Sunlight Real Estate Investment Trust reports 143 pp EBITDA Margin decline from 275% to 132% in 2016 in 2016 while 2.1% Revenue growth
05/09/2016 • About Sunlight Real Estate Investment Trust (
$435) • By InTwits
Sunlight Real Estate Investment Trust reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sunlight Real Estate Investment Trust has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 19.4 in FY2016, 23.4 in FY2015, 35.3 in FY2014, 4.6 in FY2013, 8.3 in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sunlight Real Estate Investment Trust ($435) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 581.7 | 630.2 | 688.9 | 754.5 | 770.5 | 2.1% |
| SG&A | 89.7 | 91.9 | 105.1 | 120.0 | 104.3 | -13.1% |
| EBITDA | 1,177.1 | 1,850.5 | 1,401.3 | 2,074.6 | 1,014.5 | -51.1% |
| Net Income | 1,027.3 | 1,674.6 | 1,230.1 | 1,902.7 | 825.3 | -56.6% |
Balance Sheet
|
|---|
| Cash | 1.3 | 3.1 | 35.1 | 29.1 | 485.8 | 1,570.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 10.0 | 0.0 | -100.0% |
| Long Term Debt | 3,915.9 | 3,874.8 | 3,872.3 | 3,884.1 | 3,895.9 | 0.3% |
Cash flow
|
|---|
| Capex | 8.3 | 4.6 | 35.3 | 23.4 | 19.4 | -17.1% |
Ratios
|
|---|
| Revenue growth | 9.2% | 8.3% | 9.3% | 9.5% | 2.1% | |
| EBITDA growth | -35.7% | 57.2% | -24.3% | 48.0% | -51.1% | |
| EBITDA Margin | 202.4% | 293.6% | 203.4% | 275.0% | 131.7% | -143.3% |
| Net Income Margin | 176.6% | 265.7% | 178.6% | 252.2% | 107.1% | -145.1% |
| SG&A, % of revenue | 15.4% | 14.6% | 15.3% | 15.9% | 13.5% | -2.4% |
| CAPEX, % of revenue | 1.4% | 0.7% | 5.1% | 3.1% | 2.5% | -0.6% |
| ROIC | 9.2% | 13.3% | 9.2% | 12.6% | 5.8% | -6.8% |
| ROE | 11.9% | 17.1% | 11.2% | 15.5% | 6.2% | -9.3% |
| Net Debt/EBITDA | 3.3x | 2.1x | 2.7x | 1.9x | 3.4x | 1.5x |
Revenue and profitability
Sunlight Real Estate Investment Trust's Revenue increased on 2.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.8 pp from -10.1% to -6.3% in FY2016.
SG&A as a % of Revenue decreased on 2.4 pp from 15.9% to 13.5% in FY2016.
Net Income marign dropped on 145 pp from 252% to 107% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 2.5%. The company showed small growth in CAPEX/Revenue of 1.8 pp from 0.73% in FY2013 to 2.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 3.6%.
Return on investment
The company operates at low ROIC (5.80%) and ROE (6.20%). ROIC decreased on 6.8 pp from 12.6% to 5.8% in FY2016. ROE decreased on 9.3 pp from 15.5% to 6.2% in FY2016.
Leverage (Debt)
Debt level is 3.4x Net Debt / EBITDA and 3.8x Debt / EBITDA. Net Debt / EBITDA jumped on 1.5x from 1.9x to 3.4x in FY2016. Debt showed almost no change in FY2016 while cash jumped on 1,570%.
Appendix 1: Peers in REITS
Below we provide Sunlight Real Estate Investment Trust benchmarking against other companies in REITS 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 |
|---|
| New Century Real Estate Investment Trust ($1275) | 1.2% | -41.7% | -41.7% | 16.5% | |
| Fortune Real Estate Investment Trust ($778) | 22.1% | 28.6% | 15.6% | 13.7% | |
| Yuexiu Real Estate Investment Trust ($405) | 36.4% | 92.5% | 14.6% | 8.8% | |
| Prosperity REIT ($808) | 10.8% | 10.8% | 18.0% | 8.8% | |
| Link REIT/The ($823) | | 9.7% | 10.0% | 7.9% | 13.2% |
| |
|---|
| Median (8 companies) | 13.6% | 10.3% | 14.2% | 8.3% | 13.2% |
|---|
| Sunlight Real Estate Investment Trust ($435) | | 8.3% | 9.3% | 9.5% | 2.1% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Link REIT/The ($823) | 179.0% | 340.1% | 257.8% | 362.0% | 199.4% |
| New Century Real Estate Investment Trust ($1275) | 31.3% | 33.2% | 82.5% | 77.8% | |
| Yuexiu Real Estate Investment Trust ($405) | 56.0% | 50.4% | 50.7% | 46.9% | |
| Regal Real Estate Investment Trust ($1881) | 447.8% | 73.8% | 56.7% | -118.2% | |
| |
|---|
| Median (4 companies) | 117.5% | 50.4% | 69.6% | 62.4% | 199.4% |
|---|
| Sunlight Real Estate Investment Trust ($435) | 202.4% | 293.6% | 203.4% | 275.0% | 131.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Link REIT/The ($823) | 43.9% | 13.4% | 14.0% | 107.2% | 129.0% |
| Fortune Real Estate Investment Trust ($778) | 180.5% | 400.4% | 9.4% | 99.9% | |
| Regal Real Estate Investment Trust ($1881) | 8.3% | 19.8% | 322.0% | 10.1% | |
| Prosperity REIT ($808) | 4.3% | 4.5% | 6.4% | 3.0% | |
| Yuexiu Real Estate Investment Trust ($405) | 1.8% | 0.6% | 1.4% | 2.9% | |
| |
|---|
| Median (8 companies) | 3.0% | 4.5% | 6.1% | 3.0% | 129.0% |
|---|
| Sunlight Real Estate Investment Trust ($435) | 1.4% | 0.7% | 5.1% | 3.1% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Link REIT/The ($823) | 14.8% | 25.5% | 17.7% | 22.3% | 11.6% |
| Fortune Real Estate Investment Trust ($778) | 13.6% | 16.0% | 14.0% | 8.6% | |
| Champion REIT ($2778) | 8.9% | 4.0% | 4.0% | 6.2% | |
| New Century Real Estate Investment Trust ($1275) | 6.5% | 3.0% | 4.4% | 4.8% | |
| Spring Real Estate Investment Trust ($1426) | 3.4% | 3.7% | 3.8% | 3.9% | |
| |
|---|
| Median (9 companies) | 6.5% | 3.0% | 3.8% | 3.9% | 11.6% |
|---|
| Sunlight Real Estate Investment Trust ($435) | 9.2% | 13.3% | 9.2% | 12.6% | 5.8% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Yuexiu Real Estate Investment Trust ($405) | 19.0x | 10.4x | 8.9x | 12.8x | |
| New Century Real Estate Investment Trust ($1275) | 4.3x | 6.5x | 6.1x | 8.0x | |
| Link REIT/The ($823) | 1.2x | 0.5x | 0.6x | 0.6x | 1.7x |
| |
|---|
| Median (3 companies) | 2.8x | 8.3x | 7.5x | 8.0x | 1.7x |
|---|
| Sunlight Real Estate Investment Trust ($435) | 3.3x | 2.1x | 2.7x | 1.9x | 3.4x |
