China Resources Land Ltd EBITDA surged on 29.3% and EBITDA Margin increased on 5.9 pp from 33.5% to 39.5%
20/03/2018 • About China Resources Land Ltd (
$1109) • By InTwits
China Resources Land Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Resources Land Ltd is a fast growth stock: 2017 revenue growth was 9.8%, 5 year revenue CAGR was 18.3% at 2017 ROIC 15.4%
- EBITDA Margin is expanding: 39.5% in 2017 vs. 33.5% in 2016 vs. 33.8% in 2013
- China Resources Land Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.7%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 3,464 in 2017, 2,559 in 2016, 2,617 in 2015, 5,106 in 2014, 5,311 in 2013
- The company has highly profitable business model: ROIC is at 15.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Resources Land Ltd ($1109) key annual financial indicators
| mln. HKD | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 71,389 | 89,705 | 103,393 | 93,567 | 102,765 | 9.8% |
| Gross Profit | 20,107 | 27,353 | 32,298 | 31,571 | 41,367 | 31.0% |
| SG&A | 3,927 | 5,324 | 6,312 | 5,416 | 7,034 | 29.9% |
| EBITDA | 24,112 | 27,922 | 32,511 | 31,360 | 40,555 | 29.3% |
| Net Income | 14,696 | 15,141 | 17,528 | 16,690 | 19,946 | 19.5% |
Balance Sheet
|
|---|
| Cash | 28,239 | 44,857 | 45,875 | 41,773 | 53,573 | 28.2% |
| Short Term Debt | 19,391 | 24,658 | 16,236 | 19,378 | 31,888 | 64.6% |
| Long Term Debt | 48,645 | 69,261 | 61,379 | 63,864 | 83,559 | 30.8% |
Cash flow
|
|---|
| Capex | 7,033 | 13,573 | 9,265 | 7,480 | 6,806 | -9.0% |
Ratios
|
|---|
| Revenue growth | 60.9% | 25.7% | 15.3% | -9.5% | 9.8% | |
| EBITDA growth | 34.9% | 15.8% | 16.4% | -3.5% | 29.3% | |
| Gross Margin | 28.2% | 30.5% | 31.2% | 33.7% | 40.3% | 6.5% |
| EBITDA Margin | 33.8% | 31.1% | 31.4% | 33.5% | 39.5% | 5.9% |
| Net Income Margin | 20.6% | 16.9% | 17.0% | 17.8% | 19.4% | 1.6% |
| SG&A, % of revenue | 5.5% | 5.9% | 6.1% | 5.8% | 6.8% | 1.1% |
| CAPEX, % of revenue | 9.9% | 15.1% | 9.0% | 8.0% | 6.6% | -1.4% |
| ROIC | 14.7% | 13.5% | 13.9% | 14.4% | 15.4% | 1.0% |
| ROE | 19.1% | 15.9% | 15.9% | 16.8% | 17.7% | 0.9% |
| Net Debt/EBITDA | 1.7x | 1.8x | 1.0x | 1.3x | 1.5x | 0.2x |
Revenue and profitability
China Resources Land Ltd's Revenue increased on 9.8%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.
Gross Margin increased on 6.5 pp from 33.7% to 40.3% in 2017. SG&A as a % of Revenue increased slightly on 1.1 pp from 5.8% to 6.8% in 2017.
Net Income marign increased slightly on 1.6 pp from 17.8% to 19.4% in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 China Resources Land Ltd had CAPEX/Revenue of 6.6%. China Resources Land Ltd's CAPEX/Revenue decreased on 8.5 pp from 15.1% in 2014 to 6.6% in 2017. For the last three years the average CAPEX/Revenue was 7.9%.
Return on investment
The company operates at good ROIC (15.41%) and ROE (17.74%). ROIC increased slightly on 0.99 pp from 14.4% to 15.4% in 2017. ROE increased slightly on 0.93 pp from 16.8% to 17.7% in 2017.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 1.3x to 1.5x in 2017. Debt surged on 38.7% while cash surged on 28.2%.
Valuation
China Resources Land Ltd's trades at EV/EBITDA 6.5x and P/E 10.2x.
