China SCE Property Holdings Ltd reports 81.8% Net Income growth and 16.8% Revenue growth
27/02/2017 • About China SCE Property Holdings Ltd (
$1966) • By InTwits
China SCE Property Holdings Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China SCE Property Holdings Ltd is a growth stock: 2016 revenue growth was 16.8%, 5 year revenue CAGR was 27.0% at 2016 ROIC 10.0%
- China SCE Property Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 203 in 2016, 130 in 2015, 17.6 in 2014, 596 in 2013, 313 in 2012
- The company has business model with average profitability: ROIC is at 10.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.2x 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.
China SCE Property Holdings Ltd ($1966) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,637 | 6,588 | 6,887 | 10,690 | 12,481 | 16.8% |
| Gross Profit | 1,285 | 1,845 | 2,402 | 3,011 | 3,126 | 3.8% |
| SG&A | 361 | 486 | 591 | 699 | 879 | 25.7% |
| EBITDA | 1,429 | 2,132 | 2,706 | 2,800 | 2,939 | 5.0% |
| Net Income | 672 | 888 | 901 | 1,167 | 2,122 | 81.8% |
Balance Sheet
|
|---|
| Cash | 2,277 | 3,300 | 3,534 | 4,835 | 5,821 | 20.4% |
| Short Term Debt | 2,112 | 2,409 | 3,700 | 3,841 | 3,427 | -10.8% |
| Long Term Debt | 4,844 | 7,290 | 8,527 | 10,612 | 14,851 | 39.9% |
Cash flow
|
|---|
| Capex | 313 | 596 | 18 | 130 | 203 | 56.3% |
Ratios
|
|---|
| Revenue growth | -3.5% | 81.2% | 4.5% | 55.2% | 16.8% | |
| EBITDA growth | -13.4% | 49.3% | 26.9% | 3.5% | 5.0% | |
| Gross Margin | 35.3% | 28.0% | 34.9% | 28.2% | 25.0% | -3.1% |
| EBITDA Margin | 39.3% | 32.4% | 39.3% | 26.2% | 23.6% | -2.6% |
| Net Income Margin | 18.5% | 13.5% | 13.1% | 10.9% | 17.0% | 6.1% |
| SG&A, % of revenue | 9.9% | 7.4% | 8.6% | 6.5% | 7.0% | 0.5% |
| CAPEX, % of revenue | 8.6% | 9.0% | 0.3% | 1.2% | 1.6% | 0.4% |
| ROIC | 10.8% | 12.6% | 12.5% | 10.9% | 10.0% | -0.9% |
| ROE | 14.7% | 16.8% | 14.7% | 13.6% | 27.0% | 13.4% |
| Net Debt/EBITDA | 3.3x | 3.0x | 3.2x | 3.4x | 4.2x | 0.8x |
Revenue and profitability
The company's Revenue jumped on 16.8%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.6 pp from 26.2% to 23.6% in 2016.
Gross Margin decreased on 3.1 pp from 28.2% to 25.0% in 2016. SG&A as a % of Revenue increased slightly on 0.50 pp from 6.5% to 7.0% in 2016.
Net Income marign increased on 6.1 pp from 10.9% to 17.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
China SCE Property Holdings Ltd's CAPEX/Revenue was 1.6% in 2016. The company's CAPEX/Revenue decreased on 7.4 pp from 9.0% in 2013 to 1.6% in 2016. It's average CAPEX/Revenue for the last three years was 1.0%.
Return on investment
The company operates at good ROE (27.03%) while ROIC is low (10.02%). ROIC decreased slightly on 0.90 pp from 10.9% to 10.0% in 2016. ROE surged on 13.4 pp from 13.6% to 27.0% in 2016.
Leverage (Debt)
Debt level is 4.2x Net Debt / EBITDA and 6.2x Debt / EBITDA. Net Debt / EBITDA surged on 0.8x from 3.4x to 4.2x in 2016. Debt jumped on 26.5% while cash jumped on 20.4%.
Appendix 1: Peers in Real Estate
Below we provide China SCE Property Holdings 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) | 16.1% | 13.1% | 5.3% | 4.2% | 6.7% |
|---|
| China SCE Property Holdings Ltd ($1966) | | 81.2% | 4.5% | 55.2% | 16.8% |
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% |
|---|
| China SCE Property Holdings Ltd ($1966) | 35.3% | 28.0% | 34.9% | 28.2% | 25.0% |
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% | 28.3% | 26.9% | 23.4% | 31.2% |
|---|
| China SCE Property Holdings Ltd ($1966) | 39.3% | 32.4% | 39.3% | 26.2% | 23.6% |
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% | 570.7% |
| 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% | 4.0% |
|---|
| China SCE Property Holdings Ltd ($1966) | 8.6% | 9.0% | 0.3% | 1.2% | 1.6% |
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) | 4.0% | 4.0% | 4.1% | 2.4% | 1.9% |
|---|
| China SCE Property Holdings Ltd ($1966) | 10.8% | 12.6% | 12.5% | 10.9% | 10.0% |
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 | 37.0x |
| 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 | 2.2x |
|---|
| China SCE Property Holdings Ltd ($1966) | 3.3x | 3.0x | 3.2x | 3.4x | 4.2x |
