Wharf (Holdings) (WARFF) AI Stock Analysis

• Market Cap: $8.78B
• Dividend Yield: 1.99%
• Average Volume (3M): 87.00
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 6,400
• Sector: Real Estate
• Sector Strength: 60
• Industry: Real Estate - Development
• EPS (TTM): -0.14
• Shares Outstanding: 3,056,027,300
• 10 Day Avg. Volume: 60
• 30 Day Avg. Volume: 87
• PEG Ratio: 0.54
• Price to Book (P/B): 0.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 206.18
• 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: $3.18
• Price Target Upside: 23.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Positive Factors

Investment Value

Investment value resurfaces following share price pullback, with planned project launches expected to unlock its NAV, providing upside on stock.

Property Development

Wharf Holdings' unparalleled luxury residential developments on the Peak and in Kowloon Tong are expected to bring in decent returns for the company, contributing positively to its financial performance.

Negative Factors

Commercial Property Leasing

Any further deterioration in leasing demand for commercial properties in China could weigh on Wharf's earnings and share price performance.

Earnings Impact

FY24's underlying profit is down 22% year-over-year at HKD2.8bn due to higher impairment provisions for China, which negatively impacts the financial outlook.

Wharf (Holdings) Business Overview & Revenue Model

Company Description

Founded in 1886 with Hong Kong as its base, The Wharf (Holdings) Limited (Stock code: 0004) is the 17th company incorporated in Hong Kong and a premier company with a long history. As one of the 30 constituent stocks in the original Hang Seng Index since more than 50 years ago, Wharf is among the top local blue chips that is most actively traded and widely held. Backed by a long standing mission of Building for Tomorrow and a proven track record in management and execution, the Group has produced consistent and productive performance over the years. Subsequent to the separate listing of Wharf Real Estate Investment Company Limited in November 2017 which focuses on its Hong Kong investment properties portfolio, The Wharf (Holdings) Limited's businesses are largely property-related, comprising Investment Properties, Hotels and Development Properties in Hong Kong and Mainland China. Other businesses include Logistics through Modern Terminals and Hong Kong Air Cargo Terminals. Wharf's Peak Portfolio redefines the concept of luxury living with a collection of the rare and most prestigious residences, epitomising a unique and exclusive lifestyle at the most sought-after addresses in town. Besides the highly-acclaimed Mount Nicholson, other properties under development include 1 Plantation Road, 11 Plantation Road and 77 Peak Road. Besides The Peak Portfolio, the development pipeline of Hong Kong Properties also includes the Kowloon Tong Residential Project and projects in Kowloon East. In the Mainland, Wharf spearheads its investment properties with the International Finance Square (IFS) series at the very heart of CBD or new CBD in high potential cities including Changsha, Chengdu, Chongqing, Suzhou and Wuxi. IFS developments are positioned as trendsetting landmarks with unrivalled locations, superior planning and design, retailer and shopper critical mass, as well as top-notch retail management. Changsha IFS, 2018's newest to the collection, and Chengdu IFS opened in 2014 are comparable to Harbour City in Hong Kong in scale and prominence. The boutique Chongqing IFS, featuring the largest cluster of first-tier brands in Chongqing, was opened in 2017. The Group continues to adopt a selective land acquisition policy with strategic focus on key Tier 1 or 2 cities in order to secure high quality land bank with returns. The development property landbank at the end of June 2019 totalled 3.6 million square metres. Wharf Hotels manages an expanding portfolio of 17 hotels in Asia, spearheaded by a prominent Niccolo brand in recent years. The Wharf Hotels owns four contemporary, urban, chic Niccolo hotels (including The Murray, Hong Kong and Niccolo Changsha) and manages 13 Marco Polo hotels in Hong Kong, Mainland China and the Philippines. Niccolo Suzhou is the newest addition under development and is scheduled to open in 2021. The Group also owns and operates Modern Terminals and Hong Kong Air Cargo Terminals, key components in Hong Kong's success as a hub for international trade and international transportation for decades. CME2 is the Group's long-term investment, representing a strategic initiative of reinvesting capital and profit released from the CME1 exit in Hong Kong in a progressive new economy infrastructure CME2 arena that covers much larger markets with greater growth potential. Building for Tomorrow also extends to Wharf's Business-in-Community (BIC) pursuit. With the flagship school improvement programme Project Wecan growing from strength to strength, the Group supports a series of BIC initiatives including Wu Zhi Qiao (Bridge to China) Charitable Foundation, Shanghai International Tower-running Grand Prix and Operation Panda with an aim of promoting BIC and to bring benefits to different segments of society.

