A real estate group managing multi-family assets and generating revenue through rentals and strategic equity partnerships with significant cash reserves but facing recent profitability headwinds.
Investors might consider this stock due to its robust liquidity position with over $23 million in beginning cash and zero long-term debt obligations, providing flexibility for future acquisitions or dividend restructuring once operational losses narrow.
The investment case is weak given the severe revenue contraction over the last five years, a substantial retained earnings deficit of $90.4M, and consistent negative profitability that has eroded shareholder equity without a clear path to turning operations profitable.
Sunrise Real Estate Group Inc. operates as a diversified real estate investment and development entity, primarily focused on property management, rental housing operations, and strategic joint venture investments across North American markets.
Despite maintaining a healthy balance sheet with current assets of $133.5M against $77.7M in liabilities, the company reported a net loss of $18.3M in 2024 driven by non-operating losses and a negative operating profit of $2.1M, while cash flow from operations turned negative at $-4.2M.
The commercial real estate sector in North America is currently navigating high interest rates and shifting rental demand, causing many developers to scale back expansion while focusing on stabilizing existing cash flows and managing debt maturities.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $80.0M | $24.8M | $15.6M |
| Cost of Revenue | $70.6M | $19.9M | $13.5M |
| Gross Profit | $9.5M | $4.9M | $2.1M |
| Operating Expenses | $11.6M | $5.6M | $4.2M |
| Operating Income | $-2.1M | $-613.9K | $-2.1M |
| G&A | $8.6M | $3.8M | $2.8M |
| D&A | $1.8M | $1.7M | $1.9M |
| Other OpEx | $3.0M | $1.8M | $1.4M |
| Non-Operating Income | $-2.7M | $-24.6M | $-16.1M |
| Interest Income | $691.1K | $832.5K | $398.3K |
| Pre-Tax Income | $-4.9M | $-25.2M | $-18.2M |
| Income Tax | $4.5M | $1.1M | $84.2K |
| Continuing Ops | $-9.4M | $-26.3M | $-18.3M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-9.4M | $-26.3M | $-18.3M |
| Minority Interest | $-967.3K | $-16.1M | $-9.3M |
| Net to Common | $-8.4M | $-10.1M | $-9.1M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $235.8M | $164.5M | $133.5M |
| Marketable Securities | $11.0M | $26.5M | $24.0M |
| Accounts Receivable | $204.5K | $553.0K | $328.4K |
| Other Current Assets | $224.6M | $137.4M | $109.2M |
| Long-Term Assets | $38.3M | $43.4M | $41.2M |
| PP&E (Net) | $1.0M | $728.1K | $433.3K |
| Goodwill | $1.2M | $0 | $0 |
| Other LT Assets | $23.3M | $29.6M | $27.4M |
| Total Assets | $274.1M | $207.9M | $174.7M |
| Current Liabilities | $128.3M | $91.7M | $77.7M |
| Accounts Payable | $22.4M | $24.9M | $16.9M |
| Taxes Payable | $1.8M | $1.9M | $6.1K |
| Other Current Liab | $93.8M | $64.9M | $60.8M |
| Long-Term Liabilities | $1.1M | $0 | $0 |
| Other LT Liab | $0 | — | — |
| Total Liabilities | $129.4M | $91.7M | $77.7M |
| Shareholders' Equity | $144.7M | $116.2M | $97.0M |
| Retained Earnings | $109.3M | $99.2M | $90.4M |
| AOCI | $9.4M | $7.3M | $6.1M |
| Total L&E | $274.1M | $207.9M | $174.7M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-9.4M | $-26.3M | $-18.3M |
| Non-Cash Adjustments | $111.2M | $28.6M | $31.9M |
| Working Capital Changes | $-114.9M | $-6.4M | $-17.7M |
| Cash from Operations | $-13.2M | $-4.1M | $-4.2M |
| Capital Expenditures | $190.1K | $6.0K | $18.7K |
| Cash from Investing | $1.6M | $-15.8M | $2.2M |
| Dividends Paid | $0 | $10.2M | — |
| Cash from Financing | $23.8M | $-24.3M | $0 |
| FX Effect | $-3.9M | $-9.7M | $-81.9K |
| Net Change in Cash | $-8.3M | $-53.9M | $-2.1M |
| Beginning Cash | $24.9M | $77.1M | $23.2M |
| Ending Cash | $33.2M | $23.2M | $21.1M |
The company's revenue streams are derived from rental income generated by its portfolio of residential properties, fees from property management services provided to third parties, and investment returns from its substantial holdings in joint ventures amounting to $13.4 million.
The company faces significant risk from declining revenue trends dropping from $80M to $15.6M over three years, persistent operating losses with a net profit deficit of $9.1 million for shareholders, high accounts payable relative to assets indicating potential liquidity strain, and the impact of foreign exchange fluctuations on cash positions.
Sunrise Real Estate Group leverages a diversified asset base including $24.0 million in marketable securities for liquidity, strong brand recognition within niche regional markets, and the ability to deploy capital through low-cost debt financing evidenced by zero long-term liabilities.
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