Dalian Wanda Commercial Properties Co Ltd reports 26.7 pp EBITDA Margin decline from 88.2% to 61.5% in 2017 in 2017 while 19.2% Revenue growth
23/03/2018 • About Dalian Wanda Commercial Properties Co Ltd (
$3699) • By InTwits
Dalian Wanda Commercial Properties Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dalian Wanda Commercial Properties Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.4%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 0.93 in 2017, 0.80 in 2016, 44,757 in 2015, 44,005 in 2014, 20,932 in 2013
- The company has potentially unprofitable business model: ROIC is at 4.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dalian Wanda Commercial Properties Co Ltd ($3699) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 86,774 | 99,783 | 124,203 | 56 | 67 | 19.2% |
| Gross Profit | 37,336 | 38,676 | 50,367 | 42 | 51 | 20.3% |
| SG&A | 9,212 | 11,731 | 13,153 | 16 | 29 | 80.7% |
| EBITDA | 47,984 | | 57,844 | 49 | 41 | -16.9% |
| Net Income | 24,581 | 24,839 | 29,971 | 32 | 24 | -23.0% |
Balance Sheet
|
|---|
| Cash | 69,525 | 93,035 | 66,606 | 43 | 42 | -0.6% |
| Short Term Debt | 21,016 | 36,466 | 41,930 | 15 | 6 | -60.8% |
| Long Term Debt | 112,977 | 144,505 | 144,716 | 33 | 27 | -18.5% |
Cash flow
|
|---|
| Capex | 20,932 | 44,005 | 44,757 | 1 | 1 | 16.1% |
Ratios
|
|---|
| Revenue growth | 46.8% | 15.0% | 24.5% | -100.0% | 19.2% | |
| EBITDA growth | 0.5% | | | -99.9% | -16.9% | |
| Gross Margin | 43.0% | 38.8% | 40.6% | 75.1% | 75.9% | 0.7% |
| EBITDA Margin | 55.3% | 0.0% | 46.6% | 88.2% | 61.5% | -26.7% |
| Net Income Margin | 28.3% | 24.9% | 24.1% | 56.3% | 36.4% | -19.9% |
| SG&A, % of revenue | 10.6% | 11.8% | 10.6% | 28.3% | 42.9% | 14.6% |
| CAPEX, % of revenue | 24.1% | 44.1% | 36.0% | 1.4% | 1.4% | -0.0% |
| ROIC | 19.6% | 12.3% | 14.4% | 5.5% | 4.5% | -1.1% |
| ROE | 25.3% | 19.0% | 18.0% | 4.7% | 3.4% | -1.2% |
| Net Debt/EBITDA | 1.3x | | 2.1x | 0.1x | -0.2x | -0.3x |
Revenue and profitability
Dalian Wanda Commercial Properties Co Ltd's Revenue jumped on 19.2%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 26.7 pp from 88.2% to 61.5% in 2017.
Gross Margin increased slightly on 0.73 pp from 75.1% to 75.9% in 2017. SG&A as a % of Revenue surged on 14.6 pp from 28.3% to 42.9% in 2017.
Net Income marign dropped on 19.9 pp from 56.3% to 36.4% in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 Dalian Wanda Commercial Properties Co Ltd had CAPEX/Revenue of 1.4%. Dalian Wanda Commercial Properties Co Ltd's CAPEX/Revenue dropped on 42.7 pp from 44.1% in 2014 to 1.4% in 2017. For the last three years the average CAPEX/Revenue was 13.0%.
Return on investment
The company operates at low ROIC (4.47%) and ROE (3.43%). ROIC decreased slightly on 1.1 pp from 5.5% to 4.5% in 2017. ROE decreased slightly on 1.2 pp from 4.7% to 3.4% in 2017.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.8x. Net Debt / EBITDA dropped on 0.3x from 0.1x to -0.2x in 2017. Debt dropped on 32.0% while cash decreased slightly on 0.60%.
Appendix 1: Peers in Real Estate
Below you can find Dalian Wanda Commercial Properties Co 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 | 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) | 13.0% | 5.1% | 4.1% | 10.3% | 9.8% |
|---|
| Dalian Wanda Commercial Properties Co Ltd ($3699) | | 15.0% | 24.5% | -100.0% | 19.2% |
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) | 41.1% | 39.2% | 38.2% | 41.9% | 33.4% |
|---|
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 43.0% | 38.8% | 40.6% | 75.1% | 75.9% |
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% | 26.9% | 23.2% | 29.0% | 36.0% |
|---|
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 55.3% | | 46.6% | 88.2% | 61.5% |
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% | 4.0% | 2.8% |
|---|
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 24.1% | 44.1% | 36.0% | 1.4% | 1.4% |
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% | |
| China Resources Land Ltd ($1109) | 14.7% | 13.5% | 13.9% | 14.4% | 15.4% |
| 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% | |
| |
|---|
| Median (137 companies) | 4.0% | 4.0% | 2.5% | 3.4% | 14.2% |
|---|
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 19.6% | 12.3% | 14.4% | 5.5% | 4.5% |
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 |
|---|
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 1.3x | | 2.1x | 0.1x | -0.2x |
