Growthpoint Properties Australia

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

Growthpoint Properties Australia (ASX: GOZ) is a real estate investment trust (REIT) that invests in properties in the office, industrial and retail sectors across Australia. The stock was listed on ASX in July 2007.

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

1.3 Top 10 Shareholders: The top 10 shareholders together form ~70.09% of the total shareholding. Growthpoint Properties Ltd and Vanguard Investments Australia Ltd. hold a maximum stake in the company at ~62.67% and ~2.28%, respectively.

1.4 Key Metrics: The company’s EBITDA margin stood at 77.4% in FY22 compared to 64.8% of the industry median. Return on equity in FY22 came in at 13.6%, higher than the industry median figure of 12%. Below is captured the trend of gross margin and occupancy rate:

Section 2: Business Updates, Financial and Operatinal Highlights

2.1 Business Updates:

2.2 Results Highlights of FY22 (for the period ended 30 June 2022): The company completed the 100% acquisition of Fortius Funds Management Pty Ltd (Fortius) for a purchase consideration of AUD 45mn, following the fulfilment of all customary conditions. The move has aided GOZ in adding AUD 1.9bn of third-party funds under management (FUM) to its business, thus seeking to deliver incremental growth and income stream expansion for its security holders.

The Following Picture Depicts GOZ’s Geographical Diversification Across Various Countries

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share 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 neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels February 7, 2023. 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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