Alset Inc. (NASDAQ: AEI)

Sector: Real Estate Industry: Real Estate - Development CIK: 0001750106
Market Cap 26.18 Mn
P/B 0.17
P/E -2.06
P/S 2.16
ROIC (Qtr) -6.27
Div Yield % 0.00
Rev 1y % (Qtr) -79.87
Total Debt (Qtr) 2.44 Mn
Debt/Equity (Qtr) 0.02
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About

Alset Inc., recognized by its ticker symbol AEI, is a diversified holding company with a presence in various industries, including real estate, financial services, digital transformation technologies, biohealth activities, and consumer products. Alset's operations span across multiple business activities. Its real estate operations are primarily conducted through its subsidiary, LiquidValue Development Inc., which manages and operates real estate development projects. The company has two major projects, Lakes at Black Oak and Ballenger Run, both...

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Investment thesis

Bull case

  • Strong operating cash flow of 8.42M provides robust 3.45x coverage of total debt 2.44M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 25.86M provide 13.19x coverage of short-term debt 1.96M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 169.11M provides 69.24x coverage of total debt 2.44M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 8.42M provides exceptional 71.21x coverage of interest expenses 118190, showing strong debt service capability.
  • Operating cash flow of 8.42M provides strong 10.02x coverage of stock compensation 840000, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 8.42M barely covers its investment activities of (625110), with a coverage ratio of -13.46, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 25.86M provide limited coverage of acquisition spending of (1.60M), which is -16.20x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 2.70M relative to inventory of 23520 (114.83 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of (12.40M) show weak coverage of depreciation charges of 2.08M, with a -5.95 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 8.18M represents just -33.32x of debt issuance (245373), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Real Estate - Development
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VTMX Vesta Real Estate Corporation, S.A.B. de C.V. 11.83 Bn 120.68 43.52 1.45 Bn
2 CCS Century Communities, Inc. 2.20 Bn 14.92 0.53 1.44 Bn
3 FOR Forestar Group Inc. 1.53 Bn 9.16 0.91 0.79 Bn
4 FPH Five Point Holdings, LLC 0.38 Bn 4.01 1.95 0.44 Bn
5 SKYH Sky Harbour Group Corp 0.19 Bn -44.25 7.89 0.35 Bn
6 OZ Belpointe PREP, LLC 0.19 Bn -5.15 26.12 0.26 Bn
7 JFB JFB Construction Holdings 0.16 Bn -53.12 7.47 0.00 Bn
8 SDHC Smith Douglas Homes Corp. 0.16 Bn 14.38 0.16 0.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.02 1.43
EV to Cash from Ops. EV/CFO 0.33 3.32
EV to Debt EV to Debt 1.12 296.38
EV to EBIT EV/EBIT -0.22 -7.88
EV to EBITDA EV/EBITDA -0.52 -0.77
EV to Free Cash Flow [EV/FCF] EV/FCF 0.34 -6.68
EV to Market Cap EV to Market Cap 0.10 1.29
EV to Revenue EV/Rev 0.23 10.93
Price to Book Value [P/B] P/B 0.17 2.09
Price to Earnings [P/E] P/E -2.06 6.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -24.67
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 23.30
Dividend per Basic Share Div per Share (Qtr) 0.00 0.13
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -3.13
Interest Coverage Int. cover (Qtr) -104.91 -12.63
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1,459.45 -104.71
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 41.72 29.52
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.47
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 68.06 -5.81
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 29.32 -36.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 68.52 7.48
EBT Growth (1y) % EBT 1y % (Qtr) 68.32 -2.06
EPS Growth (1y) % EPS 1y % (Qtr) 72.52 -8.78
FCF Growth (1y) % FCF 1y % (Qtr) 185.66 109.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 69.07 34.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.07 0.42
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 6.11 0.96
Current Ratio Curr Ratio (Qtr) 10.59 1.61
Debt to Equity Ratio Debt/Equity (Qtr) 0.02 0.97
Interest Cover Ratio Int Coverage (Qtr) -104.91 -12.63
Times Interest Earned Times Interest Earned (Qtr) -104.91 -12.63
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -85.20 6.42
EBIT Margin % EBIT Margin % (Qtr) -102.41 35.19
EBT Margin % EBT Margin % (Qtr) -103.38 -40.37
Gross Margin % Gross Margin % (Qtr) 44.50 29.45
Net Profit Margin % Net Margin % (Qtr) -105.00 -51.49