Swire Properties Ltd CAPEX jumped on 55.4% in 2016 and Revenue increased on 2.1%
16/03/2017 • About Swire Properties Ltd (
$1972) • By InTwits
Swire Properties Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Swire Properties Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 32.0%. At the same time it's a lot of higher than industry average of 5.5%.
- CAPEX is quite volatile: 610 in 2016, 510 in 2015, 301 in 2014, 63.1 in 2013, 44.6 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Swire Properties Ltd ($1972) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,052 | 12,935 | 15,387 | 16,447 | 16,792 | 2.1% |
| Gross Profit | 10,282 | 9,404 | 10,211 | 10,666 | 10,306 | -3.4% |
| SG&A | 885 | 974 | 1,010 | 1,166 | 1,294 | 11.0% |
| EBITDA | 21,717 | 14,820 | 11,265 | 16,497 | 17,642 | 6.9% |
| Net Income | 18,753 | 12,525 | 9,516 | 14,072 | 15,050 | 6.9% |
Balance Sheet
|
|---|
| Cash | 1,940 | 2,521 | 2,874 | 4,358 | 1,681 | -61.4% |
| Short Term Debt | 5,014 | 8,354 | 4,851 | 7,881 | 7,822 | -0.7% |
| Long Term Debt | 26,197 | 26,946 | 32,744 | 30,474 | 29,559 | -3.0% |
Cash flow
|
|---|
| Capex | 3,004 | 5,458 | 4,951 | 4,174 | 6,486 | 55.4% |
Ratios
|
|---|
| Revenue growth | 46.7% | -7.9% | 19.0% | 6.9% | 2.1% | |
| EBITDA growth | -20.1% | -31.8% | -24.0% | 46.4% | 6.9% | |
| Gross Margin | 73.2% | 72.7% | 66.4% | 64.9% | 61.4% | -3.5% |
| EBITDA Margin | 154.5% | 114.6% | 73.2% | 100.3% | 105.1% | 4.8% |
| Net Income Margin | 133.5% | 96.8% | 61.8% | 85.6% | 89.6% | 4.1% |
| SG&A, % of revenue | 6.3% | 7.5% | 6.6% | 7.1% | 7.7% | 0.6% |
| CAPEX, % of revenue | 21.4% | 42.2% | 32.2% | 25.4% | 38.6% | 13.2% |
| ROIC | 9.8% | 6.1% | 4.4% | 6.3% | 6.5% | 0.2% |
| ROE | 10.2% | 6.3% | 4.6% | 6.6% | 6.8% | 0.2% |
| Net Debt/EBITDA | 1.3x | 2.2x | 3.1x | 2.1x | 2.0x | -0.0x |
Revenue and profitability
The company's Revenue increased on 2.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 23.8% to 26.0% in FY2016.
Gross Margin decreased on 3.5 pp from 64.9% to 61.4% in FY2016. SG&A as a % of Revenue increased slightly on 0.62 pp from 7.1% to 7.7% in FY2016.
Net Income marign increased on 4.1 pp from 85.6% to 89.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Swire Properties Ltd's CAPEX/Revenue was 38.6% in FY2016. CAPEX/Revenue decreased on 3.6 pp from 42.2% in FY2013 to 38.6% in FY2016. It's average CAPEX/Revenue for the last three years was 32.1%.
Return on investment
The company operates at low ROIC (6.46%) and ROE (6.82%). ROIC showed almost no change in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.1x. Net Debt / EBITDA decreased on 0.037x from 2.1x to 2.0x in FY2016. Debt decreased on 2.5% while cash dropped on 61.4%.
Management team
The company's CEO Guy Martin Coutts Bradley has spent 3 years at the company.
Appendix 1: Peers in Real Estate
Below you can find Swire Properties Ltd 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% | 4.2% | 7.8% |
|---|
| Swire Properties Ltd ($1972) | | -7.9% | 19.0% | 6.9% | 2.1% |
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) | 41.9% | 41.8% | 39.1% | 38.2% | 44.7% |
|---|
| Swire Properties Ltd ($1972) | 73.2% | 72.7% | 66.4% | 64.9% | 61.4% |
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% | |
| Tern Properties Co Ltd ($277) | 103.0% | 112.8% | 78.4% | 86.9% | 75.8% |
| |
|---|
| Median (179 companies) | 28.9% | 28.3% | 26.9% | 23.4% | 32.8% |
|---|
| Swire Properties Ltd ($1972) | 154.5% | 114.6% | 73.2% | 100.3% | 105.1% |
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% | 4.7% | 3.2% | 3.3% |
|---|
| Swire Properties Ltd ($1972) | 21.4% | 42.2% | 32.2% | 25.4% | 38.6% |
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% | 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) | 4.0% | 4.0% | 4.1% | 2.4% | 2.9% |
|---|
| Swire Properties Ltd ($1972) | 9.8% | 6.1% | 4.4% | 6.3% | 6.5% |
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 | 2.8x | 3.0x | 3.3x | 2.7x |
|---|
| Swire Properties Ltd ($1972) | 1.3x | 2.2x | 3.1x | 2.1x | 2.0x |
