Sunlight Real Estate Investment (0435) AI Stock Analysis

• Market Cap: HK$3.74B
• Dividend Yield: 6.26%
• Average Volume (3M): 1.94M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.58
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 137
• Sector: Real Estate
• Sector Strength: 69
• Industry: REIT - Diversified
• EPS (TTM): N/A
• Shares Outstanding: 1,738,437,300
• 10 Day Avg. Volume: 2,077,940
• 30 Day Avg. Volume: 1,936,693
• PEG Ratio: 1.34
• Price to Book (P/B): 0.36
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.03
• 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$2.43
• Price Target Upside: 13.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 71 Outperform
• Price Target: HK$2.50 ▲(16.28%Upside)

Sunlight Real Estate Investment has a stable financial performance, strong technical indicators, and an attractive dividend yield, contributing to an overall positive outlook. The financial stability and high yield are key strengths, while cash flow challenges and potential overbought conditions may pose risks.

Positive Factors

Dividend Yield

Offers attractive dividend yield of more than 9.5%, maintaining a BUY recommendation.

Market Sentiment

Stronger traffic from same-day travellers is expected to boost sentiment towards the counter.

Valuation

The stock's valuation is seen as attractive, with REIT Connect potentially driving the unit price higher.

Negative Factors

Office Leasing

Heightened global macro uncertainties would dampen office leasing demand.

Rental Earnings

Negative rental reversion has impacted office rental earnings.

Retail Market Risks

Any derailment of retail market recovery would impact leasing demand for retail space, posing a risk to the REIT.

Sunlight Real Estate Investment Business Overview & Revenue Model

Company Description

Sunlight REIT (Stock code: 435) is a real estate investment trust authorized by the Securities and Futures Commission and constituted by the trust deed dated 26 May 2006 (as amended and supplemented by six supplemental deeds) (the "Trust Deed"), and has been listed on The Stock Exchange of Hong Kong Limited on 21 December 2006. Sunlight REIT offers investors the opportunity to invest in a diversified portfolio of 11 office and five retail properties in Hong Kong with a total gross rentable area of over 1.2 million sq. ft.. The office properties are primarily located in core business areas, including Wan Chai and Sheung Wan, as well as in decentralized business areas such as Mong Kok and North Point. The key retail properties are situated in regional transportation hubs and new towns including Sheung Shui, Tseung Kwan O and Yuen Long.

How the Company Makes Money

Sunlight Real Estate Investment makes money through a combination of rental income, property sales, and property management services. The company generates significant revenue by leasing its commercial and residential properties to tenants, ensuring a steady stream of rental income. Additionally, Sunlight Real Estate Investment engages in the strategic acquisition and development of properties, which are later sold at a profit. The company may also earn income from property management services offered to third-party property owners, leveraging its expertise in maintaining and enhancing the value of real estate assets. Key partnerships with real estate developers and financial institutions may further bolster its revenue streams, providing access to prime property opportunities and favorable financing terms.

Sunlight Real Estate Investment Financial Statement Overview

Summary

Sunlight Real Estate Investment exhibits a stable financial position with strong profitability margins and a conservative balance sheet. The company has shown resilience in revenue growth and profitability recovery, yet faces challenges in cash flow management. Monitoring operational efficiency and cash flow sustainability will be crucial for future financial health.

Income Statement

Sunlight Real Estate Investment has shown stable revenue growth with a 5.42% increase from the previous year. The gross profit margin remains strong at 78.55%, and the net profit margin has improved significantly from a negative value to 18.67% in 2024. However, the EBIT and EBITDA margins are slightly lower compared to previous years, indicating increased operational costs.

Balance Sheet

The company's balance sheet is stable, with a debt-to-equity ratio of 0.36, indicating conservative leverage. The equity ratio is strong at 70.81%, suggesting a solid financial foundation. However, there is a slight decline in stockholders' equity over time, which may need to be monitored.

Cash Flow

Operating cash flow has decreased, yet remains positive, reflecting the company's ability to generate cash from operations. Free cash flow growth is negative, indicating challenges in maintaining cash reserves. The operating cash flow to net income ratio is positive, suggesting efficient cash conversion from earnings.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
852.88M	809.00M	811.13M	808.06M	865.35M
	Gross Profit
669.95M	649.53M	650.07M	648.40M	695.47M
	EBIT
562.54M	544.21M	543.96M	539.92M	584.54M
	EBITDA
563.25M	517.39M	543.98M	-71.42M	-563.58M
	Net Income Common Stockholders
159.24M	-28.43M	102.94M	-233.68M	-751.39M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
445.49M	485.24M	630.99M	623.30M	499.43M
	Total Assets
19.06B	19.22B	18.96B	19.20B	19.67B
	Total Debt
4.83B	4.87B	4.29B	4.40B	4.24B
	Net Debt
4.82B	4.86B	4.23B	4.36B	4.19B
	Total Liabilities
5.56B	5.55B	4.91B	5.08B	4.90B
	Stockholders Equity
13.50B	13.67B	14.05B	14.12B	14.77B
Cash Flow		Free Cash Flow
317.79M	404.01M	409.26M	452.12M	386.31M
	Operating Cash Flow
317.79M	404.06M	409.27M	452.21M	439.03M
	Investing Cash Flow
14.03M	-684.37M	100.25M	-318.22M	32.45M
	Financing Cash Flow
-350.26M	206.03M	-416.65M	-274.55M	-456.01M

Sunlight Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0435, the sentiment is Positive. The current price of 2.15 is above the 20-day moving average (MA) of 2.08, above the 50-day MA of 1.98, and above the 200-day MA of 1.84, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 71.33 is Negative, neither overbought nor oversold. The STOCH value of 94.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0435.

Sunlight Real Estate Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0435	71 Outperform	HK$3.74B	20.53	1.17%	6.26%	―	―
Sector *	61 Neutral	$2.83B	10.72	0.40%	6.10%	5.80%	-21.26%
PREUF		$263.42M	―	-1.09%	8.63%	―	―
SGRRF			―	-0.78%	―	―	―
YUXXF		$523.97M	―	-2.11%	5.57%	―	―
8ET		€265.90M	28.49	-7.37%	11.11%	―	―
87001	55 Neutral	¥3.23B	―	-3.39%	0.44%	-3.16%	-28.30%