Zhuguang Holdings Group Co Ltd Net Income surged on 228% in 2015 while EBITDA Margin dropped on 30.1 pp from 37.7% to 7.6%
26/04/2016 • About Zhuguang Holdings Group Co Ltd (
$1176) • By InTwits
Zhuguang Holdings Group Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zhuguang Holdings Group Co Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.6%
- EBITDA Margin is quite volatile: 7.6% in 2015, 37.7% in 2014, -19.5% in 2013, 29.3% in 2012, -33.5% in 2011
- Zhuguang Holdings Group Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 85.0%. At the same time it's a lot of higher than industry average of 57.1%.
- CAPEX is quite volatile: 15.2 in 2015, 12.7 in 2014, 1,187 in 2013, 8.6 in 2012, 0.12 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.6%
- It operates with high leverage: Net Debt/EBITDA is 10.0x while industry average is 3.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zhuguang Holdings Group Co Ltd ($1176) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 58 | 571 | 281 | 2,920 | 3,293 | 12.8% |
| Gross Profit | | 220 | 109 | 1,234 | 652 | -47.2% |
| SG&A | | 38 | 101 | 140 | 179 | 28.2% |
| EBITDA | -19 | 168 | -55 | 1,102 | 251 | -77.2% |
| Net Income | 17 | 182 | -939 | 180 | 591 | 228.2% |
Balance Sheet
|
|---|
| Cash | 394 | 138 | 997 | 3,898 | 5,661 | 45.2% |
| Short Term Debt | 66 | 839 | 1,489 | 2,585 | 3,467 | 34.1% |
| Long Term Debt | 721 | 768 | 3,058 | 6,242 | 4,703 | -24.6% |
Cash flow
|
|---|
| Capex | 0 | 9 | 1,187 | 13 | 15 | 19.8% |
Ratios
|
|---|
| Revenue growth | 637.1% | 886.5% | -50.8% | 939.4% | 12.8% | |
| EBITDA growth | 3.2% | -963.0% | -132.6% | -2,115.8% | -77.2% | |
| Gross Margin | | 38.5% | 38.9% | 42.3% | 19.8% | -22.5% |
| EBITDA Margin | -33.5% | 29.3% | -19.5% | 37.7% | 7.6% | -30.1% |
| Net Income Margin | 28.8% | 31.9% | -334.2% | 6.2% | 18.0% | 11.8% |
| SG&A, % of revenue | | 6.6% | 35.9% | 4.8% | 5.4% | 0.7% |
| CAPEX, % of revenue | 0.2% | 1.5% | 422.5% | 0.4% | 0.5% | 0.0% |
| ROIC | -1.2% | 5.0% | -0.9% | 9.1% | 1.6% | -7.4% |
| ROE | 1.6% | 10.8% | -33.5% | 5.4% | 16.4% | 11.1% |
| Net Debt/EBITDA | | 8.8x | | 4.5x | 10.0x | 5.5x |
Revenue and profitability
The company's Revenue surged on 12.8% 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 22.5 pp from 42.3% to 19.8% in 2015. SG&A as a % of Revenue increased slightly on 0.65 pp from 4.8% to 5.4% in 2015.
Net Income marign jumped on 11.8 pp from 6.2% to 18.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.46% in 2015. CAPEX/Revenue decreased slightly on 1.1 pp from 1.5% in 2012 to 0.46% in 2015. It's average level of CAPEX/Revenue for the last three years was 141%.
Return on investment
The company operates at good ROE (16.43%) while ROIC is low (1.64%). ROIC decreased on 7.4 pp from 9.1% to 1.6% in 2015. ROE jumped on 11.1 pp from 5.4% to 16.4% in 2015.
Leverage (Debt)
Debt level is 10.0x Net Debt / EBITDA and 32.6x Debt / EBITDA. Net Debt / EBITDA jumped on 5.5x from 4.5x to 10.0x in 2015. Debt decreased on 7.4% in 2015 while cash surged on 45.2% in 2015.
Appendix 1: Peers in Real Estate
Below we provide Zhuguang Holdings Group Co 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, %
| 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 (179 companies) | 29.4% | 15.8% | 14.0% | 5.2% | 4.2% |
|---|
| Zhuguang Holdings Group Co Ltd ($1176) | | 886.5% | -50.8% | 939.4% | 12.8% |
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 (160 companies) | 43.8% | 41.9% | 41.9% | 38.9% | 38.4% |
|---|
| Zhuguang Holdings Group Co Ltd ($1176) | | 38.5% | 38.9% | 42.3% | 19.8% |
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 (179 companies) | 35.5% | 28.9% | 28.4% | 26.4% | 23.5% |
|---|
| Zhuguang Holdings Group Co Ltd ($1176) | -33.5% | 29.3% | -19.5% | 37.7% | 7.6% |
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 (179 companies) | 5.9% | 5.6% | 6.1% | 4.7% | 3.3% |
|---|
| Zhuguang Holdings Group Co Ltd ($1176) | 0.2% | 1.5% | 422.5% | 0.4% | 0.5% |
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 (181 companies) | 4.6% | 4.2% | 4.2% | 4.2% | 2.7% |
|---|
| Zhuguang Holdings Group Co Ltd ($1176) | -1.2% | 5.0% | -0.9% | 9.1% | 1.6% |
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 |
| Mingfa Group International Co Ltd ($846) | 2.3x | 2.5x | 3.0x | 6.3x | 42.9x |
| Sunshine 100 China Holdings Ltd ($2608) | 19.8x | 9.9x | 12.4x | 12.9x | 42.3x |
| |
|---|
| Median (136 companies) | 2.2x | 2.2x | 2.7x | 2.9x | 3.2x |
|---|
| Zhuguang Holdings Group Co Ltd ($1176) | | 8.8x | | 4.5x | 10.0x |
