131.6% |
Balance Sheet
|
|---|
| Cash | 1,356 | 1,253 | 1,382 | 572 | 1,708 | 198.5% |
| Short Term Debt | 4,280 | 4,965 | 5,331 | 7,229 | 8,422 | 16.5% |
| Long Term Debt | 10,760 | 6,678 | 10,234 | 12,365 | 2,497 | -79.8% |
Cash flow
|
|---|
| Capex | 889 | 173 | 288 | 314 | 46 | -85.3% |
Ratios
|
|---|
| Revenue growth | -6.6% | -43.1% | 0.0% | -56.9% | 22.4% | |
| EBITDA growth | -35.4% | -43.0% | -22.3% | -97.2% | -12,620.3% | |
| Gross Margin | 24.0% | 26.9% | 28.6% | 21.3% | -77.0% | -98.3% |
| EBITDA Margin | 22.1% | 22.1% | 17.2% | 1.1% | -114.1% | -115.2% |
| Net Income Margin | 8.5% | 11.0% | 6.0% | -7.4% | -134.2% | -126.8% |
| SG&A, % of revenue | 5.1% | 9.4% | 10.3% | 24.1% | 40.2% | 16.1% |
| CAPEX, % of revenue | 15.1% | 5.2% | 8.6% | 21.8% | 2.6% | -19.2% |
| ROIC | 3.7% | 2.1% | 2.0% | -0.1% | -7.6% | -7.5% |
| ROE | 5.2% | 3.8% | 2.2% | -1.2% | -28.4% | -27.2% |
| Net Debt/EBITDA | 10.6x | 14.1x | 24.7x | 1,184.6x | | -1,184.6x |
Revenue and profitability
SRE Group Ltd's Revenue jumped on 22.4% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 115 pp from 1.1% to -114% in 2015.
Gross Margin dropped on 98.3 pp from 21.3% to -77.0% in 2015. SG&A as a % of Revenue jumped on 16.1 pp from 24.1% to 40.2% in 2015.
Net Income marign dropped on 127 pp from -7.4% to -134% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.6%. CAPEX/Revenue decreased on 2.5 pp from 5.2% in 2012 to 2.6% in 2015. Average CAPEX/Revenue for the last three years was 11.0%.
Return on investment
The company operates at negative ROIC (-7.61%) and ROE (-28.35%). ROIC decreased on 7.5 pp from -0.11% to -7.6% in 2015. ROE dropped on 27.2 pp from -1.2% to -28.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -5.7x and Debt / EBITDA is . Net Debt / EBITDA dropped on 1,184.6x from 1,184.6x to in 2015. Debt dropped on 44.3% in 2015 while cash surged on 198% in 2015.
Appendix 1: Peers in Real Estate
Below you can find SRE 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% |
| 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% | 5.4% | 4.3% |
|---|
| SRE Group Ltd ($1207) | | -43.1% | 0.0% | -56.9% | 22.4% |
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% |
|---|
| SRE Group Ltd ($1207) | 24.0% | 26.9% | 28.6% | 21.3% | -77.0% |
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% | 28.4% | 27.3% | 23.8% |
|---|
| SRE Group Ltd ($1207) | 22.1% | 22.1% | 17.2% | 1.1% | -114.1% |
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% | 5.6% | 6.1% | 4.7% | 3.3% |
|---|
| SRE Group Ltd ($1207) | 15.1% | 5.2% | 8.6% | 21.8% | 2.6% |
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% | 4.2% | 4.3% | 2.9% |
|---|
| SRE Group Ltd ($1207) | 3.7% | 2.1% | 2.0% | -0.1% | -7.6% |
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 (135 companies) | 2.1x | 2.2x | 2.7x | 2.9x | 3.2x |
|---|
