Results first take: 1H22 results in-line
- Yuexiu released a set of in-line 1H22 results after market close today
- Revenue growth came in stronger than expected, but this was more than offset by a weaker than expected margins which dragged core earnings
- DPS of Rmb0.275 declared alongside an expected dividend payout ratio of 40% on 1H22 core profit, implying 3.4% dividend yield per today’s closing price
- We will host a Group Call with Yuexiu Property’s management next Monday (Aug 22) at 10-11am
What’s new?
Yuexiu released a set of in-line 1H22 results after market close today.
Our view
1H22 results in-line; unchanged 40% payout on core earnings translates to a fruitful interim dividend yield 3.4% per today’s closing price
- Revenue rose 29% to Rmb31.3bn in 1H22, in line with our and market estimates
- Gross margins came down 6ppt to 21%, in line our and market expectations mainly driven by recognition of lower GPM projects
- SG&A as % of presales slight up 0.5pct at 2.8%, which was also in line with our and market estimates
- Core earnings attributable to shareholders came in at Rmb2,130m, up 1.4% and came largely in line with our forecast and market expectations, which translate into 4% decline in core earnings margin and locked in 49% of ours/market consensus full-year earnings estimates
- Unbooked revenue as at Jun-22 stood at Rmb95.1bn on consolidated basis
- Dividend per share of Rmb0.275 declared. This translates to a dividend payout ratio of 40% on reported attributable net profit. Dividend yield would stand at 3.4% per the company’s closing price of today
Balance sheet held up well; average funding cost remained on a downtrend
- Total debt rose 12% from Dec-21 while total cash fell 4%. This translates into a higher net gearing ratio of 59.7% from 47.1% as of Jun-22
- Both cash to ST-debt and adjusted liabilities to asset ratio remained flat at 1.4x/69% vs Dec-21. Yuexiu Property remains firmly in the “Green Camp” under the “Three-Red-Lines” policy
- ST debt as % of total debt improved to 32% (vs. 39% as of Dec-21)
- Average funding cost recorded decent improvements and trended down to 4.11% for 1H22 (vs 4.26% in FY21)
We will host a Group Call with Yuexiu Property’s management next Monday (Aug 22) at 10-11am.
