ESR-REIT (9A4U) AI Stock Analysis

• Market Cap: S$2.01B
• Dividend Yield: 0.44%
• Average Volume (3M): 1.40M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.85
• Revenue Growth: -4.01%
• EPS Growth: -66.90%
• Country: SG
• Employees: 83
• Sector: Real Estate
• Sector Strength: 56
• Industry: REIT - Industrial
• EPS (TTM): N/A
• Shares Outstanding: 802,575,740
• 10 Day Avg. Volume: 1,134,450
• 30 Day Avg. Volume: 1,401,288
• PEG Ratio: -15.18
• Price to Book (P/B): 4.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.83
• 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: S$3.35
• Price Target Upside: 34.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• Price Target: S$2.50 ▲(0.00%Upside)

The overall score reflects significant profitability challenges despite strong cash generation and liquidity. The stock's technical indicators suggest strong momentum, but overbought conditions could lead to a pullback. The valuation is undermined by a negative P/E ratio, though the high dividend yield is a positive aspect for investors seeking income.

Positive Factors

Dividend Yield

EREIT is now the fifth-largest industrial S-REIT with a total asset base of approximately SGD5 billion, looking attractive with a dividend yield higher than its peers.

Market Perception

The proposed unit consolidation is expected to enhance market perception of EREIT and improve optics from a unit price perspective.

Revenue Growth

EREIT reported growth in its 1Q25 revenue and net property income driven mainly by contributions from newly acquired properties.

Negative Factors

Dividend Per Unit

FY24 DPU of 2.119 Scts was lower y/y due mainly to divestments and lower capital gains.

Exchange Rates

Downside risks include unfavorable exchange rates and unexpected lease non-renewals.

Gearing

Gearing is expected to rise to above 40% with acquisitions.

ESR-REIT Business Overview & Revenue Model

Company Description

ESR-REIT (9A4U) is a Singapore-based real estate investment trust that primarily invests in a diversified portfolio of industrial properties across Singapore. It focuses on sectors such as business parks, logistics, high-specifications industrial spaces, and general industrial spaces. The company aims to provide its unitholders with stable distributions and sustainable long-term growth in distribution per unit.

How the Company Makes Money

ESR-REIT generates revenue primarily through the leasing of its industrial properties to a wide range of tenants across various industries. The company earns rental income from its properties, which forms the bulk of its revenue. Additionally, ESR-REIT may engage in strategic property acquisitions and divestments to optimize its portfolio and enhance returns for its investors. The trust also benefits from partnerships with property managers and developers, leveraging their expertise to maximize the value and occupancy rates of its properties. Furthermore, value-adding asset enhancement initiatives can contribute to increasing rental yields and property valuations, further boosting earnings.

ESR-REIT Financial Statement Overview

Summary

The financial performance is mixed, with a stable gross profit margin but consistent net losses and declining revenue affecting profitability. The balance sheet shows a strong equity base but increased leverage, while cash flow demonstrates strong operating and free cash flows, albeit with high investing outflows.

Income Statement

The company's gross profit margin remained stable, indicating efficient cost management. However, consistent net losses over recent years highlight profitability challenges. Revenue has shown fluctuations, with a decline in the latest period, affecting overall income stability. The absence of EBIT and low EBITDA margins further underscore profitability concerns.

Balance Sheet

The debt-to-equity ratio has increased, reflecting higher leverage which poses a risk to financial stability. Despite this, the company maintains a solid equity base with a reasonable equity ratio, which offers some balance sheet strength. However, the negative ROE indicates a lack of returns on shareholders' equity, primarily due to recurring net losses.

