Business Description:
Rent land from the Chinese Government and develop this land to build properties and sell to the public
Highly leveraged business, whereby land is rented with debt and sold at inflated prices to the indebted public
Catalysts:
Higher global inflation
Rapid growth of the Chinese economy
Probably “Too big to fail” and will be saved by the Chinese government
Risks:
May not be able to meet interest, bank loans, and bond payments in the coming year
Faces bankruptcy
Accounting practices misleading
Financial Analysis:
Revenues of HKD 601 Billion in FY20 up from HKD 531 Billion in FY19
Operating profit of HKD 75.2 Billion in FY20 vs of HKD 94.3 billion in FY19
Net income of HKD 9.57 billion in FY20 vs HKD 19.2 billion in FY19
Free Cash Flow of HKD 108 billion in FY20 vs free cash outflow of HKD 91.8 billion for FY19
Balance Sheet
Total assets: HKD 2.73 Tillion ; total liabilities: HKD 2.31 Trillion; book value: HKD 174 Billion
Cash: HKD 188 billion, debts: HKD 451 Billion, current assets: HKD 2.26 Trillion, current liabilities: HKD 1.79 Trillion
Read the full analysis here: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/35213028
