OCBC Investment Research still expects to see an “improvement for the rest of the financial year”, despite a fall in gross revenue and profit.
Yanlord Land Group had a disappointing start as gross revenue and gross profit fell 49.6 percent and 61.4 percent year-on-year in the first quarter of 2019 to RMB3.6 billion (S$716 million) and RMB1.5 billion (S$298 million) respectively, revealed OCBC Investment Research.
This comes as gross floor area (GFA) delivered fell 18 percent while average sales price declined 44.4 percent.
“The lower average selling price was partly due to a change in product mix, as Q1 2019 included a significant amount of GFA delivered for its Shanghai Yanlord on the Park project, which commands average selling prices of close to RMB100,000 (S$19,896) per sq m,” noted OCBC Investment Research analyst Andy Wong Teck Ching.
With this, Yanlord’s profit after tax and minority interest (PATMI) dropped 59.5 percent to RMB323.1 million (S$64.3 million), which “constituted 9.6 percent and 10.1 percent of ours and Bloomberg consensus’ full-year forecasts, respectively”, he added.
But as buying momentum picked up in March and April for the company, OCBC Investment Research expects to see an “improvement for the rest of the financial year”.
As of 31 March, Yanlord has RMB11.8 billion (S$2.3 billion) of accumulated pre-sales that are still pending recognition, of which about 90 percent is expected to be recognised this year.
Pre-sales for the first four months of the year was RMB8.4 billion (S$1.7 billion), of which RMB3.4 billion (S$676.5 million) was posted in March and RMB3.2 billion (S$636.7 million) in April.
“As it has more launches lined-up in June and July, including projects in Shenzhen and Zhuhai which are expected to fetch healthy average selling prices, management reiterated its RMB40 billion contracted sales target for 2019,” said OCBC Investment Research.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
