Sino Hotels Holdings Ltd reports 22.7% EBITDA decline in 2016 and 7.5% Revenue decline
24/08/2016 • About Sino Hotels Holdings Ltd (
$1221) • By InTwits
Sino Hotels Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sino Hotels Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.3%
- EBITDA Margin is declining: 33.1% in FY2016 vs. 39.6% in FY2015 vs. 46.5% in FY2012
- Sino Hotels Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.5%. At the same time it's in pair with industry average of 8.1%.
- CAPEX is quite volatile: 17.7 in FY2016, 22.0 in FY2015, 18.0 in FY2014, 7.3 in FY2013, 7.0 in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sino Hotels Holdings Ltd ($1221) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 339.4 | 331.4 | 328.9 | 317.4 | 293.6 | -7.5% |
| Gross Profit | 242.0 | 233.4 | 226.7 | 208.7 | 182.0 | -12.8% |
| SG&A | | 37.5 | 39.1 | 41.1 | 44.1 | 7.4% |
| EBITDA | 157.9 | 152.2 | 141.7 | 125.7 | 97.2 | -22.7% |
| Net Income | 235.0 | 240.8 | 234.5 | 204.0 | 165.5 | -18.8% |
Balance Sheet
|
|---|
| Cash | 24.6 | 188.7 | 428.6 | 673.3 | 820.9 | 21.9% |
| Short Term Debt | 40.7 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.8 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 7.0 | 7.3 | 18.0 | 22.0 | 17.7 | -19.6% |
Ratios
|
|---|
| Revenue growth | 19.4% | -2.4% | -0.8% | -3.5% | -7.5% | |
| EBITDA growth | 29.8% | -3.6% | -6.9% | -11.3% | -22.7% | |
| Gross Margin | 71.3% | 70.4% | 68.9% | 65.8% | 62.0% | -3.8% |
| EBITDA Margin | 46.5% | 45.9% | 43.1% | 39.6% | 33.1% | -6.5% |
| Net Income Margin | 69.2% | 72.7% | 71.3% | 64.3% | 56.4% | -7.9% |
| SG&A, % of revenue | | 11.3% | 11.9% | 13.0% | 15.0% | 2.1% |
| CAPEX, % of revenue | 2.1% | 2.2% | 5.5% | 6.9% | 6.0% | -0.9% |
| ROIC | 3.2% | 3.0% | 2.7% | 2.1% | 1.3% | -0.8% |
| ROE | 7.0% | 6.8% | 6.2% | 5.2% | 4.1% | -1.1% |
| Net Debt/EBITDA | 0.1x | -1.2x | -3.0x | -5.4x | -8.4x | -3.1x |
Revenue and profitability
The company's Revenue decreased on 7.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from -8.9% to -5.0% in FY2016.
Gross Margin decreased on 3.8 pp from 65.8% to 62.0% in FY2016. SG&A as a % of Revenue increased on 2.1 pp from 13.0% to 15.0% in FY2016.
Net Income marign decreased on 7.9 pp from 64.3% to 56.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Sino Hotels Holdings Ltd had CAPEX/Revenue of 6.0%. CAPEX/Revenue increased on 3.8 pp from 2.2% in FY2013 to 6.0% in FY2016. Average CAPEX/Revenue for the last three years was 6.1%.
Return on investment
The company operates at low ROIC (1.28%) and ROE (4.12%). ROIC decreased slightly on 0.80 pp from 2.1% to 1.3% in FY2016. ROE decreased slightly on 1.1 pp from 5.2% to 4.1% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 21.9%.
