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Wharf (Holdings) Ltd. (WARFF)
OTHER OTC:WARFF

Wharf (Holdings) (WARFF) AI Stock Analysis

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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) (WARFF) vs. SPDR S&P 500 ETF (SPY)

Wharf (Holdings) Business Overview & Revenue Model

Company DescriptionFounded 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
58
Neutral
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
72
Positive
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
65
Positive
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
12.12B18.95B18.06B22.38B21.00B
Gross Profit
7.77B9.05B8.84B11.31B12.89B
EBIT
5.64B6.90B6.60B8.54B8.24B
EBITDA
-5.29B3.75B2.55B5.95B8.96B
Net Income Common Stockholders
-3.22B945.00M-1.43B6.02B3.86B
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.31B11.59B14.65B23.56B16.67B
Total Assets
190.04B204.88B221.75B253.70B254.09B
Total Debt
16.85B19.43B19.96B36.74B42.17B
Net Debt
13.54B7.84B5.32B13.19B25.51B
Total Liabilities
47.57B56.67B66.04B87.32B90.62B
Stockholders Equity
136.83B142.99B151.59B162.02B158.85B
Cash FlowFree Cash Flow
3.60B1.80B5.83B2.08B9.89B
Operating Cash Flow
3.83B2.38B6.18B2.55B10.27B
Investing Cash Flow
-2.59B-3.55B4.31B11.31B-14.22B
Financing Cash Flow
-3.72B-1.75B-17.55B-7.41B-5.51B

Wharf (Holdings) Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
$8.78B-2.30%1.99%
61
Neutral
$2.83B10.920.41%8438.90%5.75%-21.03%
$338.94M9.495.58%9.38%
$27.19B11.9411.23%6.11%
$1.49B-10.34%10.79%
$9.45B18.792.17%7.43%
$31.40B12.442.88%5.01%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WARFF
Wharf (Holdings)
2.58
-0.30
-10.42%
DCOHF
Dickson Concepts (International)
0.61
0.01
1.67%
HSNGF
Hang Seng Bank
14.27
1.34
10.36%
NWWDF
New World Development
0.59
-0.48
-44.86%
SNLAF
Sino Land Co
1.00
-0.05
-4.76%
SUHJF
Sun Hung Kai Properties
9.58
0.54
5.97%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.