Guangzhou R&F Properties Co Ltd Debt jumped on 46.6% in 2016 and EBITDA increased on 9.0%
10/03/2017 • About Guangzhou R&F Properties Co Ltd (
$2777) • By InTwits
Guangzhou R&F Properties Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has business model with low profitability: ROIC is at 8.2%
- It operates with high leverage: Net Debt/EBITDA is 6.9x while industry average is 3.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guangzhou R&F Properties Co Ltd ($2777) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 26,389 | 31,799 | 31,430 | 44,291 | 53,730 | 21.3% |
| Gross Profit | 10,297 | 11,957 | 11,122 | 14,207 | 15,187 | 6.9% |
| SG&A | 1,972 | 2,455 | 3,104 | 3,306 | 3,988 | 20.6% |
| EBITDA | | | | 12,725 | 13,865 | 9.0% |
| Net Income | 5,510 | 7,640 | 6,554 | 6,721 | 7,030 | 4.6% |
Balance Sheet
|
|---|
| Cash | 12,862 | 24,344 | 19,830 | 13,970 | 25,306 | 81.1% |
| Short Term Debt | 7,212 | 18,095 | 22,105 | 32,679 | 33,682 | 3.1% |
| Long Term Debt | 28,272 | 43,249 | 45,494 | 49,759 | 87,170 | 75.2% |
Cash flow
|
|---|
| Capex | 761 | 994 | 1,258 | 1,439 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -3.6% | 20.5% | -1.2% | 40.9% | 21.3% | |
| EBITDA growth | | | | | 9.0% | |
| Gross Margin | 39.0% | 37.6% | 35.4% | 32.1% | 28.3% | -3.8% |
| EBITDA Margin | 0.0% | 0.0% | 0.0% | 28.7% | 25.8% | -2.9% |
| Net Income Margin | 20.9% | 24.0% | 20.9% | 15.2% | 13.1% | -2.1% |
| SG&A, % of revenue | 7.5% | 7.7% | 9.9% | 7.5% | 7.4% | -0.0% |
| CAPEX, % of revenue | 2.9% | 3.1% | 4.0% | 3.2% | | -3.2% |
| ROIC | 13.7% | 11.7% | 7.3% | 9.2% | 8.2% | -1.0% |
| ROE | 22.5% | 25.7% | 15.5% | 12.2% | 16.0% | 3.8% |
| Net Debt/EBITDA | | | | 5.4x | 6.9x | 1.5x |
Revenue and profitability
The company's Revenue surged on 21.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 3.9% to 1.8% in FY2016.
Gross Margin decreased on 3.8 pp from 32.1% to 28.3% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 2.1 pp from 15.2% to 13.1% in FY2016.
Return on investment
The company operates at good ROE (15.99%) while ROIC is low (8.17%). ROIC decreased slightly on 1.0 pp from 9.2% to 8.2% in FY2016. ROE increased on 3.8 pp from 12.2% to 16.0% in FY2016.
Leverage (Debt)
Debt level is 6.9x Net Debt / EBITDA and 8.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.5x from 5.4x to 6.9x in FY2016. Debt jumped on 46.6% while cash jumped on 81.1%.
Management team
The company's CEO is Zhang Li. Zhang Li has 13 years tenure at the company. The company's CFO is Zhu Ling. Zhu Ling has 13 years tenure at the company.
Appendix 1: Peers in Real Estate
Below we provide Guangzhou R&F Properties Co 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% | -82.8% |
| Henderson Investment Ltd ($97) | -78.9% | | | 737.1% | |
| ITC Properties Group Ltd ($199) | | -95.2% | 75.7% | 678.6% | 206.4% |
| |
|---|
| Median (179 companies) | 15.9% | 13.1% | 5.3% | 4.2% | 6.7% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | | 20.5% | -1.2% | 40.9% | 21.3% |
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% | 45.1% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | 39.0% | 37.6% | 35.4% | 32.1% | 28.3% |
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% | 56.8% |
| 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) | 29.1% | 28.4% | 27.3% | 23.4% | 31.7% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | | | | 28.7% | 25.8% |
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) | 5.9% | 6.2% | 4.8% | 3.3% | 3.3% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | 2.9% | 3.1% | 4.0% | 3.2% | |
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) | 4.0% | 4.0% | 4.1% | 2.4% | 2.5% |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | 13.7% | 11.7% | 7.3% | 9.2% | 8.2% |
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) | 2.4x | 2.7x | 3.0x | 3.2x | 3.1x |
|---|
| Guangzhou R&F Properties Co Ltd ($2777) | | | | 5.4x | 6.9x |