Appendix 1: Peers in Lodging
Below you can find Sino Hotels Holdings Ltd benchmarking vs. other companies in Lodging 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 |
|---|
| China New City Commercial Development Ltd ($1321) | -16.9% | 433.0% | -76.2% | 141.3% | |
| Zhuhai Holdings Investment Group Ltd ($908) | 229.8% | 14.5% | 57.0% | 76.3% | |
| Shanghai Jin Jiang International Hotels Group Co Ltd ($2006) | -28.8% | 3.2% | 0.8% | 29.9% | |
| Century City International Holdings Ltd ($355) | 283.6% | 108.7% | -35.8% | 25.9% | |
| Far East Consortium International Ltd/HK ($35) | | 111.9% | 9.0% | 25.7% | -21.8% |
| |
|---|
| Median (23 companies) | 9.8% | 13.8% | 0.8% | -10.2% | -9.3% |
|---|
| Sino Hotels Holdings Ltd ($1221) | | -2.4% | -0.8% | -3.5% | -7.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.5% | |
| Wynn Macau Ltd ($1128) | 97.9% | 98.3% | 98.5% | 98.4% | |
| Emperor Entertainment Hotel Ltd ($296) | 77.1% | 75.6% | 76.8% | 70.9% | 65.5% |
| Asia Standard Hotel Group Ltd ($292) | 60.7% | 73.4% | 72.1% | 67.6% | 65.8% |
| NagaCorp Ltd ($3918) | 72.9% | 72.1% | 67.4% | 65.1% | |
| |
|---|
| Median (17 companies) | 55.7% | 46.3% | 51.3% | 45.4% | 54.9% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 71.3% | 70.4% | 68.9% | 65.8% | 62.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NagaCorp Ltd ($3918) | 49.8% | 50.1% | 42.8% | 45.3% | |
| Emperor Entertainment Hotel Ltd ($296) | 44.9% | 46.4% | 46.9% | 43.1% | 36.2% |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 41.2% | 40.5% | 25.8% | 41.5% | |
| Asia Standard Hotel Group Ltd ($292) | -23.9% | 65.2% | 49.9% | 40.4% | 17.8% |
| Far East Consortium International Ltd/HK ($35) | 57.2% | 34.5% | 43.0% | 36.4% | 37.3% |
| |
|---|
| Median (23 companies) | 26.7% | 26.4% | 25.8% | 22.6% | 28.7% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 46.5% | 45.9% | 43.1% | 39.6% | 33.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Macau Legend Development Ltd ($1680) | 5.0% | 24.2% | 73.0% | 68.5% | |
| Wynn Macau Ltd ($1128) | 5.2% | 11.0% | 28.2% | 66.6% | |
| Legend Strategy International Holdings Group Co Ltd ($1355) | 17.0% | 38.0% | 1.2% | 62.6% | |
| Century City International Holdings Ltd ($355) | 21.2% | 32.9% | 13.4% | 35.8% | |
| Shangri-La Asia Ltd ($69) | 48.5% | 33.1% | 41.2% | 34.3% | |
| |
|---|
| Median (23 companies) | 7.4% | 11.0% | 13.2% | 14.5% | 10.3% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 2.1% | 2.2% | 5.5% | 6.9% | 6.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NagaCorp Ltd ($3918) | 30.6% | 28.9% | 22.6% | 28.6% | |
| MGM China Holdings Ltd ($2282) | 46.2% | 53.8% | 54.5% | 24.0% | |
| Sands China Ltd ($1928) | 14.2% | 24.4% | 26.7% | 15.8% | |
| Emperor Entertainment Hotel Ltd ($296) | 22.2% | 21.1% | 18.4% | 12.0% | 7.5% |
| Galaxy Entertainment Group Ltd ($27) | 25.2% | 30.0% | 27.5% | 10.2% | |
| |
|---|
| Median (23 companies) | 7.6% | 5.7% | 3.9% | 3.9% | 4.0% |
|---|
| Sino Hotels Holdings Ltd ($1221) | 3.2% | 3.0% | 2.7% | 2.1% | 1.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China New City Commercial Development Ltd ($1321) | 26.0x | 7.9x | | 100.1x | |
| Century City International Holdings Ltd ($355) | 6.5x | 9.3x | 11.2x | 12.3x | |
| Regal Hotels International Holdings Ltd ($78) | 5.0x | 8.7x | 11.8x | 11.1x | |
| Shangri-La Asia Ltd ($69) | 6.0x | 6.8x | 6.9x | 9.8x | |
| Macau Legend Development Ltd ($1680) | 2.2x | 0.6x | 0.2x | 7.1x | |
| |
|---|
| Median (21 companies) | 1.2x | 0.8x | 1.0x | 4.0x | 5.2x |
|---|
| Sino Hotels Holdings Ltd ($1221) | 0.1x | -1.2x | -3.0x | -5.4x | -8.4x |