Cash Flow

The company demonstrates strong operating cash flow relative to net income, indicating good cash generation capabilities despite net losses. Free cash flow is positive and growing, which is a positive sign for liquidity and potential reinvestment opportunities. However, the overall cash flow is impacted by high investing cash outflows.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	370.50M	386.35M	343.23M	241.29M	229.92M
Gross Profit	261.65M	251.24M	244.24M	173.26M	164.21M
EBITDA	8.56M	51.37M	198.53M	159.13M	82.16M
Net Income	-127.78M	-67.45M	-278.26M	101.52M	9.69M
Balance Sheet
Total Assets	6.01B	5.11B	5.65B	3.33B	3.19B
Cash, Cash Equivalents and Short-Term Investments	83.94M	41.98M	45.58M	24.15M	18.10M
Total Debt	2.86B	2.15B	2.61B	1.41B	1.41B
Total Liabilities	3.33B	2.34B	2.81B	1.58B	1.59B
Stockholders Equity	2.62B	2.77B	2.75B	1.75B	1.60B
Cash Flow
Free Cash Flow	243.43M	167.27M	95.06M	124.29M	150.50M
Operating Cash Flow	269.62M	260.08M	193.63M	152.77M	161.44M
Investing Cash Flow	-436.95M	360.85M	-267.02M	-149.34M	-6.12M
Financing Cash Flow	200.41M	-626.33M	93.14M	2.62M	-152.88M

ESR-REIT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.50
• 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 SG:9A4U, the sentiment is Positive. The current price of 2.5 is above the 20-day moving average (MA) of 2.44, above the 50-day MA of 2.33, and above the 200-day MA of 2.46, indicating a bullish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 66.05 is Neutral, neither overbought nor oversold. The STOCH value of 77.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:9A4U.

ESR-REIT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
O5RU	72 Outperform	S$1.11B	34.00	3.17%	7.44%	5.21%	-25.46%
BUOU	70 Outperform	S$3.20B	23.81	3.21%	7.02%	11.98%	―
JYEU	67 Neutral	S$1.32B	22.41	3.16%	6.65%	-8.34%	-22.51%
Sector *	63 Neutral	$6.74B	18.42	-1.93%	6.80%	4.67%	-25.44%
M44U	63 Neutral	$5.99B	32.33	2.74%	6.63%	-0.97%	-40.20%
TS0U	60 Neutral	S$1.65B	8.06	-1.97%	7.53%	-1.51%	-135.46%
9A4U	54 Neutral	S$2.01B	―	-6.38%	0.44%	-4.01%	-66.90%

ESR-REIT Corporate Events

ESR-REIT Secures Favorable Tax Ruling for S$125 Million Securities

ESR-REIT Management (S) Limited announced that it has obtained a favorable tax ruling from the Inland Revenue Authority of Singapore (IRAS) regarding its S$125 million 5.75% subordinated perpetual securities. The IRAS has classified these securities as ‘debt securities’ for tax purposes, allowing holders to benefit from tax concessions and exemptions under the Income Tax Act. This classification could enhance the attractiveness of the securities to investors, potentially impacting the company’s financial operations and market positioning positively.

The most recent analyst rating on (SG:9A4U) stock is a Buy with a S$3.60 price target. To see the full list of analyst forecasts on ESR-REIT stock, see the SG:9A4U Stock Forecast page.

ESR-REIT Conducts 16th AGM with Key Developments and Paperless Voting

ESR-REIT held its 16th Annual General Meeting at the Suntec Singapore Convention & Exhibition Centre, where key developments and the performance of the Trust for the year 2024 were presented. The meeting included a poll voting process conducted in a paperless manner, with resolutions voted on by unitholders through a wireless handheld device. The Chairperson, Ms. Stefanie Yuen Thio, facilitated the meeting and voting process, ensuring all proxy forms were accounted for and verified by independent scrutineers.

The most recent analyst rating on (SG:9A4U) stock is a Buy with a S$0.36 price target. To see the full list of analyst forecasts on ESR-REIT stock, see the SG:9A4U Stock Forecast page.

ESR-REIT Holds EGM to Approve Proposed Unit Consolidation

ESR-REIT held an Extraordinary General Meeting (EGM) to discuss and vote on a Proposed Unit Consolidation. The meeting was chaired by Ms. Stefanie Yuen Thio and included a presentation by CEO Adrian Chui on the benefits of the proposal. The resolution was put to a poll vote, conducted in a paperless manner, with the Chairperson casting votes as directed by the Unitholders.

The most recent analyst rating on (SG:9A4U) stock is a Buy with a S$0.36 price target. To see the full list of analyst forecasts on ESR-REIT stock, see the SG:9A4U Stock Forecast page.