• Stronger-than-expected 1H18 results on accelerated project recognition. 
• Presales expected to pick up in 2H18; keeping presales target unchanged. 
• Accelerated land acquisitions to catch up in scale. 
• Maintain BUY with a lower Target Price of S$2.17. 

What’s New 

Stronger-than-expected 1H18 results on accelerated project recognition.

On the back of a 56% increase in GFA delivered during the period, alongside a 6% increment in ASP recognized, Yanlord Land Group’s revenue was up 59% to Rmb16.9bn in 1H18. 

Yanlord Land Group’s gross profit margin remained stable at 46%, with the substantially high gross margins achieved in 1Q18 (1Q18: 55.7%) mostly offset by the booking of projects with lower profitability in 2Q18 (2Q18: 40%).

Core profit based on our calculation was Rmb2.1bn, up 65% and represent 57% of our full-year estimate. Unbooked revenue (including pending collection presale proceeds) stood at Rmb14.2bn and are mostly expected to be booked during the remainder of 2018. 

Source: DBS Research - 17 Aug 2018