Appendix 1: Peers in Real Estate
Below we provide China Resources 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| South China Land Ltd ($8155) | | | | 896.2% | |
| Hon Kwok Land Investment Co Ltd ($160) | -73.5% | 60.4% | -5.6% | 335.1% | |
| Golden Wheel Tiandi Holdings Co Ltd ($1232) | -9.6% | -4.6% | -72.4% | 309.9% | |
| LVGEM China Real Estate Invest ($95) | -21.9% | 3,008.3% | -77.4% | 259.3% | |
| ITC Properties Group Ltd ($199) | -95.2% | 75.7% | 678.6% | 206.4% | |
| |
|---|
| Median (136 companies) | 13.1% | 5.1% | 4.1% | 10.3% | 25.8% |
|---|
| China Resources Land Ltd ($1109) | | 25.7% | 15.3% | -9.5% | 9.8% |
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Tern Properties Co Ltd ($277) | 98.4% | 98.4% | 98.7% | 98.8% | |
| Wah Ha Realty Co Ltd ($278) | 96.0% | 93.2% | 95.9% | 92.9% | |
| China Oceanwide Holdings Ltd ($715) | 81.2% | 82.0% | 80.9% | 90.0% | |
| Tian Teck Land Ltd ($266) | 86.9% | 88.9% | 87.5% | 87.9% | |
| Hysan Development Co Ltd ($14) | 86.8% | 87.5% | 87.9% | 87.9% | |
| |
|---|
| Median (88 companies) | 41.9% | 39.2% | 38.2% | 42.3% | 29.6% |
|---|
| China Resources Land Ltd ($1109) | 28.2% | 30.5% | 31.2% | 33.7% | 40.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Oceanwide Holdings Ltd ($715) | 110.5% | 48.4% | 69.2% | 204.5% | |
| SOHO China Ltd ($410) | 80.8% | 104.0% | 201.9% | 175.0% | |
| Wanda Hotel Development Co Ltd ($169) | 43.2% | -125.7% | 28.3% | 109.9% | |
| Swire Properties Ltd ($1972) | 114.6% | 73.2% | 100.3% | 105.1% | |
| Sinolink Worldwide Holdings Ltd ($1168) | 42.2% | 28.8% | 15.8% | 97.2% | |
| |
|---|
| Median (95 companies) | 28.4% | 26.4% | 23.2% | 29.0% | 27.8% |
|---|
| China Resources Land Ltd ($1109) | 33.8% | 31.1% | 31.4% | 33.5% | 39.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Qingdao Holdings International Ltd ($499) | 0.9% | 0.1% | 0.7% | 607.5% | |
| Pacific Century Premium Developments Ltd ($432) | 323.1% | 351.2% | 340.6% | 570.7% | |
| Wah Ha Realty Co Ltd ($278) | 0.0% | | 0.0% | 289.2% | |
| Cheuk Nang Holdings Ltd ($131) | 130.3% | 67.5% | 144.9% | 117.6% | |
| Beijing Capital Juda Ltd ($1329) | 0.1% | 0.1% | 83.1% | 104.7% | |
| |
|---|
| Median (54 companies) | 6.1% | 4.7% | 3.2% | 3.3% | 2.2% |
|---|
| China Resources Land Ltd ($1109) | 9.9% | 15.1% | 9.0% | 8.0% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Gemdale Properties & Investment Corp Ltd ($535) | 19.6% | 10.8% | 15.9% | 17.9% | |
| Colour Life Services Group Co Ltd ($1778) | 47.9% | 29.3% | 14.5% | 13.1% | |
| China Overseas Land & Investment Ltd ($688) | 15.1% | 18.5% | 15.4% | 13.0% | 12.8% |
| Future Land Development Holdings Ltd ($1030) | 16.0% | 11.3% | 12.3% | 11.9% | |
| Road King Infrastructure Ltd ($1098) | 8.4% | 8.4% | 6.9% | 11.3% | |
| |
|---|
| Median (137 companies) | 4.0% | 4.0% | 2.5% | 3.4% | 13.5% |
|---|
| China Resources Land Ltd ($1109) | 14.7% | 13.5% | 13.9% | 14.4% | 15.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Henry Group Holdings Ltd ($859) | 103.1x | | -23.1x | 65.0x | |
| Asia Standard International Group Ltd ($129) | 3.3x | 4.4x | | 38.3x | |
| Beijing Capital Land Ltd ($2868) | 4.6x | 11.7x | 49.1x | 37.0x | |
| Beijing Capital Juda Ltd ($1329) | 0.6x | 1.6x | 11.5x | 36.3x | |
| Asia Orient Holdings Ltd ($214) | 2.1x | 2.7x | 6.1x | 33.8x | |
| |
|---|
| Median (82 companies) | 2.8x | 3.0x | 3.3x | 2.9x | 1.5x |
|---|
| China Resources Land Ltd ($1109) | 1.7x | 1.8x | 1.0x | 1.3x | 1.5x |
