Shui On Land Ltd EBITDA surged on 520% in 2016 and EBITDA Margin surged on 16.3 pp from 12.7% to 29.0%
22/03/2017 • About Shui On Land Ltd (
$272) • By InTwits
Shui On Land Ltd 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 4.9%
- It operates with high leverage: Net Debt/EBITDA is 7.3x while industry average is 4.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shui On Land Ltd ($272) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,821 | 9,828 | 10,249 | 6,472 | 17,600 | 171.9% |
| Gross Profit | 2,060 | 3,155 | 3,446 | 1,689 | 5,905 | 249.6% |
| SG&A | 945 | 1,266 | 1,234 | 1,126 | 1,213 | 7.7% |
| EBITDA | 1,394 | 2,456 | 2,413 | 824 | 5,110 | 520.1% |
| Net Income | 2,048 | 2,439 | 2,313 | 1,339 | 1,537 | 14.8% |
Balance Sheet
|
|---|
| Cash | 6,287 | 5,378 | 6,668 | 3,344 | 9,653 | 188.7% |
| Short Term Debt | 10,429 | 6,315 | 11,473 | 12,778 | 12,457 | -2.5% |
| Long Term Debt | 26,723 | 31,381 | 36,562 | 35,214 | 34,666 | -1.6% |
Cash flow
|
|---|
| Capex | 4,081 | 4,636 | 4,470 | 2,962 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -43.2% | 103.9% | 4.3% | -36.9% | 171.9% | |
| EBITDA growth | -54.0% | 76.2% | -1.8% | -65.9% | 520.1% | |
| Gross Margin | 42.7% | 32.1% | 33.6% | 26.1% | 33.6% | 7.5% |
| EBITDA Margin | 28.9% | 25.0% | 23.5% | 12.7% | 29.0% | 16.3% |
| Net Income Margin | 42.5% | 24.8% | 22.6% | 20.7% | 8.7% | -12.0% |
| SG&A, % of revenue | 19.6% | 12.9% | 12.0% | 17.4% | 6.9% | -10.5% |
| CAPEX, % of revenue | 84.7% | 47.2% | 43.6% | 45.8% | | -45.8% |
| ROIC | 1.7% | 2.7% | 2.4% | 0.7% | 4.9% | 4.2% |
| ROE | 6.8% | 6.3% | 4.8% | 2.1% | 2.9% | 0.8% |
| Net Debt/EBITDA | 22.1x | 13.2x | 17.1x | 54.2x | 7.3x | -46.9x |
Revenue and profitability
The company's Revenue surged on 172%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from 19.2% to 23.9% in FY2016.
Gross Margin increased on 7.5 pp from 26.1% to 33.6% in FY2016. SG&A as a % of Revenue dropped on 10.5 pp from 17.4% to 6.9% in FY2016.
Net Income marign dropped on 12.0 pp from 20.7% to 8.7% in FY2016.
Return on investment
The company operates at low ROIC (4.94%) and ROE (2.94%). ROIC increased on 4.2 pp from 0.70% to 4.9% in FY2016. ROE increased slightly on 0.82 pp from 2.1% to 2.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.3x and Debt / EBITDA is 9.2x. Net Debt / EBITDA dropped on 46.9x from 54.2x to 7.3x in FY2016. Debt decreased slightly on 1.8% while cash jumped on 189%.
Appendix 1: Peers in Real Estate
Below we provide Shui On Land 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) | | | | 737.1% | -0.9% |
| ITC Properties Group Ltd ($199) | | -95.2% | 75.7% | 678.6% | 206.4% |
| |
|---|
| Median (179 companies) | 17.9% | 13.1% | 5.3% | 4.5% | 8.3% |
|---|
| Shui On Land Ltd ($272) | | 103.9% | 4.3% | -36.9% | 171.9% |
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% | 41.9% | 39.3% | 38.4% | 43.6% |
|---|
| Shui On Land Ltd ($272) | 42.7% | 32.1% | 33.6% | 26.1% | 33.6% |
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% | 27.8% | 23.5% | 31.7% |
|---|
| Shui On Land Ltd ($272) | 28.9% | 25.0% | 23.5% | 12.7% | 29.0% |
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% | 3.8% |
|---|
| Shui On Land Ltd ($272) | 84.7% | 47.2% | 43.6% | 45.8% | |
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% | 13.1% |
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 26.8% | 19.6% | 12.3% | 14.4% | |
| |
|---|
| Median (181 companies) | 4.2% | 4.1% | 4.2% | 2.5% | 3.3% |
|---|
| Shui On Land Ltd ($272) | 1.7% | 2.7% | 2.4% | 0.7% | 4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 | |
| Greenland Hong Kong Holdings Ltd ($337) | | 6.2x | 49.3x | 38.4x | |
| |
|---|
| Median (136 companies) | 2.3x | 2.7x | 3.0x | 3.2x | 2.7x |
|---|
| Shui On Land Ltd ($272) | 22.1x | 13.2x | 17.1x | 54.2x | 7.3x |
