Link Real Estate Investment (0823) AI Stock Analysis

• Market Cap: HK$108.09B
• Dividend Yield: 6.56%
• Average Volume (3M): 8.41M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.58
• Revenue Growth: 2.29%
• EPS Growth: -339.64%
• Country: HK
• Employees: 1,300
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Retail
• EPS (TTM): 1.31
• Shares Outstanding: 2,604,686,300
• 10 Day Avg. Volume: 7,130,811
• 30 Day Avg. Volume: 8,411,416
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$52.31
• Price Target Upside: 26.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 55 Neutral
• Price Target: HK$43.00 ▲(3.61% Upside)

The overall stock score is primarily influenced by financial performance, which shows resilience but also highlights profitability challenges and fluctuating cash flows. Technical analysis indicates bearish momentum, and valuation concerns arise from a negative P/E ratio, although the high dividend yield offers some appeal.

Positive Factors

Interest Savings

Lower HIBOR should translate into interest savings for the REIT as over 30% of its total debt is on a floating rate basis, helping to partly offset lower rental earnings.

Population Growth

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

Stock Connect Inclusion

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

Interest Rate Hike

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

Non-Discretionary Retail Market

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

Retail Sentiment

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, weighing on the REIT’s rental earnings.

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 Real Estate Investment generates revenue primarily through rental income from its extensive portfolio of retail, office, and parking properties. The company leases these spaces to a variety of tenants, including retail businesses, corporate offices, and individuals, ensuring a steady stream of rental income. Additionally, Link REIT benefits from property management fees and income from strategic property development and redevelopment projects. The company's earnings are further enhanced through strategic partnerships and joint ventures that expand its portfolio and improve asset value over time.

Link Real Estate Investment Financial Statement Overview

Summary

Link Real Estate Investment shows resilience through steady revenue growth and a strong equity base. However, ongoing challenges with profitability and fluctuating cash flows present areas for improvement. A focus on stabilizing net income and managing debt levels will be crucial for future financial health.

Income Statement

The income statement reveals mixed results with a declining net income and inconsistent EBITDA, causing concern despite stable revenue growth over the years. The gross profit margin remains strong, but the net profit margin has been negative in recent years due to high expenses or losses.

Balance Sheet

The balance sheet shows a solid equity position with an improving debt-to-equity ratio, indicating good financial health. However, the high total debt levels pose a potential risk if profitability does not improve. The equity ratio is strong, reflecting a solid asset base.

Cash Flow

Cash flow analysis highlights consistent operating cash flow, supporting the company's liquidity. However, fluctuating free cash flow and high capital expenditures impact overall cash flow stability. The ability to maintain positive free cash flow growth is a positive sign.

Breakdown	TTM	Dec 2024	Dec 2024	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.41B	13.58B	14.22B	12.34B	11.69B	10.87B
Gross Profit	10.64B	10.07B	10.62B	9.21B	8.78B	8.27B
EBITDA	9.99B	1.40B	-6.66B	8.81B	8.59B	8.32B
Net Income	-8.86B	-1.98B	-8.86B	15.45B	6.89B	1.19B
Balance Sheet
Total Assets	229.18B	252.31B	229.18B	268.16B	225.90B	210.06B
Cash, Cash Equivalents and Short-Term Investments	3.23B	9.68B	3.23B	17.89B	2.95B	2.53B
Total Debt	52.93B	59.29B	52.93B	69.10B	53.61B	42.48B
Total Liabilities	65.78B	73.87B	65.78B	79.10B	62.91B	51.37B
Stockholders Equity	163.47B	178.82B	163.47B	188.94B	162.69B	158.72B
Cash Flow
Free Cash Flow	8.02B	8.40B	8.94B	-11.17B	-3.20B	-478.00M
Operating Cash Flow	8.05B	8.48B	9.01B	6.27B	5.84B	6.29B
Investing Cash Flow	1.37B	-509.00M	1.52B	-24.69B	-10.70B	-10.68B
Financing Cash Flow	-13.25B	-14.71B	-14.36B	29.85B	5.12B	-1.13B

Link Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.50
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 41.5 is below the 20-day moving average (MA) of 42.07, below the 50-day MA of 42.65, and above the 200-day MA of 36.88, indicating a neutral trend. The MACD of -0.46 indicates Positive momentum. The RSI at 44.19 is Neutral, neither overbought nor oversold. The STOCH value of 19.99 is Positive, 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 *	63 Neutral	$7.02B	13.41	-0.50%	6.86%	4.08%	-25.24%
0823	55 Neutral	HK$108.09B	―	-5.19%	6.56%	2.29%	-339.64%
CHKGF	―	$16.44B	10.86	2.92%	4.88%	―	―
CMPNF	―	$1.62B	―	-6.12%	14.34%	―	―
FRIVF	―	$1.27B	―	-4.25%	8.59%	―	―
HLDVF	―	$16.17B	21.26	1.89%	6.66%	―	―
WRFRF	―	$8.81B	83.64	-0.25%	5.51%	―	―