Prosperity Real Estate Investment (0808) AI Stock Analysis

• Market Cap: $2.22B
• Dividend Yield: 7.89%
• Average Volume (3M): 2.17M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.62
• Revenue Growth: -5.60%
• EPS Growth: -1261.11%
• Country: HK
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 52
• Industry: REIT - Diversified
• EPS (TTM): 0.02
• Shares Outstanding: 1,566,447,100
• 10 Day Avg. Volume: 2,773,840
• 30 Day Avg. Volume: 2,174,336
• PEG Ratio: -127.55
• Price to Book (P/B): 0.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.40
• 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: $1.57
• Price Target Upside: 12.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 59 Neutral
• Price Target: HK$1.50 ▲(7.14%Upside)

Prosperity Real Estate Investment's overall stock score is primarily affected by its mixed financial performance and concerning valuation. Despite strong technical momentum, the challenges of negative earnings, declining revenue, and uncertain cash flows present significant risks. The high dividend yield provides some investor appeal, but sustainability is in question given the current financial pressures.

Positive Factors

Dividend Yield

Prosperity REIT offers a stable dividend yield of approximately 10%, which is attractive for investors.

Interest Costs

The company is set to benefit from lower interest costs as approximately 60% of its total debt is on a floating rate basis, which should offset lower rental income from negative reversions.

Lease Renewals

Prosperity REIT has concluded renewals for over 70% of leases expiring, signaling low vacancy risk in the near term.

Negative Factors

Earnings Outlook

Any further deterioration in leasing demand for decentralised office space could drag its earnings outlook and unit price performance.

Interest Rate Environment

A prolonged high interest rate environment could adversely impact its distribution income and valuation.

Rental Market Conditions

Portfolio rental reversion turned more negative at 6.4%, indicating challenging market conditions.

Prosperity Real Estate Investment Business Overview & Revenue Model

Company Description

Prosperity REIT [SEHK: 808] is a Hong Kong collective investment scheme authorized under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Prosperity REIT owns a diverse portfolio of seven high-quality properties in the decentralized business districts of Hong Kong, comprising all, or a portion of, three Grade A office buildings, one commercial building, two industrial/office buildings and one industrial building, with a total gross rentable area of about 1.28 million sq. ft.

How the Company Makes Money

Prosperity Real Estate Investment generates revenue through a combination of rental income, property sales, and property management services. Rental income is derived from leasing office spaces, retail units, and other commercial properties to tenants under long-term contracts. Property sales contribute to earnings when the company strategically divests from certain assets to realize capital gains. Additionally, Prosperity Real Estate Investment benefits from providing property management services, which include maintenance, tenant management, and facility operations, ensuring a steady stream of income. Significant partnerships with property developers, financial institutions, and corporate tenants further enhance the company's profitability and market presence.

Prosperity Real Estate Investment Financial Statement Overview

Summary

Prosperity Real Estate Investment's financial health presents a mixed picture. While the company demonstrates strong EBITDA margins and a stable balance sheet with manageable leverage, the recent decline in revenue and negative net income raise concerns. The lack of recent cash flow data exacerbates the uncertainty about the company's current liquidity position. Thus, while there are strengths in operational efficiency and capital structure, profitability and cash generation require attention.

Income Statement

Prosperity Real Estate Investment has experienced declining revenue over the past years, with a 2.73% decrease from 2023 to 2024. The Gross Profit Margin for 2024 stood at 64.7%, a slight decrease from previous years. The company has faced negative Net Income in recent years, indicating challenges in profitability. EBITDA margin remains strong at 87.06% in 2024, although net losses highlight underlying issues in operations.

Balance Sheet

The company's balance sheet shows a strong Equity Ratio of 69.33% in 2024, indicating a solid capital structure. The Debt-to-Equity ratio is manageable at 0.36, suggesting reasonable leverage. Return on Equity has been negative due to recent net losses, reflecting profitability challenges. Overall, the balance sheet remains stable with good equity levels.

Cash Flow

The cash flow situation is concerning with no operating or free cash flow reported for 2024, indicating potential liquidity issues. Previous years demonstrated positive free cash flow, but the lack of recent data questions the company's ability to generate cash from operations. Cash flow metrics need to be improved to support financial stability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	425.37M	437.31M	428.81M	423.06M	457.47M
Gross Profit	275.16M	299.31M	280.04M	276.57M	306.10M
EBITDA	370.38M	278.36M	369.10M	23.89M	208.27M
Net Income	-74.64M	-5.67M	74.89M	57.02M	-874.50M
Balance Sheet
Total Assets	9.63B	9.81B	9.98B	10.19B	10.51B
Cash, Cash Equivalents and Short-Term Investments	47.32M	61.01M	100.37M	205.96M	351.79M
Total Debt	2.40B	2.35B	2.31B	2.32B	2.33B
Total Liabilities	2.95B	2.92B	2.88B	2.92B	2.97B
Stockholders Equity	6.68B	6.89B	7.10B	7.26B	7.54B
Cash Flow
Free Cash Flow	247.65M	283.91M	222.63M	260.51M	236.10M
Operating Cash Flow	269.51M	306.86M	243.14M	267.03M	239.95M
Investing Cash Flow	-21.57M	-21.75M	-20.50M	-6.52M	-3.86M
Financing Cash Flow	-261.63M	-324.47M	-328.23M	-406.34M	-271.39M

Prosperity Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0808, the sentiment is Positive. The current price of 1.4 is above the 20-day moving average (MA) of 1.35, above the 50-day MA of 1.29, and above the 200-day MA of 1.24, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 64.85 is Neutral, neither overbought nor oversold. The STOCH value of 87.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0808.

Prosperity Real Estate Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0808	59 Neutral	$2.22B	―	-1.09%	7.89%	-5.60%	-1261.11%
Sector *	53 Neutral	$1.21B	3.28	-0.13%	7.06%	-1.64%	-127.47%
SGRRF			―	-0.78%	―	―	―
SHTRF		$511.60M	31.67	1.17%	6.26%	―	―
YUXXF		$550.16M	―	-2.11%	5.57%	―	―
5C3		€145.15M	―	-5.63%	10.37%	―	―
87001	61 Neutral	¥3.72B	―	-3.39%	0.39%	-3.16%	-28.30%