How the Company Makes Money

Wharf (Holdings) Financial Statement Overview

Summary

Wharf (Holdings) exhibits strong operational efficiency and a solid equity base, as evidenced by a robust EBIT margin and low leverage. However, the company faces challenges with a negative net income and declining revenue, which impacts its overall financial health.

Income Statement

The company has shown a significant revenue decline from 2023 to 2024, with total revenue dropping from $18.95B to $12.115B. The gross profit margin in 2024 remains strong at 100%, but net income has turned negative, resulting in a net profit margin of -26.61%. EBIT margin is robust at 46.61%, indicating solid operational efficiency despite the revenue decline. However, the EBITDA margin is negative due to high depreciation or amortization expenses.

Balance Sheet

The balance sheet reflects stability with a high stockholders' equity of $136.832B in 2024. The debt-to-equity ratio is relatively low at 0.12, suggesting prudent financial leverage. The equity ratio stands at 72.00%, indicating a strong equity base relative to total assets. However, the decline in total assets and stockholders' equity over the years may pose potential risks.

Cash Flow

Operating cash flow increased from $2.379B in 2023 to $3.83B in 2024, indicating improved cash generation capabilities. The free cash flow growth rate is substantial at 99.78%, and the operating cash flow to net income ratio is strong due to a negative net income. However, the free cash flow to net income ratio is negative, reflecting challenges in translating profits into cash flows.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.12B	18.95B	18.06B	22.38B	21.00B
	Gross Profit
7.77B	9.05B	8.84B	11.31B	12.89B
	EBIT
5.64B	6.90B	6.60B	8.54B	8.24B
	EBITDA
-5.29B	3.75B	2.55B	5.95B	8.96B
	Net Income Common Stockholders
-3.22B	945.00M	-1.43B	6.02B	3.86B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.31B	11.59B	14.65B	23.56B	16.67B
	Total Assets
190.04B	204.88B	221.75B	253.70B	254.09B
	Total Debt
16.85B	19.43B	19.96B	36.74B	42.17B
	Net Debt
13.54B	7.84B	5.32B	13.19B	25.51B
	Total Liabilities
47.57B	56.67B	66.04B	87.32B	90.62B
	Stockholders Equity
136.83B	142.99B	151.59B	162.02B	158.85B
Cash Flow		Free Cash Flow
3.60B	1.80B	5.83B	2.08B	9.89B
	Operating Cash Flow
3.83B	2.38B	6.18B	2.55B	10.27B
	Investing Cash Flow
-2.59B	-3.55B	4.31B	11.31B	-14.22B
	Financing Cash Flow
-3.72B	-1.75B	-17.55B	-7.41B	-5.51B

Wharf (Holdings) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WARFF		$8.78B	―	-2.30%	1.99%	―	―
Sector *	61 Neutral	$2.83B	10.98	0.41%	8438.90%	5.81%	-21.06%
DCOHF		$338.94M	9.49	5.58%	9.38%	―	―
HSNGF		$27.17B	11.94	11.23%	6.11%	―	―
NWWDF		$1.49B	―	-10.34%	10.79%	―	―
SNLAF		$9.44B	18.79	2.17%	7.43%	―	―
SUHJF		$31.40B	12.44	2.88%	5.01%	―	―