Capital Estate Ltd revenue dropped on 23.5% and EBITDA Margin dropped on 84.7 pp from -0.22% to -84.9%
25/10/2016 • About Capital Estate Ltd (
$193) • By InTwits
Capital Estate Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Capital Estate Ltd is a company in decline: FY2016 revenue growth was -23.5%, 5 years revenue CAGR was -7.7%
- The company operates at negative EBITDA Margin: -84.9%
- Capital Estate Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -16.1%0
- Capital Estate Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's a lot of higher than industry average of 22.1%.
- CAPEX is quite volatile: 0.22 in FY2016, 0.54 in FY2015, 2.8 in FY2014, 12.0 in FY2013, 29.2 in FY2012
- The company has unprofitable business model: ROIC is at -10.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Capital Estate Ltd ($193) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 142.9 | 140.8 | 133.3 | 115.7 | 88.5 | -23.5% |
| Gross Profit | 59.6 | 54.4 | 46.8 | 44.2 | 34.8 | -21.3% |
| SG&A | | 63.9 | 69.4 | 64.0 | 54.6 | -14.7% |
| EBITDA | -7.2 | -0.6 | -17.1 | -0.3 | -75.1 | |
| Net Income | -120.3 | -161.9 | -55.5 | -52.6 | -133.6 | |
Balance Sheet
|
|---|
| Cash | 26.0 | 115.5 | 42.6 | 201.7 | 73.5 | -63.6% |
| Short Term Debt | 25.5 | 121.2 | 12.0 | 0.0 | 0.0 | |
| Long Term Debt | 115.3 | 0.0 | 0.0 | 0.0 | 100.0 | |
Cash flow
|
|---|
| Capex | 29.2 | 12.0 | 2.8 | 0.5 | 0.2 | -59.3% |
Ratios
|
|---|
| Revenue growth | 7.9% | -1.5% | -5.3% | -13.2% | -23.5% | |
| EBITDA growth | -153.5% | -91.6% | 2,691.3% | -98.5% | 29,131.5% | |
| Gross Margin | 41.7% | 38.6% | 35.1% | 38.2% | 39.3% | 1.1% |
| EBITDA Margin | -5.1% | -0.4% | -12.8% | -0.2% | -84.9% | -84.7% |
| Net Income Margin | -84.2% | -115.0% | -41.7% | -45.4% | -150.9% | -105.5% |
| SG&A, % of revenue | | 45.4% | 52.1% | 55.3% | 61.7% | 6.4% |
| CAPEX, % of revenue | 20.5% | 8.5% | 2.1% | 0.5% | 0.2% | -0.2% |
| ROIC | -3.8% | -3.0% | -5.1% | -3.2% | -10.9% | -7.7% |
| ROE | -12.2% | -18.5% | -7.0% | -6.1% | -15.5% | -9.3% |
Revenue and profitability
The company's Revenue dropped on 23.5%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 84.7 pp from -0.22% to -84.9% in FY2016.
Gross Margin increased slightly on 1.1 pp from 38.2% to 39.3% in FY2016. SG&A as a % of Revenue increased on 6.4 pp from 55.3% to 61.7% in FY2016.
Net Income marign dropped on 106 pp from -45.4% to -151% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.25%. The company showed decline in CAPEX/Revenue of 8.3 pp from 8.5% in FY2013 to 0.25% in FY2016. It's average level of CAPEX/Revenue for the last three years was 0.93%.
Return on investment
The company operates at negative ROIC (-10.92%) and ROE (-15.47%). ROIC decreased on 7.7 pp from -3.2% to -10.9% in FY2016. ROE decreased on 9.3 pp from -6.1% to -15.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt surged while cash dropped on 63.6%.
Appendix 1: Peers in Real Estate
Below we provide Capital Estate Ltd benchmarking against other companies in Real Estate 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 |
|---|
| 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) | 17.3% | 13.5% | 5.3% | 4.5% | 5.7% |
|---|
| Capital Estate Ltd ($193) | | -1.5% | -5.3% | -13.2% | -23.5% |
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% | 39.3% | 38.4% | 48.2% |
|---|
| Capital Estate Ltd ($193) | 41.7% | 38.6% | 35.1% | 38.2% | 39.3% |
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% | 31.2% |
|---|
| Capital Estate Ltd ($193) | -5.1% | -0.4% | -12.8% | -0.2% | -84.9% |
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% | 4.8% | 3.3% | 1.9% |
|---|
| Capital Estate Ltd ($193) | 20.5% | 8.5% | 2.1% | 0.5% | 0.2% |
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% | 1.7% |
|---|
| Capital Estate Ltd ($193) | -3.8% | -3.0% | -5.1% | -3.2% | -10.9% |
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 | 3.1x |
|---|
