LVGEM China Real Estate Invest EBITDA surged on 394% and EBITDA Margin surged on 12.1 pp from 32.2% to 44.3%
16/03/2017 • About LVGEM China Real Estate Invest (
$95) • By InTwits
LVGEM China Real Estate Invest reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 44.3% in FY2016, 32.2% in FY2015, 43.0% in FY2014, -6.0% in FY2013, 0.3% in FY2012
- The company has business model with low profitability: ROIC is at 9.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.3x while industry average is 4.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
LVGEM China Real Estate Invest ($95) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 272 | 212 | 6,602 | 1,493 | 5,366 | 259.3% |
| Gross Profit | 49 | 32 | 3,054 | 784 | 2,684 | 242.3% |
| SG&A | 66 | 49 | 280 | 389 | 476 | 22.3% |
| EBITDA | 1 | -13 | 2,838 | 481 | 2,375 | 394.1% |
| Net Income | 8 | -15 | 2,198 | 515 | 938 | 81.9% |
Balance Sheet
|
|---|
| Cash | 291 | 436 | 1,767 | 1,809 | 3,120 | 72.4% |
| Short Term Debt | 220 | 127 | 2,211 | 2,003 | 4,000 | 99.8% |
| Long Term Debt | 94 | 96 | 7,901 | 7,834 | 9,381 | 19.8% |
Cash flow
|
|---|
| Capex | | 1 | 670 | 111 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -27.5% | -21.9% | 3,008.3% | -77.4% | 259.3% | |
| EBITDA growth | -89.0% | -1,463.3% | -22,536.0% | -83.1% | 394.1% | |
| Gross Margin | 18.0% | 14.9% | 46.3% | 52.5% | 50.0% | -2.5% |
| EBITDA Margin | 0.3% | -6.0% | 43.0% | 32.2% | 44.3% | 12.1% |
| Net Income Margin | 3.0% | -6.9% | 33.3% | 34.5% | 17.5% | -17.0% |
| SG&A, % of revenue | 24.1% | 23.2% | 4.2% | 26.0% | 8.9% | -17.2% |
| CAPEX, % of revenue | | 0.3% | 10.2% | 7.5% | | -7.5% |
| ROIC | -0.2% | -1.1% | 22.1% | 1.8% | 9.3% | 7.5% |
| ROE | 0.9% | -1.5% | 124.3% | 21.0% | 14.7% | -6.3% |
| Net Debt/EBITDA | 24.4x | | 2.9x | 16.7x | 4.3x | -12.4x |
Revenue and profitability
The company's Revenue jumped on 259%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 12.1 pp from 32.2% to 44.3% in FY2016.
Gross Margin decreased on 2.5 pp from 52.5% to 50.0% in FY2016. SG&A as a % of Revenue dropped on 17.2 pp from 26.0% to 8.9% in FY2016.
Net Income marign dropped on 17.0 pp from 34.5% to 17.5% in FY2016.
Return on investment
The company operates at good ROE (14.74%) while ROIC is low (9.29%). ROIC increased on 7.5 pp from 1.8% to 9.3% in FY2016. ROE decreased on 6.3 pp from 21.0% to 14.7% in FY2016.
Leverage (Debt)
Debt level is 4.3x Net Debt / EBITDA and 5.6x Debt / EBITDA. Net Debt / EBITDA dropped on 12.4x from 16.7x to 4.3x in FY2016. Debt surged on 36.0% while cash jumped on 72.4%.
Appendix 1: Peers in Real Estate
Below you can find LVGEM China Real Estate Invest benchmarking vs. other companies in Real Estate 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 |
|---|
| 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) | 15.8% | 13.5% | 5.2% | 4.5% | 7.5% |
|---|
| LVGEM China Real Estate Invest ($95) | | -21.9% | 3,008.3% | -77.4% | 259.3% |
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% | 39.1% | 38.2% | 44.7% |
|---|
| LVGEM China Real Estate Invest ($95) | 18.0% | 14.9% | 46.3% | 52.5% | 50.0% |
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% | 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% | 105.1% |
| |
|---|
| Median (179 companies) | 29.3% | 28.5% | 26.9% | 23.4% | 32.8% |
|---|
| LVGEM China Real Estate Invest ($95) | 0.3% | -6.0% | 43.0% | 32.2% | 44.3% |
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) | 5.7% | 6.2% | 4.7% | 3.2% | 3.8% |
|---|
| LVGEM China Real Estate Invest ($95) | | 0.3% | 10.2% | 7.5% | |
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% | 17.9% |
| 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) | 4.2% | 4.1% | 4.1% | 2.5% | 2.9% |
|---|
| LVGEM China Real Estate Invest ($95) | -0.2% | -1.1% | 22.1% | 1.8% | 9.3% |
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 | 2.3x |
|---|
| LVGEM China Real Estate Invest ($95) | 24.4x | | 2.9x | 16.7x | 4.3x |
