MGM China Holdings Ltd Debt jumped on 25.4% in 2016 and Net Debt / EBITDA jumped on 1.3x from 1.5x to 2.9x
16/02/2017 • About MGM China Holdings Ltd (
$2282) • By InTwits
MGM China Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- MGM China Holdings Ltd is a company in decline: FY2016 revenue growth was -13.2%, 5 years revenue CAGR was -6.0%
- The company has highly profitable business model: ROIC is at 16.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
MGM China Holdings Ltd ($2282) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 21,774 | 25,728 | 25,454 | 17,170 | 14,907 | -13.2% |
| EBITDA | 5,225 | 6,311 | 6,568 | 4,086 | 3,871 | -5.3% |
| Net Income | 4,531 | 5,334 | 5,707 | 3,113 | 3,037 | -2.4% |
Balance Sheet
|
|---|
| Cash | 7,381 | 7,885 | 4,232 | 5,421 | 3,547 | -34.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | 605 | |
| Long Term Debt | 3,983 | 4,049 | 4,118 | 11,732 | 14,104 | 20.2% |
Cash flow
|
|---|
| Capex | 1,039 | 1,936 | 2,754 | 4,504 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 7.3% | 18.2% | -1.1% | -32.5% | -13.2% | |
| EBITDA growth | 10.8% | 20.8% | 4.1% | -37.8% | -5.3% | |
| EBITDA Margin | 24.0% | 24.5% | 25.8% | 23.8% | 26.0% | 2.2% |
| Net Income Margin | 20.8% | 20.7% | 22.4% | 18.1% | 20.4% | 2.2% |
| CAPEX, % of revenue | 4.8% | 7.5% | 10.8% | 26.2% | | -26.2% |
| ROIC | 46.2% | 53.8% | 54.5% | 24.0% | 16.0% | -8.0% |
| ROE | 87.8% | 85.9% | 88.9% | 55.3% | 50.1% | -5.2% |
| Net Debt/EBITDA | -0.7x | -0.6x | -0.0x | 1.5x | 2.9x | 1.3x |
Revenue and profitability
MGM China Holdings Ltd's Revenue dropped on 13.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.2 pp from 23.8% to 26.0% in FY2016.
Net Income marign increased on 2.2 pp from 18.1% to 20.4% in FY2016.
Return on investment
The company operates at high and attractive ROE (50.06%) while ROIC is a bit lower (16.00%). ROIC decreased on 8.0 pp from 24.0% to 16.0% in FY2016. ROE decreased on 5.2 pp from 55.3% to 50.1% in FY2016.
Leverage (Debt)
Debt level is 2.9x Net Debt / EBITDA and 3.8x Debt / EBITDA. Net Debt / EBITDA surged on 1.3x from 1.5x to 2.9x in FY2016. Debt surged on 25.4% while cash dropped on 34.6%.
Management team
MGM China Holdings Ltd's CEO is Grant R Bowie. Grant R Bowie has 8 years tenure at the company. MGM China Holdings Ltd's CFO is Wang Zhi Qi "Hubert". Wang Zhi Qi "Hubert" has 7 years tenure at the company.
