Zall Development Group Ltd reports 1,065% CAPEX growth while 48.2% Revenue decline
31/03/2016 • About Zall Development Group Ltd (
$2098) • By InTwits
Zall Development Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 213.9% in 2015 vs. 143.2% in 2014 vs. 73.6% in 2011
- EBITDA Margin is quite volatile: 213.9% in 2015, 143.2% in 2014, 133.1% in 2013, 105.3% in 2012, 73.6% in 2011
- Zall Development Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's a lot of higher than industry average of 14.1%.
- CAPEX is quite volatile: 117 in 2015, 10.0 in 2014, 4.4 in 2013, 5.3 in 2012, 4.4 in 2011
- The company has highly profitable business model: ROIC is at 12.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.8x while industry average is 3.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zall Development Group Ltd ($2098) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,454 | 1,490 | 1,581 | 1,986 | 1,029 | -48.2% |
| Gross Profit | 1,739 | 1,083 | 665 | 976 | 271 | -72.2% |
| SG&A | 153 | 225 | 356 | 322 | 295 | -8.3% |
| EBITDA | 1,805 | 1,569 | 2,104 | 2,844 | 2,203 | -22.6% |
| Net Income | 1,195 | 1,151 | 1,584 | 1,573 | 2,038 | 29.6% |
Balance Sheet
|
|---|
| Cash | 971 | 998 | 739 | 251 | 243 | -2.9% |
| Short Term Debt | 374 | 545 | 2,014 | 1,675 | 1,682 | 0.4% |
| Long Term Debt | 1,004 | 2,427 | 3,692 | 3,425 | 4,713 | 37.6% |
Cash flow
|
|---|
| Capex | 4 | 5 | 4 | 10 | 117 | 1,064.8% |
Ratios
|
|---|
| Revenue growth | 218.8% | -39.3% | 6.1% | 25.6% | -48.2% | |
| EBITDA growth | 94.3% | -13.1% | 34.1% | 35.2% | -22.6% | |
| Gross Margin | 70.9% | 72.7% | 42.0% | 49.1% | 26.3% | -22.8% |
| EBITDA Margin | 73.6% | 105.3% | 133.1% | 143.2% | 213.9% | 70.7% |
| Net Income Margin | 48.7% | 77.2% | 100.2% | 79.2% | 197.9% | 118.7% |
| SG&A, % of revenue | 6.3% | 15.1% | 22.5% | 16.2% | 28.6% | 12.4% |
| CAPEX, % of revenue | 0.2% | 0.4% | 0.3% | 0.5% | 11.3% | 10.8% |
| ROIC | 39.0% | 19.2% | 17.6% | 18.7% | 12.2% | -6.5% |
| ROE | 43.0% | 26.5% | 28.3% | 22.1% | 23.4% | 1.3% |
| Net Debt/EBITDA | 0.2x | 1.3x | 2.4x | 1.7x | 2.8x | 1.1x |
Revenue and profitability
Zall Development Group Ltd's Revenue dropped on 48.2% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 70.7 pp from 143% to 214% in 2015.
Gross Margin dropped on 22.8 pp from 49.1% to 26.3% in 2015. SG&A as a % of Revenue jumped on 12.4 pp from 16.2% to 28.6% in 2015.
Net Income marign surged on 119 pp from 79.2% to 198% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 11.3%. CAPEX/Revenue jumped on 11.0 pp from 0.36% in 2012 to 11.3% in 2015. It's average level of CAPEX/Revenue for the last three years was 4.0%.
Return on investment
The company operates at high and attractive ROE (23.44%) while ROIC is a bit lower (12.18%). ROIC decreased on 6.5 pp from 18.7% to 12.2% in 2015. ROE increased slightly on 1.3 pp from 22.1% to 23.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.8x and Debt / EBITDA is 2.9x. Net Debt / EBITDA jumped on 1.1x from 1.7x to 2.8x in 2015. Debt surged on 25.4% in 2015 while cash decreased on 2.9% in 2015.
Appendix 1: Peers in Real Estate
Below you can find Zall Development 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% | 5.2% | 4.7% |
|---|
| Zall Development Group Ltd ($2098) | | -39.3% | 6.1% | 25.6% | -48.2% |
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) | 43.7% | 41.8% | 41.1% | 38.9% | 38.9% |
|---|
| Zall Development Group Ltd ($2098) | 70.9% | 72.7% | 42.0% | 49.1% | 26.3% |
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 (176 companies) | 35.4% | 28.9% | 28.3% | 26.4% | 23.5% |
|---|
| Zall Development Group Ltd ($2098) | 73.6% | 105.3% | 133.1% | 143.2% | 213.9% |
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) | 5.9% | 5.6% | 6.1% | 4.7% | 3.2% |
|---|
| Zall Development Group Ltd ($2098) | 0.2% | 0.4% | 0.3% | 0.5% | 11.3% |
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% |
|---|
| Zall Development Group Ltd ($2098) | 39.0% | 19.2% | 17.6% | 18.7% | 12.2% |
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 |
|---|
| Zall Development Group Ltd ($2098) | 0.2x | 1.3x | 2.4x | 1.7x | 2.8x |
