China Vanke Co Ltd EBITDA jumped on 74.0% and EBITDA Margin jumped on 10.1 pp from 16.8% to 26.9%
26/03/2018 • About China Vanke Co Ltd (
$2202) • By InTwits
China Vanke Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Vanke Co Ltd is a fast growth stock: 2017 revenue growth was 8.6%, 5 year revenue CAGR was 19.6% at 2017 ROIC 18.0%
- China Vanke Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 4.2%.
- CAPEX is quite volatile: 3,262 in 2017, 1,620 in 2016, 1,427 in 2015, 1,738 in 2014, 1,950 in 2013
- The company has highly profitable business model: ROIC is at 18.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Vanke Co Ltd ($2202) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 123,874 | 137,994 | 177,569 | 218,498 | 237,345 | 8.6% |
| Gross Profit | 31,076 | 34,635 | 39,418 | 48,756 | 76,723 | 57.4% |
| SG&A | 6,868 | 8,508 | 8,884 | 11,961 | 15,895 | 32.9% |
| EBITDA | 24,327 | 29,048 | 30,754 | 36,749 | 63,931 | 74.0% |
| Net Income | 15,119 | 15,746 | 18,119 | 21,023 | 28,052 | 33.4% |
Balance Sheet
|
|---|
| Cash | 43,004 | 61,653 | 51,748 | 79,490 | 164,326 | 106.7% |
| Short Term Debt | 47,408 | 22,832 | 43,391 | 46,954 | 62,273 | 32.6% |
| Long Term Debt | 44,082 | 46,149 | 52,844 | 85,514 | 128,352 | 50.1% |
Cash flow
|
|---|
| Capex | 2,439 | 1,831 | 2,063 | 2,147 | 2,360 | 10.0% |
Ratios
|
|---|
| Revenue growth | 27.9% | 11.4% | 28.7% | 23.1% | 8.6% | |
| EBITDA growth | -5.2% | 19.4% | 5.9% | 19.5% | 74.0% | |
| Gross Margin | 25.1% | 25.1% | 22.2% | 22.3% | 32.3% | 10.0% |
| EBITDA Margin | 19.6% | 21.1% | 17.3% | 16.8% | 26.9% | 10.1% |
| Net Income Margin | 12.2% | 11.4% | 10.2% | 9.6% | 11.8% | 2.2% |
| SG&A, % of revenue | 5.5% | 6.2% | 5.0% | 5.5% | 6.7% | 1.2% |
| CAPEX, % of revenue | 2.0% | 1.3% | 1.2% | 1.0% | 1.0% | 0.0% |
| ROIC | 13.5% | 14.6% | 14.1% | 13.7% | 18.0% | 4.3% |
| ROE | 21.5% | 19.1% | 19.2% | 19.7% | 22.8% | 3.1% |
| Net Debt/EBITDA | 2.0x | 0.3x | 1.4x | 1.4x | 0.4x | -1.0x |
China Vanke Co Ltd ($2202) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 17,238 | 47,412 | 43,007 | 123,613 | 29.2% | -14.1% | 6.8% | 10.8% |
| Net Income | 695 | 6,607 | 3,788 | 16,961 | -16.5% | 46.2% | 30.1% | 32.9% |
Balance Sheet
|
|---|
| Cash | 90,969 | 99,683 | 94,353 | 164,326 | 72.3% | 40.6% | 35.0% | 106.7% |
| Short Term Debt | 50,970 | 52,363 | 57,021 | 62,273 | 32.5% | 39.1% | 84.3% | 32.6% |
| Long Term Debt | 93,678 | 89,019 | 104,205 | 128,352 | 53.3% | 43.2% | 82.5% | 50.1% |
Ratios
|
|---|
| Gross Margin | 24.3% | 28.4% | 23.4% | 34.8% | -1.0% | 10.2% | 0.1% | 9.8% |
| Net Income Margin | 4.0% | 13.9% | 8.8% | 13.7% | -2.2% | 5.7% | 1.6% | 2.3% |
Revenue and profitability
China Vanke Co Ltd's Revenue increased on 8.6%. Revenue growth showed acceleration in 17Q4 - it increased 10.8% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 10.1 pp from 16.8% to 26.9% in 2017.
Gross Margin surged on 10.0 pp from 22.3% to 32.3% in 2017. SG&A as a % of Revenue increased slightly on 1.2 pp from 5.5% to 6.7% in 2017.
Net Income marign increased on 2.2 pp from 9.6% to 11.8% in 2017.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.99% in 2017. China Vanke Co Ltd showed almost no change in CAPEX/Revenue from 2014 to 2017. For the last three years the average CAPEX/Revenue was 1.0%.
Return on investment
The company operates at high and attractive ROE (22.80%) while ROIC is a bit lower (17.98%). ROIC increased on 4.3 pp from 13.7% to 18.0% in 2017. ROE increased on 3.1 pp from 19.7% to 22.8% in 2017.
Leverage (Debt)
Debt level is 0.4x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 1.4x to 0.4x in 2017. Debt surged on 43.9% while cash jumped on 107%.
Appendix 1: Peers in Real Estate
Below we provide China Vanke Co 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 (137 companies) | 12.4% | 5.2% | 4.2% | 10.1% | 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 (89 companies) | 41.8% | 39.1% | 38.2% | 42.2% | 36.1% |
|---|
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 (96 companies) | 28.5% | 26.9% | 23.4% | 29.2% | 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 (55 companies) | 6.1% | 4.7% | 3.3% | 3.8% | 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% | |
| 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 (138 companies) | 4.1% | 4.1% | 2.5% | 3.4% | 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 (83 companies) | 2.7x | 3.0x | 3.3x | 2.7x | 1.5x |
|---|
