Yuexiu Real Estate Investment (0405) AI Stock Analysis

• Market Cap: HK$4.32B
• Dividend Yield: 6.58%
• Average Volume (3M): 3.77M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.12
• Revenue Growth: -5.33%
• EPS Growth: -2880.00%
• Country: HK
• Employees: 726
• Sector: Real Estate
• Sector Strength: 55
• Industry: REIT - Diversified
• EPS (TTM): -0.07
• Shares Outstanding: 5,141,086,400
• 10 Day Avg. Volume: 3,799,593
• 30 Day Avg. Volume: 3,768,933
• PEG Ratio: 0.09
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.64
• 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: HK$1.02
• Price Target Upside: 21.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: HK$1.00 ▲(19.05%Upside)

The overall stock score is primarily driven by strong technical analysis, showing positive price momentum. Despite operational efficiency and positive cash flows, financial performance is weighed down by recent net losses. The valuation is mixed, with a high dividend yield but negative earnings, reflecting the company's current challenges.

Positive Factors

Asset Management

Revitalizing quality assets has led to successful leasing rates for converted units, even in a challenging market.

Interest Rate and Policy

Onshore and offshore interest rate cuts and potential progress of REIT Connect could drive future growth.

Leadership Transition

The newly appointed CEO, Ms. Ou, has been a key operational figure since 2019, ensuring a smooth leadership transition.

Negative Factors

Distribution and Financial Performance

FY24 distribution per unit fell short of expectations due to an unexpected cut in the distribution ratio to preserve capital.

Market Challenges

The China office market, which forms a significant part of Yuexiu REIT's portfolio, is under pressure due to a weak macro environment and new supply.

Supply-Demand Imbalance

A high level of office supply until 2026 in the REIT's key markets may impact overall performance negatively.

Yuexiu Real Estate Investment Business Overview & Revenue Model

Company Description

Yuexiu Real Estate Investment Trust (0405), commonly known as Yuexiu REIT, is a prominent real estate investment trust listed on the Hong Kong Stock Exchange. The company primarily focuses on investing in commercial properties, including office buildings, shopping malls, and hotels, primarily located in Guangzhou, China. As a REIT, Yuexiu REIT aims to provide investors with stable income distributions derived from its property portfolio.

How the Company Makes Money

Yuexiu REIT generates revenue primarily through rental income from its portfolio of commercial properties. The trust earns money by leasing office spaces, retail units, and rooms in its hotels to tenants. Additionally, Yuexiu REIT benefits from property appreciation and capital gains realized through the strategic acquisition and disposal of assets. The trust may also engage in property development or redevelopment projects to enhance the value of its portfolio. Significant partnerships with property management companies and local authorities can also contribute to operational efficiencies and increased profitability for the trust.

Yuexiu Real Estate Investment Financial Statement Overview

Summary

Yuexiu Real Estate Investment demonstrates operational efficiency with strong EBIT and EBITDA margins. However, recent net losses pose risks to profitability and equity returns. The balance sheet remains stable with a manageable leverage profile, while cash flows are positive, indicating strong cash management.

Income Statement

The income statement shows fluctuating revenue over recent years with a decline in total revenue from 2023 to 2024. Gross Profit Margin remains solid, indicating efficient cost management relative to revenue. However, the company faced a net loss in 2024, which negatively impacted the Net Profit Margin. EBIT and EBITDA margins are relatively strong, suggesting operational efficiency despite the net loss.

Balance Sheet

The balance sheet reflects a stable equity base with a moderate Debt-to-Equity Ratio, indicating manageable leverage. However, there's a slight decrease in Stockholders' Equity from 2023 to 2024. The Equity Ratio is stable, suggesting a balanced capital structure. Return on Equity is negative in 2024 due to the net loss, which is a point of concern.

Cash Flow

Cash flow analysis indicates positive operating cash flow in 2024, though decreased from 2023. Free cash flow remains positive despite negative net income, highlighting strong cash generation capabilities. The Operating Cash Flow to Net Income and Free Cash Flow to Net Income ratios suggest that the company is generating cash effectively relative to its net income.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.03B	2.09B	1.87B	1.80B	1.76B
Gross Profit	1.43B	1.67B	1.31B	1.30B	1.31B
EBITDA	1.18B	1.30B	424.21M	1.41B	1.38B
Net Income	-320.58M	4.63M	-529.04M	645.00M	565.50M
Balance Sheet
Total Assets	43.28B	43.85B	43.87B	43.86B	36.26B
Cash, Cash Equivalents and Short-Term Investments	1.40B	1.24B	1.37B	1.45B	1.80B
Total Debt	20.59B	20.28B	19.94B	17.63B	14.02B
Total Liabilities	42.10B	27.01B	26.54B	27.94B	20.49B
Stockholders Equity	14.83B	15.63B	16.10B	14.72B	14.58B
Cash Flow
Free Cash Flow	202.91M	428.81M	338.72M	756.79M	666.11M
Operating Cash Flow	218.65M	451.11M	354.14M	774.54M	694.83M
Investing Cash Flow	22.17M	-91.81M	-3.71B	-4.16B	-12.74M
Financing Cash Flow	-269.98M	-276.98M	3.27B	3.04B	-198.60M

Yuexiu Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0405, the sentiment is Positive. The current price of 0.84 is above the 20-day moving average (MA) of 0.82, above the 50-day MA of 0.77, and below the 200-day MA of 0.88, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 59.32 is Neutral, neither overbought nor oversold. The STOCH value of 56.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0405.

Yuexiu Real Estate Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6626	75 Outperform	€4.42B	11.67	10.03%	5.65%	17.83%	-28.88%
0435	74 Outperform	$4.02B	20.53	1.17%	8.05%	―	―
87001	61 Neutral	¥3.65B	―	-3.39%	0.39%	-3.16%	-28.30%
87001	61 Neutral	¥3.65B	―	-3.39%	0.39%	-3.16%	-28.30%
0808	59 Neutral	$2.19B	―	-1.09%	8.00%	-5.60%	-1261.11%
0405	58 Neutral	HK$4.32B	―	-2.11%	6.58%	-5.33%	-2880.00%
1426	57 Neutral	HK$2.54B	43.06	-0.78%	8.94%	-5.67%	40.95%
Sector *	53 Neutral	$1.19B	3.43	0.13%	7.15%	-2.13%	-128.06%