China Overseas Land & Investment Ltd reports 10.1% Net Income growth in 2017 and 3.3% Revenue growth
26/03/2018 • About China Overseas Land & Investment Ltd (
$688) • By InTwits
China Overseas Land & Investment Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Overseas Land & Investment Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 4,631 in 2017, 3,273 in 2016, 2,419 in 2015, 6,258 in 2014, 4,577 in 2013
- The company has highly profitable business model: ROIC is at 12.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Overseas Land & Investment Ltd ($688) key annual financial indicators
| mln. HKD | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 82,469 | 130,957 | 140,131 | 158,717 | 163,972 | 3.3% |
| Gross Profit | 26,822 | 39,310 | 42,312 | 45,643 | 54,700 | 19.8% |
| SG&A | 2,817 | 3,990 | 4,213 | 6,551 | 5,798 | -11.5% |
| EBITDA | 27,785 | 43,067 | 46,170 | 57,278 | 59,083 | 3.2% |
| Net Income | 23,044 | 27,200 | 33,312 | 37,021 | 40,767 | 10.1% |
Balance Sheet
|
|---|
| Cash | 40,876 | 58,281 | 100,573 | 157,162 | 104,051 | -33.8% |
| Short Term Debt | 4,145 | 22,666 | 7,269 | 40,286 | 30,424 | -24.5% |
| Long Term Debt | 69,397 | 75,890 | 109,271 | 133,534 | 147,815 | 10.7% |
Cash flow
|
|---|
| Capex | 4,577 | 6,258 | 2,419 | 3,273 | 4,631 | 41.5% |
Ratios
|
|---|
| Revenue growth | 27.7% | 58.8% | 7.0% | 13.3% | 3.3% | |
| EBITDA growth | 3.8% | 55.0% | 7.2% | 24.1% | 3.2% | |
| Gross Margin | 32.5% | 30.0% | 30.2% | 28.8% | 33.4% | 4.6% |
| EBITDA Margin | 33.7% | 32.9% | 32.9% | 36.1% | 36.0% | -0.1% |
| Net Income Margin | 27.9% | 20.8% | 23.8% | 23.3% | 24.9% | 1.5% |
| SG&A, % of revenue | 3.4% | 3.0% | 3.0% | 4.1% | 3.5% | -0.6% |
| CAPEX, % of revenue | 5.5% | 4.8% | 1.7% | 2.1% | 2.8% | 0.8% |
| ROIC | 15.1% | 18.5% | 15.4% | 13.0% | 12.8% | -0.2% |
| ROE | 23.4% | 22.3% | 20.5% | 17.1% | 16.7% | -0.4% |
| Net Debt/EBITDA | 1.2x | 0.9x | 0.3x | 0.3x | 1.3x | 1.0x |
Revenue and profitability
The company's Revenue increased on 3.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.
Gross Margin increased on 4.6 pp from 28.8% to 33.4% in 2017. SG&A as a % of Revenue decreased slightly on 0.59 pp from 4.1% to 3.5% in 2017.
Net Income marign increased slightly on 1.5 pp from 23.3% to 24.9% in 2017.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.8% in 2017. The company's CAPEX/Revenue decreased slightly on 2.0 pp from 4.8% in 2014 to 2.8% in 2017. It's average level of CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at good ROIC (12.81%) and ROE (16.71%). ROIC showed almost no change in 2017. ROE showed almost no change in 2017.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA jumped on 1.0x from 0.3x to 1.3x in 2017. Debt increased on 2.5% while cash dropped on 33.8%.
Valuation
The company's trades at EV/EBITDA 6.3x and P/E 7.3x.
Appendix 1: Peers in Real Estate
Below you can find China Overseas Land & Investment 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) | 12.4% | 5.1% | 4.1% | 9.9% | 33.1% |
|---|
| China Overseas Land & Investment Ltd ($688) | | 58.8% | 7.0% | 13.3% | 3.3% |
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% | 38.2% |
|---|
| China Overseas Land & Investment Ltd ($688) | 32.5% | 30.0% | 30.2% | 28.8% | 33.4% |
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% | 33.0% |
|---|
| China Overseas Land & Investment Ltd ($688) | 33.7% | 32.9% | 32.9% | 36.1% | 36.0% |
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% | 3.3% | 4.0% | 3.1% |
|---|
| China Overseas Land & Investment Ltd ($688) | 5.5% | 4.8% | 1.7% | 2.1% | 2.8% |
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% | |
| 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% | 11.4% |
|---|
| China Overseas Land & Investment Ltd ($688) | 15.1% | 18.5% | 15.4% | 13.0% | 12.8% |
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 | 1.6x |
|---|
| China Overseas Land & Investment Ltd ($688) | 1.2x | 0.9x | 0.3x | 0.3x | 1.3x |
