The company's focus on the new economy and continuously improving its operating capacity has borne fruit, and it is expected that the underlying return on assets will continue to rise. However, fluctuations in the macroeconomic situation not only mean exchange rate losses, but may also mean that it is more difficult to raise capital. On the one hand, if the US dollar rate hike cycle ends, it will be very beneficial to the company. On the other hand, the company is also promoting the localization of funding sources as much as possible, with particular emphasis on the development of Chinese business and possible market opportunities for C-REITs.

The 2022 full-year results fell slightly short of expectations. In 2022, the company achieved revenue of US$8.2 billion, +103% year on year, EBITDA of US$1.07 billion, +61% year on year, and PATMI of US$570 million, +64% year on year. The consolidated revenue from the ARA acquisition did help the company achieve a high year-on-year increase in financial operations in 2022, but looking at the full year, the company's performance fell slightly short of expectations due to factors such as the Federal Reserve's interest rate hike, exchange rate fluctuations, and obvious macroeconomic pressure, especially exchange rate losses. The company paid a dividend of HK25 cents per share for the full year of 2022, with a dividend rate of 1.86%.

The overall scale of asset management is steady, and business operation capacity continues to improve. By the end of 2022, the company had total assets under management of 145 billion US dollars, of which the New Economy asset management scale was 68 billion US dollars, accounting for 47% of the total asset management scale. According to its annual report, in the long run, the company will focus on promoting continuous business transformation around alternative asset management and real estate investment trust funds such as the new economy, infrastructure and renewable energy. The company managed a total leasing of 4.6 million square meters in its logistics asset portfolio at the end of 2022. E-commerce tenants accounted for 76% of the new economic asset leasing tenant structure that year. E-commerce and third-party logistics occupied 9 seats among the top ten tenants in terms of revenue. The company's rental rate remained high. The average rental rate in 2022 was about 95%, the average rental rate in markets other than Greater China was 98%, and many markets were close to full occupancy. The weighted average rent increase ratio for the company's new economy asset portfolio in 2022 was 7.5%, and currently one-third of the company's leases expire in the next 24 months, which is expected to further increase profitability from the rent increase in contract renewals.

Further promote the matching of capital sources and capital utilization structures to reduce the challenges that companies may face when the global economy is uncertain. By the end of 2022, the company had about $1.8 billion in cash on hand, a debt ratio of 22.8% ($1.6 billion and 27.9% at the end of 2021, respectively), and a healthy balance sheet. The company currently has an average co-investment ratio of 7.4%. The company accelerated its asset-light strategy in 2022, achieved the listing of assets of 1.7 billion US dollars and injected them into the funds it managed, which greatly exceeded the target level of previous years. According to its announcement, the company plans to release 1 billion US dollars of balance sheet assets in 2023. As the company faced greater risk of exchange rate fluctuations in 2022, the company actively promoted full localization of financing. For example, the company is actively promoting the listing of C-REITs products, using Jiangsu Fuller Warehouse Phase 1-3 as the underlying asset declaration and issuance, creating a stable exit channel for its mature assets within China, which has now been confirmed by the Hong Kong Stock Exchange. Companies are also more active in borrowing and debt in regions where social capital is relatively abundant and financial risk is relatively low, such as China and Japan. In the long run, we believe that an international real estate asset management platform does not refer to cross-border sources of capital, but rather the internationalization of asset operation experience and the internationalization of networks — highly localized asset and capital connections are most conducive to the steady development of international real estate asset operation and management companies.

Risk factors: Currently, we think there is still great uncertainty about the end of the US dollar interest rate hike. Outside of China, financial markets in individual countries and regions where the company operates are turbulent. This not only means that it is difficult or continues to be difficult for companies to raise capital, but it also means that exchange rate risks may persist. The company's mergers and acquisitions of ARA have generated a great deal of goodwill, and there is still a considerable risk of goodwill impairment if the results of the integration fall short of expectations.

Profit forecasting, valuation and ratings: We believe that fluctuations in the macroeconomic environment have indeed caused some resistance to the company's operations, but large-scale growth, capable operation, asset-light business models, and sustainable dividend payment policies all determine the company's long-term investment value as a real estate asset management platform. Based on the EV/EBITDA valuation method, we gave the company's 2023 fund department, development department, investment department, and undistributed costs to achieve EBITDA of 7.67/285/2.41/-126 million US dollars respectively. Referring to current market benchmarks (comparable company markets agree that the 2023 EV/EBITDA multiplier is 15-19 times, the average value is 17 times), we give each division of the company's business division 15, 5, 15, 5 times the EV/EBITDA valuation in 2023, corresponding to the company The equity value is $9.7 billion, equivalent to HK$17.3 per share. We adjusted the company's 2023-2025 EPS forecast to $0.15/0.17/0.18 (the original forecast for 2023/2024 was $0.18/0.20) to maintain the “buy” investment rating.