Lai Sun Development Co Ltd CAPEX dropped on 73.2% while Revenue surged on 21.2%
19/10/2016 • About Lai Sun Development Co Ltd (
$488) • By InTwits
Lai Sun Development Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lai Sun Development Co Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.7%
- EBITDA Margin is quite volatile: 32.2% in FY2016, 34.5% in FY2015, 24.6% in FY2014, -2.8% in FY2013, 46.5% in FY2012
- Lai Sun Development Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 63.1%. At the same time it's in pair with industry average of 56.8%.
- CAPEX is quite volatile: 803 in FY2016, 2,996 in FY2015, 903 in FY2014, 283 in FY2013, 52.6 in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.7%
- It operates with high leverage: Net Debt/EBITDA is 9.6x while industry average is 3.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lai Sun Development Co Ltd ($488) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 875 | 964 | 2,110 | 1,542 | 1,868 | 21.2% |
| Gross Profit | 544 | 589 | 1,058 | 896 | 1,007 | 12.4% |
| SG&A | 325 | 316 | 365 | 264 | 279 | 5.5% |
| EBITDA | 407 | -27 | 518 | 532 | 602 | 13.1% |
| Net Income | 2,283 | 2,564 | 1,479 | 2,018 | 1,148 | -43.1% |
Balance Sheet
|
|---|
| Cash | 1,565 | 3,124 | 1,671 | 1,068 | 2,355 | 120.5% |
| Short Term Debt | 1,105 | 417 | 417 | 1,013 | 127 | -87.5% |
| Long Term Debt | 1,707 | 5,357 | 4,973 | 5,974 | 7,985 | 33.7% |
Cash flow
|
|---|
| Capex | 53 | 283 | 903 | 2,996 | 803 | -73.2% |
Ratios
|
|---|
| Revenue growth | -26.6% | 10.1% | 118.9% | -26.9% | 21.2% | |
| EBITDA growth | 66.2% | -106.7% | -1,998.3% | 2.6% | 13.1% | |
| Gross Margin | 62.2% | 61.1% | 50.1% | 58.1% | 53.9% | -4.2% |
| EBITDA Margin | 46.5% | -2.8% | 24.6% | 34.5% | 32.2% | -2.3% |
| Net Income Margin | 260.8% | 266.1% | 70.1% | 130.9% | 61.5% | -69.4% |
| SG&A, % of revenue | 37.1% | 32.8% | 17.3% | 17.1% | 14.9% | -2.2% |
| CAPEX, % of revenue | 6.0% | 29.4% | 42.8% | 194.3% | 43.0% | -151.4% |
| ROIC | 2.1% | -0.3% | 1.8% | 1.7% | 1.7% | 0.0% |
| ROE | 15.3% | 14.5% | 7.4% | 9.3% | 4.9% | -4.4% |
| Net Debt/EBITDA | 3.1x | | 7.2x | 11.1x | 9.6x | -1.6x |
Revenue and profitability
Lai Sun Development Co Ltd's Revenue jumped on 21.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.8 pp from 10.7% to 8.9% in FY2016.
Gross Margin decreased on 4.2 pp from 58.1% to 53.9% in FY2016. SG&A as a % of Revenue decreased on 2.2 pp from 17.1% to 14.9% in FY2016.
Net Income marign dropped on 69.4 pp from 131% to 61.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Lai Sun Development Co Ltd's CAPEX/Revenue was 43.0% in FY2016. The company's CAPEX/Revenue jumped on 13.6 pp from 29.4% in FY2013 to 43.0% in FY2016. Average CAPEX/Revenue for the last three years was 93.4%.Lai Sun Development Co Ltd has spent a lot to CAPEX (133% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (1.69%) and ROE (4.88%). ROIC showed almost no change in FY2016. ROE decreased on 4.4 pp from 9.3% to 4.9% in FY2016.
Leverage (Debt)
Debt level is 9.6x Net Debt / EBITDA and 13.5x Debt / EBITDA. Net Debt / EBITDA dropped on 1.6x from 11.1x to 9.6x in FY2016. Debt jumped on 16.1% while cash surged on 120%.
Appendix 1: Peers in Real Estate
Below you can find Lai Sun Development Co 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) | 17.0% | 13.5% | 5.2% | 4.5% | 5.1% |
|---|
| Lai Sun Development Co Ltd ($488) | | 10.1% | 118.9% | -26.9% | 21.2% |
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% | 43.8% |
|---|
| Lai Sun Development Co Ltd ($488) | 62.2% | 61.1% | 50.1% | 58.1% | 53.9% |
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% | 28.5% | 27.8% | 23.4% | 31.2% |
|---|
| Lai Sun Development Co Ltd ($488) | 46.5% | -2.8% | 24.6% | 34.5% | 32.2% |
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% |
|---|
| Lai Sun Development Co Ltd ($488) | 6.0% | 29.4% | 42.8% | 194.3% | 43.0% |
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% | 1.8% |
|---|
| Lai Sun Development Co Ltd ($488) | 2.1% | -0.3% | 1.8% | 1.7% | 1.7% |
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 | 2.7x | 3.0x | 3.2x | 2.3x |
|---|
| Lai Sun Development Co Ltd ($488) | 3.1x | | 7.2x | 11.1x | 9.6x |
