Charter Hall Group

This report is full version of the report uploaded on 2 August 2022 at 3:55 PM GMT.

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

Charter Hall Group (ASX: CHC) has more than 30 years of experience in property investment and funds management. CHC is engaged in accessing equity from listed, wholesale and retail investors and then creating value through attractive investment opportunities.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~33.76% of the total shareholding. Colonial First State Investments Limited and Vanguard Investments Australia Ltd. are holding a maximum stake in the company at ~5.93% and ~5.79%, respectively.

1.4 Key Metrics: CHC reported an ROE of 19.5% in 1HFY22, compared to the industry median of 5.8%. The company's gross margin in 1HFY22 stood at 68.4%, compared to 67.8% of the Industry Median. The below picture depicts the net margin and current ratio trend since FY18.

Section 2: Business Updates and Financial Highlights

2.1 Recent Developments:

2.2 Results Highlights of 1HFY22: During the period, the Property Investment portfolio increased 18% YoY and generated a total Property Investment return of 25.5%. The Group’s funds under management (FUM) increased 52% on pcp in 1HFY22, driven by Property FUM growth of 17.2%.

The segregation of Funds Under Management by sector is highlighted below:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 2, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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