YANLORD LAND GROUP LIMITED (SGX:Z25)
Yanlord Land Group - In-line Results But Softer Gross Margin & Pre-sales Outlook
- Yanlord's estimated FY20 core PATMI of RMB1.6b.
- FY20 dividend per share maintained at S$0.068.
- Lower Fair Value to S$1.24.
Yanlord's FY20 results in-line with our expectations
- Yanlord Land Group (SGX:Z25)’s FY20 results came in within our expectations. Revenue grew 28.1% to RMB23.9b but gross profit increased at a smaller magnitude of 13.3% to RMB8.7b due to a lower gross profit margin of 36.4% (-4.8 ppt y-o-y). Management guided for gross margin of 30% in FY21, which was below our 35% forecast.
- FY20 PATMI dipped 22.6% y-o-y to RMB2.6b, while estimated core PATMI fell 34.7% to RMB1.6b. This was, however, within our expectations as it formed 97.2% of our forecast.
- A first and final dividend per share of S$0.068 was declared, similar to FY19.
Contracted sales jumped 40.8% to RMB78.5b in FY20, but expected to moderate in FY21
- Yanlord achieved robust contracted sales of RMB78.5b in FY20, which translates into y-o-y growth of 40.8% and a sell-through rate of ~80%. Contracted GFA and ASP rose 14.0% and 23.6% to 2.1m sqm and RMB36,638 psm, respectively.
- Yanlord has significant unbooked revenue of RMB106.5b (as at 31 Dec 2020), which would drive its revenue growth in FY21 and beyond, although its attributable share is around the 40-50% level.
- Management guided for RMB70b of contracted sales in FY21, which is a disappointment to us as this would represent a decline of ~11%. However, we note that Yanlord’s FY20 contracted sales target was also RMB70b and it managed to beat its target.
Net gearing lowered to 63.2%
- In terms of financial position, Yanlord’s net gearing ratio was lowered from 88.2% (as at 30 Jun 2020) to 63.2%. Management highlighted that it was in the ‘green’ category for all three segments of the three red lines financing rule. It has budgeted ~RMB20b for land acquisitions this year, and has been proactive in undertaking urban redevelopment projects in areas such as Shanghai, Zhuhai, Dongguan and Shenzhen.
- Yanlord's business strategy also entails working with high quality partners such as China Resources Land, Hongkong Land (SGX:H78) and GIC.
- We lower our FY21 core PATMI forecast by 11.6% on lower gross margin assumptions. Consequently, our fair value estimate for Yanlord declines from S$1.41 to S$1.24, still pegged to 5x FY21F core EPS.
- See Yanlord Share Price; Yanlord Target Price; Yanlord Analyst Reports; Yanlord Dividend History; Yanlord Announcements; Yanlord Latest News.
- HOLD.
OCBC Research Team
OCBC Investment Research
|
https://www.iocbc.com/
2021-03-03
SGX Stock
Analyst Report
1.24
DOWN
1.450
