Link Real Estate Investment (0823) AI Stock Analysis

• Market Cap: $110.49B
• Dividend Yield: 6.47%
• Average Volume (3M): 10.26M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.60
• Revenue Growth: 8.94%
• EPS Growth: -18.13%
• Country: HK
• Employees: 1,300
• Sector: Real Estate
• Sector Strength: 55
• Industry: REIT - Retail
• EPS (TTM): 1.31
• Shares Outstanding: 2,599,733,200
• 10 Day Avg. Volume: 10,473,517
• 30 Day Avg. Volume: 10,261,676
• PEG Ratio: 0.06
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -9.86
• 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: $51.89
• Price Target Upside: 22.09% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 55 Neutral
• Price Target: ―

Link Real Estate Investment's overall score reflects its strong operational performance and solid cash flow, tempered by challenges in net income and valuation concerns due to a negative P/E ratio. The stock's upward trend is a positive technical signal, but lack of earnings call insights leaves some uncertainty. The attractive dividend yield is a notable strength for investors seeking income.

Positive Factors

Financial Performance

FY25 distribution income exceeded forecast due to favourable tax resolution.

Growth Prospects

Population growth led by government policies bodes well for non-discretionary retail growth in Hong Kong, supporting long-term reversionary growth for the REIT.

Market Sentiment

Positive developments regarding the inclusion of the REIT into Stock Connect should boost sentiment towards Link REIT sharply given its large market capitalisation, strong trading liquidity, and resilient earnings.

Negative Factors

Economic Outlook

The subdued retail sentiment and cautious economic outlook are expected to keep reversionary growth in Hong Kong’s retail portfolio in negative low-to-mid single digits.

Interest Rates

Any interest rate hike would adversely affect the distribution and valuation of Link REIT.

Rental Income

Any deterioration in Hong Kong’s non-discretionary retail market would drag the REIT’s rental income.

Link Real Estate Investment Business Overview & Revenue Model

Company Description

Link Real Estate Investment Trust (Hong Kong stock code: 823), managed by Link Asset Management Limited, is a leading retail-focused REIT in the world and Asia's largest REIT in terms of market capitalisation. Listed in 2005 as the first REIT in Hong Kong, Link has been 100% held by public and institutional investors and is a Hang Seng Index constituent stock. From its home in Hong Kong, Link manages a diversified portfolio including retail facilities, car parks and offices spanning Hong Kong, Beijing, Guangzhou, Shanghai, Shenzhen, London and Sydney. Link seeks to extend its portfolio growth trajectory and grasp expansion opportunities in different markets in pursuit of our medium-term target Vision 2025.

How the Company Makes Money

Link REIT generates revenue primarily through rental income from its diversified portfolio of retail, office, and car park properties. The company leases space to a variety of tenants, including retail shops, restaurants, and businesses, providing a steady stream of rental income. Additionally, Link REIT enhances its revenue through active asset management, which includes property improvements and redevelopment projects that increase property values and rental rates. The company also benefits from strategic acquisitions that expand its portfolio and geographical reach, further contributing to its income. Partnerships with local and international developers and property managers help in optimizing the efficiency and profitability of its properties.

Link Real Estate Investment Financial Statement Overview

Summary

Link Real Estate Investment demonstrates resilient operational performance but faces challenges with net income volatility. Revenue growth and solid cash flow generation are positives, while the transition from profit to loss is a concern. The company maintains a stable balance sheet with moderate leverage, but the reduction in equity warrants attention.

Income Statement

The company has shown a decline in net income from the previous year, turning from a profit to a significant loss, resulting in a negative net profit margin. However, revenue has grown by 10% year-over-year, and gross profit margin remains strong at 74.2%. EBIT and EBITDA margins are healthy, indicating operational efficiency despite the net loss.

Balance Sheet

The balance sheet reveals a strong equity position with an equity ratio of 70.9%, though the debt-to-equity ratio stands at 0.33, indicating moderate leverage. Stockholders' equity has decreased, which needs monitoring, but overall asset management appears stable.

Cash Flow

Cash flow performance is robust with a significant increase in operating cash flow. Free cash flow has improved dramatically from a negative position to a substantial positive figure, indicating effective cash management. However, the operating cash flow to net income ratio is not meaningful due to negative net income.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	13.94B	13.58B	12.34B	11.69B	10.87B	10.90B
Gross Profit	10.58B	10.07B	9.21B	8.78B	8.27B	8.33B
EBITDA	9.55B	10.11B	8.81B	8.59B	8.32B	-15.63B
Net Income	-2.29B	-1.98B	15.45B	6.89B	1.19B	-17.12B
Balance Sheet
Total Assets	225.90B	252.31B	268.16B	225.90B	210.06B	207.62B
Cash, Cash Equivalents and Short-Term Investments	2.95B	9.68B	17.89B	2.95B	2.53B	7.88B
Total Debt	53.61B	59.29B	69.10B	53.61B	42.48B	38.38B
Total Liabilities	62.91B	73.87B	79.10B	62.91B	51.37B	47.50B
Stockholders Equity	162.69B	178.82B	188.94B	162.69B	158.72B	159.71B
Cash Flow
Free Cash Flow	5.58B	8.40B	-11.17B	-3.20B	-478.00M	5.31B
Operating Cash Flow	7.88B	8.48B	6.27B	5.84B	6.29B	5.89B
Investing Cash Flow	5.32B	-509.00M	-24.69B	-10.70B	-10.68B	-720.00M
Financing Cash Flow	-13.75B	-14.71B	29.85B	5.12B	-1.13B	116.00M

Link Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0823, the sentiment is Positive. The current price of 42.5 is above the 20-day moving average (MA) of 41.12, above the 50-day MA of 38.86, and above the 200-day MA of 35.02, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 67.07 is Neutral, neither overbought nor oversold. The STOCH value of 71.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0823.

Link Real Estate Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	59 Neutral	C$1.23B	0.76	-8.20%	5.62%	9.89%	-25.14%
0823	55 Neutral	$110.49B	―	-5.19%	6.47%	8.94%	-18.13%
CHKGF		$15.58B	8.92	3.52%	4.50%	―	―
CMPNF		$1.66B	―	-4.63%	2.95%	―	―
FRIVF		$1.27B	―	-1.89%	1.07%	―	―
HLDVF		$17.02B	21.15	1.94%	9.49%	―	―
WRFRF		$8.63B	75.66	0.47%	0.69%	―	―