Fortune Real Estate Investment (0778) AI Stock Analysis

• Market Cap: $9.98B
• Dividend Yield: 7.34%
• Average Volume (3M): 3.50M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.61
• Revenue Growth: -6.97%
• EPS Growth: -138.86%
• Country: HK
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Retail
• EPS (TTM): -0.32
• Shares Outstanding: 2,048,404,000
• 10 Day Avg. Volume: 2,528,146
• 30 Day Avg. Volume: 3,496,085
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.96
• Enterprise Value/Revenue: 11.21
• Enterprise Value/Gross Profit: 17.00
• Enterprise Value/Ebitda: 54.05
• 1Y Price Target: $5.61
• Price Target Upside: 15.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 61 Neutral
• Price Target: HK$5.00 ▲(2.67% Upside)

The overall stock score is influenced primarily by the company's operational efficiency and strong technical indicators, which suggest positive market sentiment. However, the negative P/E ratio and profitability challenges weigh down the score. The high dividend yield offers some compensation for these risks.

Positive Factors

Financial Performance

The necessity based retail mall portfolio underpins resilience, with over 70% of the space leased to tenants in necessity goods/services trades.

Interest Costs

A lower HIBOR should translate into interest cost savings, more than offsetting the shortfall in rental earnings, and supporting the forecasted 3% DPU growth in FY25.

Population Growth

Population growth serves as a long-term growth driver, supporting future reversionary growth.

Negative Factors

Distributable Income

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.

Rental Earnings

Negative rental reversions from supermarket and real estate agents should continue to weigh on the REIT’s near-term rental earnings outlook.

Fortune Real Estate Investment Business Overview & Revenue Model

Company Description

Fortune Real Estate Investment (0778) is a prominent real estate investment company primarily engaged in the acquisition, development, and management of a diverse portfolio of commercial and residential properties. The company focuses on strategic investments in high-growth urban areas, aiming to deliver long-term value to its stakeholders through the appreciation of property values and rental income. Fortune Real Estate Investment is recognized for its expertise in navigating complex real estate markets and its commitment to sustainable and innovative property solutions.

How the Company Makes Money

Fortune Real Estate Investment makes money through a variety of revenue streams, primarily driven by rental income from its portfolio of commercial and residential properties. The company also benefits from property appreciation, which contributes to capital gains upon the sale of assets. Additionally, the firm may engage in property development projects, generating revenue through the sale of newly developed units. Strategic partnerships with other real estate developers and financial institutions further enhance its revenue-generating capabilities, enabling Fortune Real Estate Investment to leverage market opportunities and optimize returns on its investments.

Fortune Real Estate Investment Financial Statement Overview

Summary

Fortune Real Estate Investment shows operational efficiency with strong gross and EBIT margins, but faces challenges in profitability with consistent net losses impacting overall financial health. The balance sheet is robust with moderate leverage, but negative returns on equity highlight profitability issues. Cash flows remain positive, providing some stability, but the inconsistency in growth and negative net income are areas of concern.

Income Statement

The company has experienced a decline in revenue over recent years, with a negative net profit margin due to significant net losses in the latest period. The gross profit margin remains strong at approximately 66%, but the net income has been negative for the past two years, indicating challenges in profitability. EBIT and EBITDA margins are relatively high, suggesting operational efficiency, but the bottom line is impacted by other expenses.

Balance Sheet

The balance sheet shows a solid equity base with a debt-to-equity ratio of approximately 0.36, indicating moderate leverage. The equity ratio is around 70%, reflecting a strong capital structure. However, the return on equity is negative due to net losses, which is a concern for shareholders.

Cash Flow

The company maintains positive operating and free cash flows, which is a positive sign of liquidity and operational strength. However, the free cash flow growth rate has been inconsistent, and the operating cash flow to net income ratio is skewed due to negative net income, indicating potential volatility in cash generation relative to earnings.

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
EBITDA	1.14B	1.16B	998.71M	1.55B	-2.58B
Net Income	-518.98M	-154.92M	502.64M	1.32B	-3.19B
Balance Sheet
Total Assets	38.46B	39.51B	40.34B	39.72B	39.34B
Cash, Cash Equivalents and Short-Term Investments	96.65M	106.72M	206.86M	117.96M	177.17M
Total Debt	9.81B	9.66B	9.58B	8.84B	8.76B
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: 4.87
• 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 4.87 is below the 20-day moving average (MA) of 4.91, above the 50-day MA of 4.84, and above the 200-day MA of 4.18, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 50.61 is Neutral, neither overbought nor oversold. The STOCH value of 57.78 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
0778	61 Neutral	$9.98B	―	-4.25%	7.34%	-6.97%	-138.86%
Sector *	53 Neutral	$1.22B	3.15	-6.08%	5.81%	-8.21%	-81.31%
CMPNF	―	$1.61B	―	-6.12%	14.34%	―	―
GEAHF	―	$1.35B	―	-3.35%	5.71%	―	―
KWHAF	―	$885.63M	19.98	0.73%	6.93%	―	―
HVP0	―	€1.40B	110.27	-2.93%	―	―	―
0258	54 Neutral	HK$6.78B	7.63	6.94%	4.33%	590.98%	538.64%