Cheuk Nang Holdings Ltd reports 30.8% Net Income growth in 2016 while 12.7% Revenue decline
28/09/2016 • About Cheuk Nang Holdings Ltd (
$131) • By InTwits
Cheuk Nang Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cheuk Nang Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -0.5%
- The company operates at negative EBITDA Margin: -67.9%
- Cheuk Nang Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -17.4% for the sames years0
- Cheuk Nang Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 107.0%. At the same time it's a lot of higher than industry average of 58.4%.
- CAPEX is quite volatile: 53.9 in FY2016, 76.1 in FY2015, 33.6 in FY2014, 68.8 in FY2013, 28.1 in FY2012
- The company has unprofitable business model: ROIC is at -0.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cheuk Nang Holdings Ltd ($131) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 37.571 | 52.763 | 49.763 | 52.473 | 45.806 | -12.7% |
| Gross Profit | 20.730 | 31.757 | 29.983 | 32.590 | 25.463 | -21.9% |
| SG&A | | | | 47.433 | 59.085 | 24.6% |
| EBITDA | -10.312 | 8.174 | 2.081 | -10.342 | -31.121 | |
| Net Income | 157.677 | 106.286 | 395.232 | 241.028 | 315.348 | 30.8% |
Balance Sheet
|
|---|
| Cash | 205.521 | 78.187 | 99.658 | 73.122 | 1,032.612 | 1,312.2% |
| Short Term Debt | 858.577 | 715.968 | 1,680.461 | 1,809.474 | 417.655 | -76.9% |
| Long Term Debt | 412.024 | 811.468 | 295.580 | 26.404 | 652.119 | 2,369.8% |
Cash flow
|
|---|
| Capex | 28.050 | 68.765 | 33.582 | 76.058 | 53.867 | -29.2% |
Ratios
|
|---|
| Revenue growth | -7.2% | 40.4% | -5.7% | 5.4% | -12.7% | |
| EBITDA growth | -164.0% | -179.3% | -74.5% | -597.0% | 200.9% | |
| Gross Margin | 55.2% | 60.2% | 60.3% | 62.1% | 55.6% | -6.5% |
| EBITDA Margin | -27.4% | 15.5% | 4.2% | -19.7% | -67.9% | -48.2% |
| Net Income Margin | 419.7% | 201.4% | 794.2% | 459.3% | 688.4% | 229.1% |
| SG&A, % of revenue | | | | 90.4% | 129.0% | 38.6% |
| CAPEX, % of revenue | 74.7% | 130.3% | 67.5% | 144.9% | 117.6% | -27.3% |
| ROIC | -0.3% | 0.1% | -0.0% | -0.2% | -0.5% | -0.3% |
| ROE | 3.9% | 2.5% | 8.8% | 5.0% | 6.2% | 1.2% |
| Net Debt/EBITDA | | 177.3x | 901.7x | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 12.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 44.8 pp from 44.2% to 89.0% in FY2016.
Gross Margin decreased on 6.5 pp from 62.1% to 55.6% in FY2016. SG&A as a % of Revenue surged on 38.6 pp from 90.4% to 129% in FY2016.
Net Income marign jumped on 229 pp from 459% to 688% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Cheuk Nang Holdings Ltd's CAPEX/Revenue was 118% in FY2016. The company showed big decline in CAPEX/Revenue of 12.7 pp from 130% in FY2013 to 118% in FY2016. For the last three years the average CAPEX/Revenue was 110%.
Return on investment
The company operates at negative ROIC (-0.47%) and low but positive ROE (6.23%). ROIC showed almost no change in FY2016. ROE increased slightly on 1.2 pp from 5.0% to 6.2% in FY2016.
Leverage (Debt)
Debt level is -3.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 41.7% while cash jumped on 1,312%.
Appendix 1: Peers in Real Estate
Below you can find Cheuk Nang 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) | | -95.2% | 75.7% | 678.6% | 206.4% |
| |
|---|
| Median (179 companies) | 16.1% | 13.1% | 5.3% | 4.2% | 5.1% |
|---|
| Cheuk Nang Holdings Ltd ($131) | | 40.4% | -5.7% | 5.4% | -12.7% |
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% | 92.9% |
| Soundwill Holdings Ltd ($878) | 53.1% | 74.5% | 46.9% | 95.7% | |
| |
|---|
| Median (160 companies) | 41.9% | 41.8% | 39.1% | 38.2% | 43.5% |
|---|
| Cheuk Nang Holdings Ltd ($131) | 55.2% | 60.2% | 60.3% | 62.1% | 55.6% |
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) | 29.3% | 28.5% | 27.8% | 23.5% | 32.8% |
|---|
| Cheuk Nang Holdings Ltd ($131) | -27.4% | 15.5% | 4.2% | -19.7% | -67.9% |
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% | 28.1% |
| |
|---|
| Median (179 companies) | 5.6% | 6.1% | 4.7% | 3.2% | 1.7% |
|---|
| Cheuk Nang Holdings Ltd ($131) | 74.7% | 130.3% | 67.5% | 144.9% | 117.6% |
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% | 2.2% |
|---|
| Cheuk Nang Holdings Ltd ($131) | -0.3% | 0.1% | -0.0% | -0.2% | -0.5% |
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 (137 companies) | 2.4x | 2.7x | 3.0x | 3.2x | 2.0x |
|---|
