Fortune Real Estate Investment (0778) AI Stock Analysis

• Market Cap: $9.22B
• Dividend Yield: 1.07%
• Average Volume (3M): 2.90M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.60
• Revenue Growth: -2.76%
• EPS Growth: -238.04%
• Country: HK
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 63
• Industry: REIT - Retail
• EPS (TTM): -0.26
• Shares Outstanding: 2,043,802,200
• 10 Day Avg. Volume: 3,188,541
• 30 Day Avg. Volume: 2,903,540
• PEG Ratio: -0.16
• Price to Book (P/B): 0.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.33
• 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: $5.10
• Price Target Upside: 12.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 55 Neutral
• Price Target: HK$4.50 ▼(-0.44%Downside)

The stock's score is primarily influenced by its strong technical momentum and high dividend yield, despite negative financial performance indicators such as consistent net losses and a negative P/E ratio. The lack of earnings call insights and new corporate events did not affect the score.

Positive Factors

Distribution Yields

Fortune REIT offers distribution yields of 8.1-8.2% for FY25-26.

Long-term Growth

Population growth serves as long-term growth driver.

Portfolio Occupancy

Improving portfolio occupancy led by ramp up at +WOO.

Negative Factors

Earnings Decline

FY24 distributable income fell 11% y/y to HKD723mn on lower rental earnings and higher cash finance cost.

Local Consumption

Any deterioration in local consumption would impact leasing demand for retail space and hence weigh on the REIT’s earnings outlook.

Fortune Real Estate Investment Business Overview & Revenue Model

Company Description

Established in 2003, Fortune REIT is a real estate investment trust constituted by a trust deed (as amended, supplemented or otherwise modified from time to time). It is the first REIT to hold assets in Hong Kong and is currently listed on the Main Board of The Stock Exchange of Hong Kong Limited. Fortune REIT currently holds a portfolio of 16 private housing estate retail properties in Hong Kong, comprising of 3 million sq. ft. of retail space and 2,713 car parking spaces. The retail properties are Fortune City One, +WOO, Ma On Shan Plaza, Metro Town, Fortune Metropolis, Belvedere Square, Laguna Plaza, Waldorf Avenue, Caribbean Square, Jubilee Square, Smartland, Tsing Yi Square, Centre de Laguna, Hampton Loft, Lido Avenue and Rhine Avenue. They house tenants from diverse trade sectors such as supermarkets, food and beverage outlets, banks, real estate agencies, and education providers.

How the Company Makes Money

Fortune Real Estate Investment makes money primarily through rental income generated from its portfolio of commercial, residential, and retail properties. The company also earns revenue from property appreciation and sales, as it strategically buys and sells properties to maximize returns. Additionally, it may engage in property development projects that, upon completion, provide substantial returns either through direct sales or by enhancing rental income potential. Key partnerships with financial institutions and real estate developers can also contribute to revenue by providing favorable financing terms and opportunities for joint ventures. The company's earnings are influenced by market conditions, property values, and economic factors that affect demand for real estate.

Fortune Real Estate Investment Financial Statement Overview

Summary

The company faces financial challenges with declining revenues and consistent net losses, which are offset slightly by strong operating cash flow management. However, increasing debt and negative net profit margins are significant concerns.

Income Statement

The company has experienced a decline in revenue over recent years with a negative net profit margin, indicating financial strain. Gross profit margin remains relatively stable, but consistent net losses are concerning.

Balance Sheet

The company maintains a reasonable debt-to-equity ratio, suggesting manageable leverage. However, declining stockholders' equity and increasing total debt might pose risks if trends continue.

Cash Flow

Operating cash flow remains strong compared to net income, indicating good cash management despite the net losses. However, the lack of free cash flow growth is a concern.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.75B	1.79B	1.76B	1.81B	1.84B
	Gross Profit
1.15B	1.17B	1.17B	1.21B	1.24B
	EBIT
1.13B	1.17B	998.71M	1.55B	-2.58B
	EBITDA
1.14B	1.16B	998.71M	1.55B	-2.58B
	Net Income Common Stockholders
-518.98M	-154.92M	502.64M	1.32B	-3.19B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
96.65M	106.72M	206.86M	117.96M	177.17M
	Total Assets
38.46B	39.51B	40.34B	39.72B	39.34B
	Total Debt
9.81B	9.66B	9.58B	8.84B	8.76B
	Net Debt
9.72B	9.55B	9.37B	8.72B	8.58B
	Total Liabilities
11.53B	11.43B	11.41B	10.54B	10.70B
	Stockholders Equity
26.93B	28.08B	28.93B	29.18B	28.63B
Cash Flow		Free Cash Flow
1.03B	1.05B	1.00B	1.02B	925.08M
	Operating Cash Flow
1.03B	1.16B	1.17B	1.09B	980.00M
	Investing Cash Flow
-84.68M	-113.09M	-672.93M	-66.97M	-54.76M
	Financing Cash Flow
-957.16M	-1.15B	-409.93M	-1.08B	-884.45M

Fortune Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0778, the sentiment is Positive. The current price of 4.52 is above the 20-day moving average (MA) of 4.50, above the 50-day MA of 4.30, and above the 200-day MA of 4.05, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 58.64 is Neutral, neither overbought nor oversold. The STOCH value of 48.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0778.

Fortune Real Estate Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$2.86B	10.96	0.41%	6.08%	5.73%	-21.25%
0778	55 Neutral	$9.22B	―	-1.89%	1.07%	-2.76%	-238.04%
CMPNF		$1.54B	―	-4.63%	3.46%	―	―
GZUHF		$482.85M	―	-71.13%	―	―	―
LPHHF		$637.44M	―	-29.26%	―	―	―
WRFRF		$7.87B	64.63	0.47%	0.81%	―	―