Yuexiu Real Estate Investment (0405) AI Stock Analysis

• Market Cap: $4.73B
• Dividend Yield: 7.08%
• Average Volume (3M): 4.00M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.12
• Revenue Growth: -6.57%
• EPS Growth: -390.60%
• Country: HK
• Employees: 726
• Sector: Real Estate
• Sector Strength: 44
• Industry: REIT - Diversified
• EPS (TTM): -0.07
• Shares Outstanding: 5,141,086,400
• 10 Day Avg. Volume: 4,033,889
• 30 Day Avg. Volume: 4,003,399
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 5.62
• Enterprise Value/Revenue: 13.08
• Enterprise Value/Gross Profit: 18.63
• Enterprise Value/Ebitda: 22.53
• 1Y Price Target: $1.09
• Price Target Upside: 15.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: HK$1.00 ▲(5.26% Upside)

The stock score is primarily influenced by solid operational efficiency and bullish technical indicators. However, the lack of profitability and negative P/E ratio weigh down the valuation. The high dividend yield provides some appeal, but the company must address its net losses to improve its financial health.

Positive Factors

Asset Enhancement

Asset enhancement initiatives at IFC and Yuexiu Financial Tower are poised to improve tenant acquisition and drive above-market performance.

Debt Management

Yuexiu REIT has been actively managing its offshore debt and floating rate exposure, having reduced its non-RMB debt exposure from 61% to 40% and floating rate debt from 48% down to 26%.

Financial Performance

1H25 DPU above expectations, thanks to better-than-expected rental margins, cost control and a lift in distribution ratio to 100% on the REIT's 20th listing anniversary.

Negative Factors

Distribution Performance

FY24 DPU missed expectations on an unexpected cut in distribution ratio to preserve capital.

Office Market Challenges

Overall office portfolio remained suppressed by sizeable entry of new supply in key markets alongside weak leasing demand.

Supply and Demand Imbalance

Office weakness to persist due to supply-demand imbalance in the REIT’s key markets; cut FY25-26F DPU by 39-40% on revised distribution ratio and rental assumptions.

Yuexiu Real Estate Investment Business Overview & Revenue Model

Company Description

Yuexiu Real Estate Investment Trust ("Yuexiu REIT") was listed on the Hong Kong Stock Exchange of Hong Kong Limited on 21 December 2005 and is the first listed real estate investment trust only investing in properties in the People's Republic of China (the "PRC") in the world. Yuexiu REIT focuses on office, retail and other commercial purposes, strives for properties which can bring considerable cash flows and returns and identifies business opportunities for achieving higher revenue growth through the optimization of its operations. The current property portfolio comprises eight high quality properties, namely White Horse Building, Fortune Plaza, City Development Plaza, Victory Plaza, Guangzhou International Finance Center in Guangzhou, Yuexiu Tower in Shanghai, Wuhan Properties in Wuhan and Victory Business Centre in Hangzhou, with a total area of ownership of approximately 973,001 square metres. All properties are located in the central business district ("CBD") of Guangzhou, Shanghai, Wuhan and Hangzhou respectively. The categories of the properties include professional clothing market, Grade-A offices, multiple functional commercial offices, retail business, hotel and serviced apartments etc. The Manager of Yuexiu REIT is Yuexiu REIT Asset Management Limited ("Manager"). Yuexiu REIT is managed by an experienced professional team with extensive experience in real estate management, asset management and the securities market and brings long-term and steady investment incomes to the Unitholders ("Unitholders") of Yuexiu REIT through actively managing its assets and expanding its operations. While the real estate investment trust market is flourishing, the Manager is committed to becoming a professional asset management institution with a focus on the PRC commercial property market, continuing asset appreciation capability, commercial operation capability, capital operation capability and a leading position in the industry.

How the Company Makes Money

Yuexiu REIT generates revenue primarily through leasing income from its portfolio of commercial properties, which include office spaces, retail centers, and hotels. The company benefits from long-term lease agreements with tenants, providing a stable and recurring income stream. Additionally, Yuexiu REIT may engage in property development or redevelopment projects to enhance the value of its assets, thereby increasing rental income potential. Strategic acquisitions of new properties can also contribute to growth in revenue. The company may also form partnerships or joint ventures to leverage market opportunities and enhance its asset base. Furthermore, Yuexiu REIT's revenue is influenced by factors such as property market conditions, occupancy rates, and rental price trends in the regions where it operates.

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: 0.95
• 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:0405, the sentiment is Positive. The current price of 0.95 is above the 20-day moving average (MA) of 0.92, above the 50-day MA of 0.87, and above the 200-day MA of 0.86, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 62.79 is Neutral, neither overbought nor oversold. The STOCH value of 72.50 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
0405	64 Neutral	$4.73B	―	-4.08%	7.08%	-6.57%	-390.60%
Sector *	62 Neutral	$6.87B	13.23	-1.00%	7.29%	3.62%	-23.52%
PREUF	―	$286.23M	―	-2.04%	11.67%	―	―
SGRRF	―		―	-0.78%	―	―	―
SHTRF	―	$520.96M	31.67	1.17%	27.07%	―	―
5R9	―	€488.83M	10.81	10.03%	―	―	―
87001	51 Neutral	¥3.33B	―	-3.62%	0.80%	-8.25%	-55.79%