Charter Hall Group

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Charter Hall Group (ASX: CHC) is a property investment management company that is focused on investing in core sectors like office, retail, industrial, and social infrastructure property portfolio.

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

1.3 Top 10 Shareholders: The top 10 shareholders together form ~33.88% of the total shareholding. Colonial First State Investments Limited and Vanguard Investments Australia Ltd. hold a maximum stake in the company at ~5.93% and ~5.80%, respectively.

1.4 Key Metrics: During FY22, the company reported a return on equity of 32.4%, which increased from 21.4% in FY21. The net margin in FY22 was 84.4%, up from 74.2% in FY21. Below is captured the trend of EBITDA margin and asset turnover ratio:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Insights of FY22: During FY22, the CHC property investments portfolio grew from AUD 2,409mn in FY21 to AUD 2,918mn. Further, the company has diversified property investment earnings with no single asset above 5% of portfolio investment.   

2.3 FUM Growth: During FY22, the company completed AUD 8.5bn of transaction activities, comprising over 90 acquisitions with 22 active funds partnerships. CHC has increased its pace of development with AUD 6.1bn committed projects and uncommitted projects worth AUD 9.8bn, leading to a total development pipeline of AUD 15.9bn.

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 issues 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 September 20, 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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