Tern Properties Co Ltd Net Income dropped on 122% while Revenue increased on 5.4%
16/06/2016 • About Tern Properties Co Ltd (
$277) • By InTwits
Tern Properties Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tern Properties Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.2%. At the same time it's in pair with industry average of 24.2%.
- CAPEX is quite volatile: 4.4 in FY2016, 1.1 in FY2015, 1.9 in FY2014, 30.5 in FY2013, 0.14 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tern Properties Co Ltd ($277) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 71.6 | 79.3 | 89.0 | 99.5 | 104.8 | 5.4% |
| Gross Profit | 69.3 | 78.0 | 87.5 | 98.2 | 103.6 | 5.5% |
| SG&A | | | | 30.4 | 29.7 | -2.1% |
| EBITDA | 73.8 | 89.5 | 69.7 | 86.5 | 79.5 | -8.1% |
| Net Income | 394.7 | 702.5 | 250.8 | 266.7 | -58.1 | -121.8% |
Balance Sheet
|
|---|
| Cash | 61.9 | 38.4 | 19.9 | 46.1 | 45.8 | -0.7% |
| Short Term Debt | 67.5 | 12.9 | 25.6 | 29.4 | 0.0 | -100.0% |
| Long Term Debt | 238.3 | 184.5 | 116.1 | 81.0 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 0.1 | 30.5 | 1.9 | 1.1 | 4.4 | 279.5% |
Ratios
|
|---|
| Revenue growth | 5.1% | 10.7% | 12.2% | 11.8% | 5.4% | |
| EBITDA growth | 30.5% | 21.3% | -22.1% | 24.0% | -8.1% | |
| Gross Margin | 96.7% | 98.4% | 98.4% | 98.7% | 98.8% | 0.1% |
| EBITDA Margin | 103.0% | 112.8% | 78.4% | 86.9% | 75.8% | -11.1% |
| Net Income Margin | 551.0% | 886.1% | 281.9% | 268.1% | -55.4% | -323.5% |
| SG&A, % of revenue | | | | 30.5% | 28.4% | -2.2% |
| CAPEX, % of revenue | 0.2% | 38.5% | 2.1% | 1.2% | 4.2% | 3.0% |
| ROIC | 2.6% | 2.7% | 1.9% | 2.2% | 2.0% | -0.2% |
| ROE | 16.4% | 23.8% | 7.4% | 7.3% | -1.6% | -8.9% |
| Net Debt/EBITDA | 3.3x | 1.8x | 1.7x | 0.7x | -0.6x | -1.3x |
Revenue and profitability
Tern Properties Co Ltd's Revenue increased on 5.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -22.6% to -15.2% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased on 2.2 pp from 30.5% to 28.4% in FY2016.
Net Income marign dropped on 324 pp from 268% to -55.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.2% in FY2016. CAPEX/Revenue dropped on 34.4 pp from 38.5% in FY2013 to 4.2% in FY2016. For the last three years the average CAPEX/Revenue was 2.5%.
Return on investment
The company operates at low but positive ROIC (2.02%) and negative ROE (-1.56%). ROIC showed almost no change in FY2016. ROE decreased on 8.9 pp from 7.3% to -1.6% in FY2016.
Leverage (Debt)
The company paid down all the debt in FY2016. Cash decreased slightly on 0.73%.
Appendix 1: Peers in Real Estate
Below we provide Tern Properties 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 | 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% | 5.2% | 4.2% | 13.3% |
|---|
| Tern Properties Co Ltd ($277) | | 10.7% | 12.2% | 11.8% | 5.4% |
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% | |
| 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% | |
| Allied Properties HK Ltd ($56) | 95.0% | 94.3% | 93.5% | 92.0% | |
| |
|---|
| Median (160 companies) | 41.9% | 41.8% | 39.1% | 38.2% | 24.8% |
|---|
| Tern Properties Co Ltd ($277) | 96.7% | 98.4% | 98.4% | 98.7% | 98.8% |
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% | 26.9% | 23.4% | 7.6% |
|---|
| Tern Properties Co Ltd ($277) | 103.0% | 112.8% | 78.4% | 86.9% | 75.8% |
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% | 6.1% | 4.8% | 3.3% | 1.4% |
|---|
| Tern Properties Co Ltd ($277) | 0.2% | 38.5% | 2.1% | 1.2% | 4.2% |
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) | 4.2% | 4.1% | 4.2% | 2.5% | 1.5% |
|---|
| Tern Properties Co Ltd ($277) | 2.6% | 2.7% | 1.9% | 2.2% | 2.0% |
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) | 2.3x | 2.8x | 3.0x | 3.3x | 4.3x |
|---|
| Tern Properties Co Ltd ($277) | 3.3x | 1.8x | 1.7x | 0.7x | -0.6x |
