ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Why Market is not reacting to the ''good fundamentals''  ?


Buoyed by strong upgrader market

• Strong 10M15 sales momentum continued in Nov; full-year

sales may reach Rmb25-26bn

• Management is looking to raise ASP further for upcoming new

launches

• Seeking to replenish land through JV

• Maintain BUY, TP S$1.35

FY15 sales may hit Rmb25-26bn. Yanlord achieved strong sales of

Rmb22.2bn in 10M15 which was 183% higher y-o-y and exceeded

its sales target. