Fortune Real Estate Investment Trust reports 49.4% Net Income decline in 2016 while 5.0% Revenue growth
26/01/2017 • About Fortune Real Estate Investment Trust (
$778) • By InTwits
Fortune Real Estate Investment Trust reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Fortune Real Estate Investment Trust has high CAPEX intensity: 5 year average CAPEX/Revenue was 138.8%. At the same time it's a lot of higher than industry average of 17.3%.
- CAPEX is quite volatile: 73.0 in 2016, 1,881 in 2015, 156 in 2014, 5,735 in 2013, 2,010 in 2012
- The company has potentially unprofitable business model: ROIC is at 4.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Fortune Real Estate Investment Trust ($778) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,114 | 1,432 | 1,656 | 1,882 | 1,975 | 5.0% |
| Net Income | 2,238 | 3,649 | 3,931 | 2,486 | 1,258 | -49.4% |
Balance Sheet
|
|---|
| Cash | 578 | 858 | 688 | 710 | 585 | -17.6% |
| Short Term Debt | 940 | 970 | 940 | 3,780 | 630 | -83.3% |
| Long Term Debt | 3,879 | 8,860 | 8,881 | 7,229 | 10,230 | 41.5% |
Cash flow
|
|---|
| Capex | 2,010 | 5,735 | 156 | 1,881 | 73 | -96.1% |
Ratios
|
|---|
| Revenue growth | 22.1% | 28.6% | 15.6% | 13.7% | 5.0% | |
| Net Income Margin | 201.0% | 254.8% | 237.4% | 132.1% | 63.7% | -68.4% |
| CAPEX, % of revenue | 180.5% | 400.4% | 9.4% | 99.9% | 3.7% | -96.2% |
| ROIC | 13.6% | 16.0% | 14.0% | 8.6% | 4.6% | -4.0% |
| ROE | 15.9% | 21.4% | 19.0% | 10.7% | 5.2% | -5.5% |
Revenue and profitability
The company's Revenue increased on 5.0%.
Net Income marign dropped on 68.4 pp from 132% to 63.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
Fortune Real Estate Investment Trust's CAPEX/Revenue was 3.7% in 2016. CAPEX/Revenue dropped on 397 pp from 400% in 2013 to 3.7% in 2016. It's average CAPEX/Revenue for the last three years was 37.7%.
Return on investment
The company operates at low ROIC (4.65%) and ROE (5.17%). ROIC decreased on 4.0 pp from 8.6% to 4.6% in 2016. ROE decreased on 5.5 pp from 10.7% to 5.2% in 2016.
Leverage (Debt)
Debt decreased slightly on 1.4% while cash dropped on 17.6%.
Appendix 1: Peers in REITS
Below you can find Fortune Real Estate Investment Trust benchmarking vs. other companies in REITS 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 |
|---|
| New Century Real Estate Investment Trust ($1275) | 1.2% | -41.7% | -41.7% | 16.5% | |
| Sunlight Real Estate Investment Trust ($435) | | 8.3% | 9.3% | 9.5% | 2.1% |
| 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) | 12.2% | 9.0% | 11.9% | 8.3% | 7.6% |
|---|
| Fortune Real Estate Investment Trust ($778) | | 28.6% | 15.6% | 13.7% | 5.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Link REIT/The ($823) | 179.0% | 340.1% | 257.8% | 362.0% | 199.4% |
| Sunlight Real Estate Investment Trust ($435) | 202.4% | 293.6% | 203.4% | 275.0% | 131.7% |
| 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 (5 companies) | 179.0% | 62.1% | 82.5% | 77.8% | 165.5% |
|---|
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% |
| Regal Real Estate Investment Trust ($1881) | 8.3% | 19.8% | 322.0% | 10.1% | |
| Sunlight Real Estate Investment Trust ($435) | 1.4% | 0.7% | 5.1% | 3.1% | 2.5% |
| 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) | 1.6% | 3.5% | 5.4% | 3.0% | 65.8% |
|---|
| Fortune Real Estate Investment Trust ($778) | 180.5% | 400.4% | 9.4% | 99.9% | 3.7% |
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% |
| Sunlight Real Estate Investment Trust ($435) | 9.2% | 13.3% | 9.2% | 12.6% | 5.8% |
| 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% | 8.7% |
|---|
| Fortune Real Estate Investment Trust ($778) | 13.6% | 16.0% | 14.0% | 8.6% | 4.6% |
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 | |
| Sunlight Real Estate Investment Trust ($435) | 3.3x | 2.1x | 2.7x | 1.9x | 3.4x |
| Link REIT/The ($823) | 1.2x | 0.5x | 0.6x | 0.6x | 1.7x |
| |
|---|
| Median (4 companies) | 3.3x | 6.5x | 6.1x | 4.9x | 2.5x |
|---|