Appendix 1: Peers in Lodging
Below you can find MGM China Holdings Ltd benchmarking vs. other companies in Lodging 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 |
|---|
| China New City Commercial Development Ltd ($1321) | -16.9% | 433.0% | -76.2% | 141.3% | |
| Zhuhai Holdings Investment Group Ltd ($908) | 229.8% | 14.5% | 57.0% | 76.3% | |
| Shanghai Jin Jiang International Hotels Group Co Ltd ($2006) | -28.8% | 3.2% | 0.8% | 29.9% | |
| Century City International Holdings Ltd ($355) | 283.6% | 108.7% | -35.8% | 25.9% | |
| Far East Consortium International Ltd/HK ($35) | | 111.9% | 9.0% | 25.7% | -21.8% |
| |
|---|
| Median (23 companies) | 10.7% | 10.2% | 0.8% | -3.5% | -3.2% |
|---|
| MGM China Holdings Ltd ($2282) | | 18.2% | -1.1% | -32.5% | -13.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.5% | |
| Wynn Macau Ltd ($1128) | 97.9% | 98.3% | 98.5% | 98.4% | |
| Emperor Entertainment Hotel Ltd ($296) | 77.1% | 75.6% | 76.8% | 70.9% | 65.5% |
| Asia Standard Hotel Group Ltd ($292) | 60.7% | 73.4% | 72.1% | 67.6% | 65.8% |
| Sino Hotels Holdings Ltd ($1221) | 71.3% | 70.4% | 68.9% | 65.8% | 62.0% |
| |
|---|
| Median (18 companies) | 56.4% | 51.1% | 51.7% | 48.6% | 62.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NagaCorp Ltd ($3918) | 49.8% | 50.1% | 42.8% | 45.3% | 48.1% |
| Emperor Entertainment Hotel Ltd ($296) | 44.9% | 46.4% | 46.9% | 43.1% | 36.2% |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 41.2% | 40.5% | 25.8% | 41.5% | |
| Asia Standard Hotel Group Ltd ($292) | -23.9% | 65.2% | 49.9% | 40.4% | 17.8% |
| Sino Hotels Holdings Ltd ($1221) | 46.5% | 45.9% | 43.1% | 39.6% | 33.1% |
| |
|---|
| Median (23 companies) | 26.8% | 26.4% | 25.8% | 22.6% | 33.1% |
|---|
| MGM China Holdings Ltd ($2282) | 24.0% | 24.5% | 25.8% | 23.8% | 26.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Macau Legend Development Ltd ($1680) | 5.0% | 24.2% | 73.0% | 68.5% | |
| Wynn Macau Ltd ($1128) | 5.2% | 11.0% | 28.2% | 66.6% | |
| Legend Strategy International Holdings Group Co Ltd ($1355) | 17.0% | 38.0% | 1.2% | 62.6% | |
| Century City International Holdings Ltd ($355) | 21.2% | 32.9% | 13.4% | 35.8% | |
| Shangri-La Asia Ltd ($69) | 48.5% | 33.1% | 41.2% | 34.3% | |
| |
|---|
| Median (23 companies) | 7.4% | 11.0% | 13.2% | 12.8% | 10.3% |
|---|
| MGM China Holdings Ltd ($2282) | 4.8% | 7.5% | 10.8% | 26.2% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NagaCorp Ltd ($3918) | 30.6% | 28.9% | 22.6% | 28.6% | 21.3% |
| Sands China Ltd ($1928) | 14.2% | 24.4% | 26.7% | 15.8% | |
| Emperor Entertainment Hotel Ltd ($296) | 22.2% | 21.1% | 18.4% | 12.0% | 7.5% |
| Galaxy Entertainment Group Ltd ($27) | 25.2% | 30.0% | 27.5% | 10.2% | |
| Wynn Macau Ltd ($1128) | 53.9% | 42.3% | 29.9% | 9.9% | |
| |
|---|
| Median (23 companies) | 5.7% | 5.6% | 3.6% | 2.7% | 4.2% |
|---|
| MGM China Holdings Ltd ($2282) | 46.2% | 53.8% | 54.5% | 24.0% | 16.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China New City Commercial Development Ltd ($1321) | 26.0x | 7.9x | | 100.1x | |
| Century City International Holdings Ltd ($355) | 6.5x | 9.3x | 11.2x | 12.3x | |
| Regal Hotels International Holdings Ltd ($78) | 5.0x | 8.7x | 11.8x | 11.1x | |
| Shangri-La Asia Ltd ($69) | 6.0x | 6.8x | 6.9x | 9.8x | |
| Macau Legend Development Ltd ($1680) | 2.2x | 0.6x | 0.2x | 7.1x | |
| |
|---|
| Median (21 companies) | 1.2x | 0.8x | 1.0x | 4.0x | 2.3x |
|---|
| MGM China Holdings Ltd ($2282) | -0.7x | -0.6x | -0.0x | 1.5x | 2.9x |
