Sun Hung Kai Properties (0016) AI Stock Analysis

• Market Cap: $262.39B
• Dividend Yield: 4.2%
• Average Volume (3M): 4.12M
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.69
• Revenue Growth: 20.91%
• EPS Growth: -29.29%
• Country: HK
• Employees: 40,000
• Sector: Real Estate
• Sector Strength: 55
• Industry: Real Estate - Development
• EPS (TTM): 3.61
• Shares Outstanding: 2,897,780,300
• 10 Day Avg. Volume: 5,985,987
• 30 Day Avg. Volume: 4,117,088
• PEG Ratio: -1.85
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.21
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $87.68
• Price Target Upside: -3.16% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: HK$93.00 ▲(2.71%Upside)

The overall stock score for Sun Hung Kai Properties is driven primarily by its strong financial performance and positive technical indicators. The company's robust balance sheet and attractive dividend yield also contribute positively, although declining revenue and profit margins pose some risks.

Positive Factors

Financial Performance

Underlying profit rose 18% due to higher development earnings and gains on land resumption and sale.

Sales Performance

All 318 units at Sierra Sea Ph 1 A (2) on public offer were sold out on the first day of sale, highlighting strong market demand.

Valuation

The stock is trading at a 67% discount to the appraised current NAV, which is attractive on a historical basis.

Negative Factors

Market Demand

Any further deterioration in property demand in Hong Kong and China could drag its earnings and share price performance.

Sun Hung Kai Properties Business Overview & Revenue Model

Company Description

Sun Hung Kai Properties Limited (0016) is one of the largest property developers in Hong Kong, known for its comprehensive portfolio encompassing residential, commercial, and industrial properties. The company's core services include property development, property investment, and hotel operations, with a strong emphasis on delivering high-quality construction and innovative designs. Beyond real estate, Sun Hung Kai Properties also invests in telecommunications, transportation, and infrastructure projects, enhancing its diversified business model.

How the Company Makes Money

Sun Hung Kai Properties generates revenue through several key streams. The primary source is property development, where the company constructs and sells residential, commercial, and industrial properties. Profits are realized from the sale of these properties in Hong Kong and mainland China. Additionally, the company earns significant income from property investment by leasing out its extensive portfolio of office buildings, shopping malls, and industrial properties, providing a stable and recurring revenue source. Sun Hung Kai Properties also operates a number of hotels, contributing to its earnings through hospitality services. Furthermore, the company benefits from its investments in telecommunications and infrastructure, adding to its diversified income streams. Strategic partnerships and joint ventures in various sectors further bolster its financial performance.

Sun Hung Kai Properties Financial Statement Overview

Summary

Sun Hung Kai Properties demonstrates solid financial health with strong profitability and a robust balance sheet. Despite some declining revenue and profit margins over the years, the company maintains low financial leverage and strong cash flow generation.

Income Statement

The company shows stable revenue with a slight growth of 2.1% from the previous year, though revenue has declined over a longer period. The gross profit margin stands at 46.4%, and the net profit margin is 26%, both indicating strong profitability. However, both EBIT and EBITDA margins have seen slight decreases compared to historical levels, which may suggest pressure on operational efficiency.

Balance Sheet

The balance sheet reflects solid equity with an equity ratio of 74.2%, indicating a strong capital structure. The debt-to-equity ratio is 0.21, suggesting low financial leverage and reduced risk. Return on equity is healthy at 3.1%, albeit lower than previous years, implying potential challenges in maximizing shareholder returns.

Cash Flow

Operating cash flow remains robust, covering net income comfortably with a 1.29 ratio. Free cash flow has decreased by 8.1% from the previous year, but the company's ability to generate cash is still strong. The free cash flow to net income ratio stands at 1.04, highlighting good cash conversion.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	85.21B	71.51B	71.76B	78.50B	85.24B	83.49B
Gross Profit	35.20B	32.21B	34.95B	40.53B	44.73B	42.96B
EBITDA	32.18B	31.57B	32.47B	37.52B	42.16B	40.04B
Net Income	17.00B	19.05B	23.91B	25.56B	26.75B	23.69B
Balance Sheet
Total Assets	811.11B	818.09B	805.99B	807.57B	796.42B	797.83B
Cash, Cash Equivalents and Short-Term Investments	15.12B	16.97B	15.89B	21.02B	23.16B	32.53B
Total Debt	123.05B	129.65B	128.05B	126.77B	118.61B	118.06B
Total Liabilities	201.67B	207.02B	199.19B	200.82B	196.79B	211.23B
Stockholders Equity	605.05B	606.72B	602.05B	601.95B	593.82B	571.81B
Cash Flow
Free Cash Flow	35.51B	19.89B	21.65B	11.16B	12.60B	44.69B
Operating Cash Flow	39.90B	24.52B	26.14B	15.19B	15.81B	47.67B
Investing Cash Flow	-7.24B	-9.61B	-16.06B	-9.52B	-9.59B	-39.69B
Financing Cash Flow	-25.37B	-13.11B	-13.66B	-8.84B	-16.79B	2.12B

Sun Hung Kai Properties Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 90.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0016, the sentiment is Positive. The current price of 90.55 is above the 20-day moving average (MA) of 86.48, above the 50-day MA of 81.20, and above the 200-day MA of 76.52, indicating a bullish trend. The MACD of 2.52 indicates Negative momentum. The RSI at 65.37 is Neutral, neither overbought nor oversold. The STOCH value of 75.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0016.

Sun Hung Kai Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1109	76 Outperform	$190.40B	6.87	9.66%	9.15%	9.97%	-19.80%
1113	74 Outperform	$122.32B	8.99	3.52%	4.46%	-3.04%	-20.01%
0016	73 Outperform	$262.39B	15.06	2.88%	4.20%	20.91%	-29.29%
0688	70 Neutral	$149.73B	8.83	4.15%	4.38%	-10.21%	-40.22%
0083	69 Neutral	HK$77.41B	20.36	2.17%	1.77%	-30.38%	-43.73%
Sector *	59 Neutral	C$1.23B	0.76	-8.20%	5.62%	9.89%	-25.14%
2202	47 Neutral	$78.94B	―		13.43%	-32.30%	-620.87%

Sun Hung Kai Properties Corporate Events

Sun Hung Kai Properties Sees Rise in Underlying Profit Amidst Rental Income Decline

Sun Hung Kai Properties reported an increase in underlying profit attributable to shareholders for the six months ending December 31, 2024, reaching HK$10,463 million, up from HK$8,906 million in the previous year. Despite a decrease in reported profit due to fair value changes in investment properties, the company maintained its interim dividend at HK$0.95 per share. The company achieved HK$2,506 million in profit from property sales and recorded contracted sales of approximately HK$25,500 million. However, rental income saw a slight decline, with gross rental income decreasing by 1% and net rental income by 3% year-on-year. The company also expanded its land bank by acquiring two new residential sites, totaling 465,000 square feet, to support its medium-term development needs.

Sun Hung Kai Properties Declares Interim Dividend for 2024

Sun Hung Kai Properties has announced an interim cash dividend of HKD 0.95 per share for the six months ending December 31, 2024. This announcement reflects the company’s ongoing commitment to providing returns to its shareholders and may have implications for its market positioning and stakeholder relations, as it demonstrates financial stability and confidence in future operations.