Buffett Brain · Research note
600007.SS· Real Estate
China World Trade Center
China World Trade Center's solid financial health and top-quintile ROIC in real estate make it intriguing, but growth is lackluster.
Buffett fit
Partial fit
Owner
59
Durability
73
Management
87
Price
74
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Real Estate stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of China World Trade Center, we'd appreciate its strong financial health, with a net debt/EBITDA of -1.58 and an interest coverage of 70.5, indicating a fortress-like balance sheet.
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The company's durability is supported by its consistent profitability over the last five years.
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Management has shown discipline with a share count CAGR of 0.17%, indicating minimal dilution.
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With a of 16.7 and an yield of 7.44%, the valuation seems reasonable but not a bargain.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 12.2% is top-quintile in the real estate sector.
- 2Net debt/EBITDA of -1.58 indicates a strong balance sheet.
- 3Interest coverage ratio of 70.5 shows excellent debt management.
- 4/Net Income ratio of 1.25 indicates high earnings quality.
Concerns
5- 1Revenue CAGR of 3.08% suggests slow growth.
- 2EPS CAGR of 2.35% over five years is modest.
- 3 of 57.7% is below the sector's top-quintile cutoff of 76.9%.
- 4Lack of or dividend yield data limits insight into capital returns.
Price history
$20.50+45.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
China World Trade Center Co., Ltd. operates commercial mixed-use developments, including offices, malls, hotels, and apartments. With a revenue of $3.77B, the company has a net income of $1.2B, reflecting a net margin of 31.9%. The stands at 42.4%, indicating strong profitability within its sector. The business benefits from its diversified property management services, which contribute to a consistent cash flow. Unit economics are robust, with an /Net Income ratio of 1.25, suggesting high earnings quality.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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