TAI Cheung Holdings Ltd reports 85.7% EBITDA decline in 2016 while 29.5% Revenue growth
16/06/2016 • About TAI Cheung Holdings Ltd (
$88) • By InTwits
TAI Cheung Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TAI Cheung Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is 0.2%
- EBITDA Margin is quite volatile: 2.9% in FY2016, 25.8% in FY2015, 6.3% in FY2014, 49.8% in FY2013, 49.5% in FY2012
- TAI Cheung Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.2%. At the same time it's a lot of higher than industry average of 33.1%.
- CAPEX is quite volatile: 0.80 in FY2016, 96.9 in FY2015, 29.5 in FY2014, 0.10 in FY2013, 0.10 in FY2012
- The company has potentially unprofitable business model: ROIC is at 0.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TAI Cheung Holdings Ltd ($88) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,382 | 992 | 100 | 454 | 589 | 29.5% |
| Gross Profit | 739 | 535 | 53 | 167 | 70 | -57.8% |
| SG&A | | | | 50 | 54 | 8.6% |
| EBITDA | 684 | 494 | 6 | 117 | 17 | -85.7% |
| Net Income | 738 | 566 | 1,013 | 554 | 226 | -59.1% |
Balance Sheet
|
|---|
| Cash | 3,028 | 2,173 | 2,133 | 2,321 | 2,755 | 18.7% |
| Short Term Debt | 119 | 113 | 107 | 104 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 128 | |
Cash flow
|
|---|
| Capex | 0 | 0 | 30 | 97 | 1 | -99.2% |
Ratios
|
|---|
| Revenue growth | -5.4% | -28.2% | -89.9% | 352.6% | 29.5% | |
| EBITDA growth | -4.8% | -27.8% | -98.7% | 1,761.9% | -85.7% | |
| Gross Margin | 53.5% | 54.0% | 52.6% | 36.7% | 11.9% | -24.7% |
| EBITDA Margin | 49.5% | 49.8% | 6.3% | 25.8% | 2.9% | -23.0% |
| Net Income Margin | 53.4% | 57.0% | 1,008.5% | 121.9% | 38.4% | -83.4% |
| SG&A, % of revenue | | | | 11.0% | 9.2% | -1.8% |
| CAPEX, % of revenue | 0.0% | 0.0% | 29.4% | 21.3% | 0.1% | -21.2% |
| ROIC | 13.1% | 8.7% | 0.1% | 1.7% | 0.2% | -1.4% |
| ROE | 14.7% | 10.3% | 16.5% | 8.2% | 3.3% | -5.0% |
| Net Debt/EBITDA | -4.3x | -4.2x | -321.6x | -18.9x | -156.4x | -137.5x |
Revenue and profitability
TAI Cheung Holdings Ltd's Revenue surged on 29.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 82.0 pp from -63.6% to 18.4% in FY2016.
Gross Margin dropped on 24.7 pp from 36.7% to 11.9% in FY2016. SG&A as a % of Revenue decreased slightly on 1.8 pp from 11.0% to 9.2% in FY2016.
Net Income marign dropped on 83.4 pp from 122% to 38.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.14%. TAI Cheung Holdings Ltd showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 16.9%.
Return on investment
The company operates at low ROIC (0.22%) and ROE (3.26%). ROIC decreased slightly on 1.4 pp from 1.7% to 0.22% in FY2016. ROE decreased on 5.0 pp from 8.2% to 3.3% in FY2016.
Leverage (Debt)
Debt level is -156.4x Net Debt / EBITDA and 7.6x Debt / EBITDA. Net Debt / EBITDA dropped on 137.5x from -18.9x to -156.4x in FY2016. Debt jumped on 22.6% while cash surged on 18.7%.
