Nam Tai Property, Inc. :NTP-US: Earnings Analysis: Q1, 2017 By the Numbers : May 5, 2017

Nam Tai Property, Inc. reports financial results for the quarter ended March 31, 2017.

We analyze the earnings along side the following peers of Nam Tai Property, Inc. – Sanmina-SCI Corporation, Celestica Inc., Blackstone Mortgage Trust, Inc. Class A and Alexandria Real Estate Equities, Inc. (SANM-US, CLS-US, BXMT-US and ARE-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 3.07 million, Net Earnings of USD 1.98 million.
  • Gross margins widened from 82.03% to 97.52% compared to the same period last year, operating (EBITDA) margins now 37.85% from -6.67%.
  • Year-on-year change in operating cash flow of 357.01% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 3.07 2.01 1.88 1.93 2.5
Revenue Growth (%YOY) 22.6 0.65 -28.87 -37.21 -25.61
Earnings (mil) 1.98 -5.07 -1.15 -2.51 -0.17
Earnings Growth (%YOY) 1278.57 -6.15 86.87 -373.04 -318.18
Net Margin (%) 64.5 -252.79 -61.28 -130.02 -6.71
EPS 0.05 -0.14 -0.04 -0.07 -0.01
Return on Equity (%) 3.33 -8.25 -1.79 -3.83 -0.25
Return on Assets (%) 3.18 -8.01 -1.76 -3.76 -0.25

Access our Ratings and Scores for Nam Tai Property, Inc.

Market Share Versus Profits

Revenues History
Earnings History

NTP-US‘s change in revenue this period compared to the same period last year of 22.60% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that NTP-US is holding onto its market share. Also, for comparison purposes, revenues changed by 53.04% and earnings by 139.05% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 82.03% to 97.52% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from -6.67% to 37.85% compared to the same period last year. For comparison, gross margins were 100% and EBITDA margins were -0.60% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

NTP-US‘s change in operating cash flow of 357.01% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -6.67% to 35.37% and (2) one-time items. The company’s pretax margins are now 64.50% compared to -6.71% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Nam Tai Property, Inc.

Company Profile

Nam Tai Property, Inc. is a holding company, which engages in property development and management. Its activities include the re-development of two parcels of land in Gushu and Guangming, Shenzhen, China, by converting those two parcels of land that formally housed its manufacturing facilities into commercial complexes. The company was founded by Ming Kown Koo in 1975 and is headquartered in Shenzhen, China.

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