eSun Holdings Ltd Net Income dropped on 68.7% in 2016 while Revenue increased slightly on 1.2%
19/10/2016 • About eSun Holdings Ltd (
$571) • By InTwits
eSun Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- eSun Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.4%
- EBITDA Margin is quite volatile: 19.6% in FY2016, 23.0% in FY2015, 16.8% in FY2014, 12.0% in FY2013, -11.8% in FY2012
- eSun Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.9%. At the same time it's a lot of higher than industry average of 4.2%.
- CAPEX is quite volatile: 668 in FY2016, 436 in FY2015, 1,042 in FY2014, 245 in FY2013, 54.0 in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.4%
- It operates with high leverage: Net Debt/EBITDA is 4.5x 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.
eSun Holdings Ltd ($571) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 702 | 2,632 | 2,345 | 3,329 | 3,369 | 1.2% |
| Gross Profit | 255 | 781 | 921 | 1,419 | 1,378 | -2.9% |
| SG&A | | 781 | 748 | 815 | 802 | -1.6% |
| EBITDA | -83 | 316 | 393 | 766 | 662 | -13.6% |
| Net Income | 1,162 | -17 | 269 | 258 | 81 | -68.7% |
Balance Sheet
|
|---|
| Cash | 3,211 | 4,833 | 3,455 | 3,151 | 3,299 | 4.7% |
| Short Term Debt | 1,559 | 2,236 | 836 | 2,860 | 662 | -76.9% |
| Long Term Debt | 2,118 | 4,172 | 4,872 | 3,961 | 5,596 | 41.3% |
Cash flow
|
|---|
| Capex | 54 | 245 | 1,042 | 436 | 668 | 53.3% |
Ratios
|
|---|
| Revenue growth | 0.0% | 274.8% | -10.9% | 42.0% | 1.2% | |
| EBITDA growth | | -482.5% | 24.5% | 94.8% | -13.6% | |
| Gross Margin | 36.3% | 29.7% | 39.3% | 42.6% | 40.9% | -1.7% |
| EBITDA Margin | -11.8% | 12.0% | 16.8% | 23.0% | 19.6% | -3.4% |
| Net Income Margin | 165.4% | -0.7% | 11.5% | 7.8% | 2.4% | -5.4% |
| SG&A, % of revenue | | 29.7% | 31.9% | 24.5% | 23.8% | -0.7% |
| CAPEX, % of revenue | 7.7% | 9.3% | 44.4% | 13.1% | 19.8% | 6.7% |
| ROIC | | 0.2% | 0.5% | 1.8% | 1.4% | -0.4% |
| ROE | | -0.2% | 3.1% | 2.9% | 0.9% | -1.9% |
| Net Debt/EBITDA | | 5.0x | 5.7x | 4.8x | 4.5x | -0.3x |
Revenue and profitability
The company's Revenue increased slightly on 1.2%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 3.4 pp from 23.0% to 19.6% in FY2016.
Gross Margin decreased slightly on 1.7 pp from 42.6% to 40.9% in FY2016. SG&A as a % of Revenue decreased slightly on 0.68 pp from 24.5% to 23.8% in FY2016.
Net Income marign decreased on 5.4 pp from 7.8% to 2.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 19.8%. ESun Holdings Ltd showed fast CAPEX/Revenue growth of 10.5 pp from 9.3% in FY2013 to 19.8% in FY2016. Average CAPEX/Revenue for the last three years was 25.8%.The company investments to CAPEX were large: 101% of EBITDA.
Return on investment
The company operates at low ROIC (1.39%) and ROE (0.91%). ROIC showed almost no change in FY2016. ROE decreased slightly on 1.9 pp from 2.9% to 0.91% in FY2016.
Leverage (Debt)
Debt level is 4.5x Net Debt / EBITDA and 9.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 4.8x to 4.5x in FY2016. Debt decreased on 8.3% while cash increased on 4.7%.
Appendix 1: Peers in Real Estate
Below you can find eSun 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) | 17.0% | 13.1% | 5.3% | 4.2% | 5.7% |
|---|
| eSun Holdings Ltd ($571) | | 274.8% | -10.9% | 42.0% | 1.2% |
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) | 42.1% | 41.9% | 39.1% | 38.2% | 48.2% |
|---|
| eSun Holdings Ltd ($571) | 36.3% | 29.7% | 39.3% | 42.6% | 40.9% |
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) | 29.3% | 28.5% | 27.8% | 23.5% | 32.2% |
|---|
| eSun Holdings Ltd ($571) | -11.8% | 12.0% | 16.8% | 23.0% | 19.6% |
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% |
|---|
| eSun Holdings Ltd ($571) | 7.7% | 9.3% | 44.4% | 13.1% | 19.8% |
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) | 4.1% | 4.1% | 4.2% | 2.5% | 1.9% |
|---|
| eSun Holdings Ltd ($571) | | 0.2% | 0.5% | 1.8% | 1.4% |
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) | 2.4x | 2.7x | 3.0x | 3.2x | 2.3x |
|---|
| eSun Holdings Ltd ($571) | | 5.0x | 5.7x | 4.8x | 4.5x |
