Champion Real Estate Investment (2778) AI Stock Analysis

• Market Cap: HK$13.01B
• Dividend Yield: 2.88%
• Average Volume (3M): 2.29M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.62
• Revenue Growth: -4.61%
• EPS Growth: -1035.60%
• Country: HK
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 55
• Industry: REIT - Retail
• EPS (TTM): -0.16
• Shares Outstanding: 6,109,591,000
• 10 Day Avg. Volume: 3,209,186
• 30 Day Avg. Volume: 2,292,636
• PEG Ratio: -0.02
• Price to Book (P/B): 0.24
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.02
• 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$1.49
• Price Target Upside: -29.98% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 54 Neutral
• Price Target: HK$2.00 ▼(-6.10%Downside)

The overall stock score is influenced primarily by financial performance challenges, including declining revenues and negative profitability. Technical indicators suggest a neutral to slightly positive short-term trend, but valuation concerns due to a negative P/E ratio weigh heavily. The high dividend yield offers some appeal to investors, but caution is warranted given the company's financial difficulties.

Positive Factors

Distribution Yields

Champion REIT offers attractive distribution yields of 8.8-7.7% for FY24-25.

Negative Factors

Distributable Income

FY24 distributable income fell 15% y/y to HKD958m.

Office Leasing

Negative rental reversions are expected to persist at Three Garden Road and Langham Place Office Tower amid subdued office leasing demand and intense market competition.

Rental Income

Tenant sales decline translated into lower rental income at Langham Place Mall.

Champion Real Estate Investment Business Overview & Revenue Model

Company Description

Champion Real Estate Investment Trust is a trust formed to own and invest in income- producing office and retail properties. The Trust focuses on Grade-A commercial properties in prime locations. It currently offers investors direct exposure to 2.93 million sq. ft. of prime office and retail properties by way of two landmark properties, Three Garden Road and Langham Place, one on each side of the Victoria Harbour.

How the Company Makes Money

Champion Real Estate Investment makes money primarily through rental income from its portfolio of commercial and residential properties. The company also generates revenue through property sales, leveraging market conditions to sell assets at a profit. Additionally, Champion Real Estate Investment may engage in property development, creating new real estate projects that are either sold upon completion or added to its rental portfolio. Significant partnerships with financial institutions and real estate developers enhance its ability to finance large-scale acquisitions and development projects, contributing to its earnings. The company may also earn income from property management services, providing maintenance and operational support for third-party property owners.

Champion Real Estate Investment Financial Statement Overview

Summary

Champion Real Estate Investment faces significant challenges, particularly in its income statement, with declining revenues and profitability. The balance sheet remains relatively stable but signals potential risks with its debt position. Cash flow generation is steady but not growing, raising concerns about future financial flexibility. Overall, the company must address its profitability and growth trajectory to improve its financial health.

Income Statement

The income statement shows a concerning trend with declining revenue and profitability. The net profit margin has shifted from positive in 2023 to negative in 2024, driven by substantial net losses. This indicates challenges in maintaining operational efficiency. Additionally, the revenue growth rate has been negative over the past few years, reflecting declining sales performance.

Balance Sheet

The balance sheet reflects moderate stability with a strong equity position, but the debt-to-equity ratio remains a concern at approximately 0.33. The equity ratio is healthy, indicating a stable asset base. However, the decline in stockholders' equity over the years suggests potential erosion in asset value or increasing liabilities.

Cash Flow

The cash flow statement indicates a mixed performance. While operating cash flow remains positive, the free cash flow growth has been inconsistent. The operating cash flow to net income ratio is high due to negative net income, indicating cash generation issues relative to profits. Free cash flow remains stable, but growth is uncertain amidst declining net income.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.46B	2.51B	2.65B	2.85B	2.97B
Gross Profit	1.82B	1.67B	1.79B	1.99B	2.09B
EBITDA	-1.26B	1.74B	-84.12M	-150.44M	-11.76B
Net Income	-2.09B	220.62M	-749.32M	-831.36M	-12.50B
Balance Sheet
Total Assets	61.35B	64.47B	65.23B	67.87B	71.69B
Cash, Cash Equivalents and Short-Term Investments	726.22M	980.58M	734.93M	1.63B	1.83B
Total Debt	14.37B	14.51B	14.52B	15.29B	16.40B
Total Liabilities	17.80B	18.05B	18.00B	18.91B	20.84B
Stockholders Equity	43.55B	46.42B	47.23B	48.96B	50.86B
Cash Flow
Free Cash Flow	872.40M	1.17B	1.29B	1.60B	1.12B
Operating Cash Flow	872.40M	1.17B	1.29B	1.60B	1.12B
Investing Cash Flow	65.02M	195.30M	-208.17M	1.02B	-1.15B
Financing Cash Flow	-1.11B	-1.13B	-2.05B	-2.63B	-91.10M

Champion Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.13
• 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:2778, the sentiment is Positive. The current price of 2.13 is above the 20-day moving average (MA) of 2.03, above the 50-day MA of 2.05, and above the 200-day MA of 1.81, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 59.35 is Neutral, neither overbought nor oversold. The STOCH value of 78.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2778.

Champion Real Estate Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0435	74 Outperform	$4.00B	20.53	1.17%	8.09%	―	―
0808	59 Neutral	$2.16B	―	-1.09%	8.12%	-5.60%	-1261.11%
Sector *	59 Neutral	C$1.23B	0.76	-8.20%	5.62%	9.89%	-25.14%
0405	58 Neutral	$4.32B	―	-2.11%	6.58%	-5.33%	-2880.00%
0823	55 Neutral	$110.49B	―	-5.19%	6.47%	8.94%	-18.13%
0778	55 Neutral	$9.95B	―	-1.89%	7.13%	-2.76%	-238.04%
2778	54 Neutral	HK$13.01B	―	-4.63%	2.88%	-4.61%	-1035.60%