Prosperity REIT Net Income dropped on 18.4% while Revenue increased on 3.2%
10/03/2017 • About Prosperity REIT (
$808) • By InTwits
Prosperity REIT reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: The company has potentially unprofitable business model: ROIC is at 2.8%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prosperity REIT ($808) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 308.5 | 341.9 | 403.4 | 438.7 | 452.9 | 3.2% |
| Net Income | 1,074.7 | 695.7 | 466.5 | 692.6 | 565.2 | -18.4% |
Balance Sheet
|
|---|
| Cash | 44.3 | 58.1 | 65.2 | 64.9 | 72.4 | 11.6% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 20.0 | |
| Long Term Debt | 1,763.4 | 1,778.5 | 2,800.6 | 2,813.3 | 2,833.3 | 0.7% |
Cash flow
|
|---|
| Capex | 13.3 | 15.4 | 25.8 | 13.3 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 10.8% | 10.8% | 18.0% | 8.8% | 3.2% | |
| Net Income Margin | 348.4% | 203.5% | 115.6% | 157.9% | 124.8% | -33.1% |
| CAPEX, % of revenue | 4.3% | 4.5% | 6.4% | 3.0% | | -3.0% |
| ROIC | 2.7% | 2.7% | 2.7% | 2.9% | 2.8% | -0.1% |
| ROE | 20.0% | 11.4% | 7.2% | 10.0% | 7.7% | -2.3% |
Revenue and profitability
Prosperity REIT's Revenue increased on 3.2%.
Net Income marign dropped on 33.1 pp from 158% to 125% in FY2016.
Return on investment
The company operates at low ROIC (2.79%) and ROE (7.71%). ROIC showed almost no change in FY2016. ROE decreased on 2.3 pp from 10.0% to 7.7% in FY2016.
Leverage (Debt)
Debt increased slightly on 1.4% while cash surged on 11.6%.
Management team
Prosperity REIT's CEO is Wong Lai Hung "Mavis". Wong Lai Hung "Mavis" has 7 years tenure at the company.
Appendix 1: Peers in REITS
Below we provide Prosperity REIT benchmarking against other companies in REITS 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 |
|---|
| New Century Real Estate Investment Trust ($1275) | 1.2% | -41.7% | -41.7% | 16.5% | |
| Fortune Real Estate Investment Trust ($778) | | 28.6% | 15.6% | 13.7% | 5.0% |
| Sunlight Real Estate Investment Trust ($435) | | 8.3% | 9.3% | 9.5% | 2.1% |
| Yuexiu Real Estate Investment Trust ($405) | | 92.5% | 14.6% | 8.8% | 7.5% |
| Link REIT/The ($823) | | 9.7% | 10.0% | 7.9% | 13.2% |
| |
|---|
| Median (8 companies) | 13.6% | 9.0% | 11.9% | 8.4% | 7.5% |
|---|
| Prosperity REIT ($808) | | 10.8% | 18.0% | 8.8% | 3.2% |
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% | 56.0% |
| 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% | 131.7% |
|---|
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% |
| Fortune Real Estate Investment Trust ($778) | 180.5% | 400.4% | 9.4% | 99.9% | 3.7% |
| 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% |
| Yuexiu Real Estate Investment Trust ($405) | 1.8% | 0.6% | 1.4% | 2.9% | 2.8% |
| |
|---|
| Median (8 companies) | 1.6% | 3.5% | 5.4% | 3.0% | 3.2% |
|---|
| Prosperity REIT ($808) | 4.3% | 4.5% | 6.4% | 3.0% | |
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% |
| Fortune Real Estate Investment Trust ($778) | 13.6% | 16.0% | 14.0% | 8.6% | 4.6% |
| Champion REIT ($2778) | 8.9% | 4.0% | 4.0% | 6.2% | 5.8% |
| New Century Real Estate Investment Trust ($1275) | 6.5% | 3.0% | 4.4% | 4.8% | |
| |
|---|
| Median (9 companies) | 8.9% | 3.7% | 4.0% | 4.8% | 5.8% |
|---|
| Prosperity REIT ($808) | 2.7% | 2.7% | 2.7% | 2.9% | 2.8% |
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 | 10.4x |
| 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 | 3.4x |
|---|
