A solid set of 1H22 results, demonstrating resilience in difficult times
- 1H22 results above expectation, with decline in revenue more than offset by a lift in recognised margin
- Balance sheet remains well-maintained despite a challenging liquidity environment
- Upcoming refinancing plans, expected delivery and GPM outlook, and dividend policy would be among the key things to watch for
- We currently have a BUY rating on the company with SGD1.43 TP
What’s new?
Yanlord released a solid set of 1H22 results after market close
Our review
1H22 earnings above expected, with shortfall from revenue more than offset by better-than-expected margin improvement
- 1H22 revenue fell 14% y-o-y due to a y-o-y decline in GFA delivered, in-line with expectation. This locks in 31% of our and 32% of market estimate, in-line with expectations.
- Gross margin surged 9ppts to 35.6% mainly driven by recognition of high-margin projects, which came in above expectation
- SG&A as % of presales improved by c.1ppt to 2.8% due to saving of staff cost and promotion expenses, in-line with expectation
- Contribution from JV & associates fell 24% y-o-y, led by a decline in JCE projects recognition
- Calculated core net margin improved 5ppts to 12.3%, which translate into 52% increase in core earnings and locked in 53% of ours and 56% of market consensus full-year earnings estimates
- Unbooked sales as of Jun-22 rose 10.8% y-o-y to Rmb108.8bn
Balance sheet remained solid despite a tough liquidity environment
- Total debt rose 13% from Dec-21 while total cash remains stable. This translates into slightly higher net gearing ratio of 61.9% from 49.0% as of Dec-21
- Cash to ST-debt stood at 1.6x (vs. 2.3x as of Dec-21), while adjusted liabilities to asset ratio stayed largely stable at 67.7%. Yanlord remains in the “Green Camp” under the “Three-Red-Lines” policy
- ST debt as % of total debt is well maintained at healthy level of 17% (vs. 19% as of Dec-21)
More to follow after its result briefing to be held at 9:30am on 12 Aug (Fri)
We will be hosting a group NDR call on 15 Aug (Monday) 4pm with Mr. Zhong Ming (Executive Director) and Mr. Jim Chan (Group Financial Controller) as representatives of the company. Do let us know if you are interested to join and learn more about the company’s latest developments/strategy.
Key things to watch:
- Upcoming debt repayment and refinancing plans
- Expected pace of project delivery in 2022 and GPM outlook
- Land acquisition strategy in 2H22 – will the company turn more proactive in land acquisitions? Is the current saleable resources sufficient for presales in 2023?
- Presales growth outlook – will the company maintain its presales target of Rmb75bn?
- Dividend policy – will the company adjust its stable absolute dividend policy?
