Yuexiu Real Estate Investment (0405) AI Stock Analysis

• Market Cap: HK$4.31B
• Dividend Yield: 7.4%
• Average Volume (3M): 3.01M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.93
• Revenue Growth: -6.57%
• EPS Growth: -390.60%
• Country: HK
• Employees: 726
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Diversified
• EPS (TTM): -0.07
• Shares Outstanding: 5,258,969,000
• 10 Day Avg. Volume: 1,877,750
• 30 Day Avg. Volume: 3,014,080
• PEG Ratio: 0.02
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 2.18
• P/FCF Ratio: 10.00
• 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$0.91
• Price Target Upside: 7.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.07
• Revenue Forecast (FY): HK$1.95B

• Rating: 52 Neutral
• Price Target: HK$0.86 ▲(1.06% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is held back primarily by weak profitability (recent net losses) alongside a meaningfully leveraged balance sheet, which reduces financial flexibility. Offsetting factors include consistently positive operating/free cash flow and an attractive dividend yield, while technical indicators are broadly neutral with mild softness.

Positive Factors

Business model diversification

The firm earns from development sales, recurring rental income and property-management fees, creating multiple cash channels. This structural mix reduces reliance on any single cycle, smoothing cash flow across 2–6 months and providing resilience if new sales slow.

Consistent operating and free cash flow

Positive operating and free cash flow across the period is a durable strength: it sustains liquidity, funds working capital and routine capital needs, and supports distributions even when reported net income is weak, lowering short-term financing dependence.

Recent free cash flow improvement

An improvement in free cash flow in 2025 signals operational stabilization and better cash conversion. If the trend persists, it enhances the company’s ability to service debt or maintain payouts over the coming months, improving financial optionality versus prior periods.

Negative Factors

Elevated leverage

Debt materially exceeds equity, constraining financial flexibility. Elevated leverage increases interest expense sensitivity, raises refinancing risk and limits capacity for new projects or accelerated deleveraging, making the company vulnerable to slower sales or higher funding costs.

Weak and volatile profitability

Repeated net losses and declining revenue erode retained equity and reduce reinvestment capacity. Persistent below-the-line weakness undermines long-term earnings power, pressures margins and raises the risk that operating improvements may be needed before profitability normalizes.

Limited deleveraging capacity

Although cash generation exists, its magnitude is small versus total debt, meaning free cash flow cannot materially reduce leverage quickly. This limits balance-sheet repair, keeps refinancing risk elevated, and constrains investment or strategic flexibility.

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 Real Estate Investment generally generates earnings through multiple real-estate-driven income streams: (1) Property development sales: The core cash-generating activity is developing residential and/or commercial projects and recognizing revenue from the sale of completed (or qualifying) properties. Revenue is driven by project pipeline, sell-through rates, pricing, construction progress, and local property market conditions. (2) Rental income from investment properties: The company may hold certain commercial or other properties for long-term leasing, earning recurring rental and related property income; this stream depends on occupancy, lease terms, rental rates, and asset quality/location. (3) Property management and related services: Where it provides property management or ancillary services to projects or third parties, it earns service fees tied to contracted management scope and managed gross floor area. (4) Other real estate-related income and gains: The company may record income from dispositions of assets, revaluation changes on investment properties (accounting gains/losses), and other project- or asset-related items; the exact contribution can vary materially by period. (5) Financing and capital structure factors: As a real estate developer, profitability is influenced by funding costs (interest expense), access to debt/equity capital, and land acquisition and construction costs, which affect margins rather than being direct revenue. Significant partnerships or contributors to earnings such as specific joint ventures, major counterparties, or named strategic partners: null.

Yuexiu Real Estate Investment Financial Statement Overview

Summary

Earnings quality is weak with revenue flat-to-down and net losses in 2022, 2024, and 2025 (2025 weakest), while leverage is elevated (debt consistently above equity and equity trending lower). The main offset is consistently positive operating cash flow and free cash flow, including an improvement in 2025, but cash generation is still small relative to the debt load, limiting deleveraging capacity.

Income Statement

Revenue has been broadly flat to down recently (down in 2024 and more sharply in 2025), and profitability has deteriorated materially: net losses in 2022, 2024, and 2025 (with 2025 the weakest), after solid profits in 2020–2021. While gross margins remain relatively strong, the swing to negative net margins and the sharp step-down in operating profitability in 2025 point to weaker earnings quality and higher below-the-line pressure versus prior years.

Balance Sheet

The balance sheet is meaningfully leveraged for the period shown, with debt consistently exceeding equity (debt-to-equity roughly ~1.2–1.45). Equity has also trended lower since 2022, and returns on equity have been negative in recent years, reflecting the net losses. Total assets are relatively stable, but the combination of high leverage and weakening profitability reduces financial flexibility.

Cash Flow

Cash generation is a relative bright spot: operating cash flow and free cash flow are positive each year shown, and free cash flow improved in 2025 after a weaker 2024. Free cash flow has remained close to reported earnings in magnitude (and held up even when net income was negative), which supports liquidity; however, cash flow remains small relative to the company’s debt load (low operating cash flow coverage), limiting deleveraging capacity.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.83B	2.03B	2.09B	1.87B	1.80B
Gross Profit	1.00B	1.43B	1.67B	1.31B	1.30B
EBITDA	346.41M	1.18B	1.30B	424.21M	1.41B
Net Income	-641.46M	-320.58M	4.63M	-529.04M	645.00M
Balance Sheet
Total Assets	42.07B	43.28B	43.85B	43.87B	43.86B
Cash, Cash Equivalents and Short-Term Investments	6.64B	1.40B	1.24B	1.37B	1.48B
Total Debt	20.42B	20.59B	20.28B	19.94B	17.63B
Total Liabilities	26.81B	27.27B	27.01B	26.54B	27.94B
Stockholders Equity	14.10B	14.83B	15.63B	16.10B	14.72B
Cash Flow
Free Cash Flow	398.12M	202.91M	428.81M	338.72M	756.79M
Operating Cash Flow	434.89M	218.65M	451.11M	354.14M	774.54M
Investing Cash Flow	4.40B	22.17M	-91.81M	-3.71B	-4.16B
Financing Cash Flow	241.53M	-269.98M	-276.98M	3.27B	3.04B

Yuexiu Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 0.85 is above the 20-day moving average (MA) of 0.84, above the 50-day MA of 0.85, and below the 200-day MA of 0.86, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 38.39 is Neutral, neither overbought nor oversold. The STOCH value of 36.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	70 Outperform	HK$2.84B	4.13	8.86%	6.95%	5.13%	-38.76%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
0435	58 Neutral	$4.39B	-9.94	―	7.90%	―	―
0808	57 Neutral	HK$2.26B	-3.23	-2.04%	8.01%	-7.79%	-73.32%
0405	52 Neutral	HK$4.31B	-6.20	-4.08%	7.40%	-6.57%	-390.60%
1426	52 Neutral	HK$2.49B	-32.37	-2.11%	9.27%	-10.55%	-314.81%
87001	46 Neutral	¥3.26B	-2.04	-3.65%	0.54%	-8.25%	-55.79%