<Results first take>: FY23 results in-line; lived through its sizeable repayment peak
- FY23 results largely in-line, with net loss came primarily from inventory, investment properties and financial asset impairments as indicated in its earlier released profit warning
- Cash level plummeted after living through its sizeable repayment peak; net gearing was stable at 46.7% as at Dec-23 with cash to short-term debt stood at a mildly improved 1.2x
- Landbank shrank 10% h-o-h to 8.2m sm after >2 years pause in land acquisition with c.29% h-o-h decline in gross unbooked sales at Rmb68bn as at Dec-23; latest liquidity situation and business strategy would be among the key things to watch for
- We currently have a BUY rating on the company with TP under review
FY23 results in-line; net loss came mainly from sizable impairments. Revenue grew 51% y-o-y alongside a 44% increase in GFA delivered and 7% increase in ASP, in-line with our expectations. Gross margin fell 8ppts to 19.1%, mainly driven by the recognition of c.Rmb1.453bn inventory write-down and would have come in-line with our forecast if the item is added back (22.4% of effect from impairment is excluded). A fair value loss on investment properties of Rmb533m and Rmb1.06bn impairment on financial assets (mainly amount due from JV & asso) were also recorded in 2H23. This, coupled with Rmb43m losses from JV & asso (vs. Rmb584mn profit in FY22), translated into a c.Rmb934m attributable net loss in FY23, in-line with its profit warning released in Jan-24. Gross unbooked sales fell 28.5% h-o-h to Rmb68.2bn and landbank shrank 10% h-o-h to 8.2m sm as at Dec-23.
Passed a sizeable repayment peak. Total debt fell 26.4% y-o-y as at Dec-23 upon the company’s repayment of US$600m syndicate loans. Total cash accordingly fell 33% to Rmb13bn. Net gearing was stable h-o-h at 46.7% while cash-to-ST debt ratio slightly improved to 1.2x (vs 1.1x as at Jun-23). Subsequent to the reporting period, Yanlord has also fully repaid its US$376m offshore USD notes on 27 Feb, leaving only one 2026 US$500m offshore note outstanding in the public bond market. The company’s latest liquidity situation and business strategy after its sizable debt repayment would be among the key things to watch for. We currently have a BUY rating with TP under review.
More to follow after its result briefing to be held at 10:30am on 28 Feb (Wed)