Appendix 1: Peers in Real Estate
Below you can find TAI Cheung 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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) | 16.1% | 13.5% | 5.3% | 4.2% | 5.4% |
|---|
| TAI Cheung Holdings Ltd ($88) | | -28.2% | -89.9% | 352.6% | 29.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 79.0% | 95.2% | 97.9% | 99.9% | |
| Tern Properties Co Ltd ($277) | 96.7% | 98.4% | 98.4% | 98.7% | 98.8% |
| YT Realty Group Ltd ($75) | 94.4% | 96.6% | 96.7% | 97.6% | |
| Wah Ha Realty Co Ltd ($278) | 96.3% | 96.0% | 93.2% | 95.9% | |
| Soundwill Holdings Ltd ($878) | 53.1% | 74.5% | 46.9% | 95.7% | |
| |
|---|
| Median (160 companies) | 41.9% | 41.8% | 39.1% | 38.4% | 28.8% |
|---|
| TAI Cheung Holdings Ltd ($88) | 53.5% | 54.0% | 52.6% | 36.7% | 11.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chinese Estates Holdings Ltd ($127) | 356.2% | 91.6% | 195.5% | 397.4% | |
| Zall Development Group Ltd ($2098) | 105.3% | 133.1% | 143.2% | 213.9% | |
| SOHO China Ltd ($410) | 113.6% | 80.8% | 104.0% | 201.9% | |
| Beijing Properties Holdings Ltd ($925) | -606.3% | 2,162.6% | 224.3% | 186.5% | |
| Swire Properties Ltd ($1972) | 154.5% | 114.6% | 73.2% | 100.3% | |
| |
|---|
| Median (179 companies) | 28.9% | 28.3% | 27.8% | 23.4% | 12.1% |
|---|
| TAI Cheung Holdings Ltd ($88) | 49.5% | 49.8% | 6.3% | 25.8% | 2.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| LT Commercial Real Estate Ltd ($112) | 0.0% | 18.0% | 27,965.5% | 4,834.8% | |
| China Oceanwide Holdings Ltd ($715) | 0.8% | 0.3% | 2.0% | 880.6% | |
| Madex International Holdings Ltd ($231) | 174.5% | 519.7% | 205.3% | 350.6% | |
| Pacific Century Premium Developments Ltd ($432) | 2.9% | 323.1% | 351.2% | 340.6% | |
| Hon Kwok Land Investment Co Ltd ($160) | 20.6% | 157.3% | 144.5% | 296.3% | |
| |
|---|
| Median (179 companies) | 5.9% | 6.2% | 4.7% | 3.2% | 2.1% |
|---|
| TAI Cheung Holdings Ltd ($88) | 0.0% | 0.0% | 29.4% | 21.3% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hydoo International Holding Ltd ($1396) | 44.3% | 62.0% | 12.9% | 16.6% | |
| Gemdale Properties & Investment Corp Ltd ($535) | 15.3% | 19.6% | 10.8% | 15.9% | |
| China Overseas Land & Investment Ltd ($688) | | 15.1% | 18.5% | 15.4% | 13.0% |
| 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) | 4.0% | 4.0% | 4.2% | 2.5% | 1.6% |
|---|
| TAI Cheung Holdings Ltd ($88) | 13.1% | 8.7% | 0.1% | 1.7% | 0.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shui On Land Ltd ($272) | 22.1x | 13.2x | 17.1x | 54.2x | |
| Beijing Capital Land Ltd ($2868) | 7.1x | 4.6x | 11.7x | 49.1x | |
| Talent Property Group Ltd ($760) | | | | 43.0x | |
| Mingfa Group International Co Ltd ($846) | 2.5x | 3.0x | 6.3x | 42.9x | |
| Sunshine 100 China Holdings Ltd ($2608) | 9.9x | 12.4x | 12.9x | 42.3x | |
| |
|---|
| Median (136 companies) | 2.4x | 2.8x | 3.0x | 3.3x | 4.3x |
|---|
| TAI Cheung Holdings Ltd ($88) | -4.3x | -4.2x | -321.6x | -18.9x | -156.4x |
