Shemen Yielding Real Estate Ltd engages in leasing real estate properties to various tenants. The company was formerly known as Shemen Industries Ltd and changed its name to Shemen Yielding Real Estate Ltd in May 2023. Shemen Yielding Real Estate Ltd is based in Haifa, Israel.

Israel

Shemen Yielding Real Estate Ltd

Real Estate

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

SMNR.TA reported revenue of ILS 11mn in the last 12 months, up 34% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 22ppts over past six months and grown 3ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

Another important profitability metric, return on assets (RoA), amounted to -1.0% in the last 12 months, a decrease from 3.0% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -1.1%, below the peers. 

Shemen Yielding Real Estate Ltd reported a return on equity (RoE) of -1.4% in the last 12 months, down from 4.0% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.2 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SMNR.TA has below average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, and excessive margin volatility.

In highly turbulent market conditions, SMNR.TA is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, SMNR.TA is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from low to immense. 

From both historical and forecast perspectives, the stock is underpriced compared to similar stocks. 

Shemen Yielding Real Estate Ltd

ILA 1458

3

Shemen Yielding Real Estate Ltd

ILA 1458

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 1458

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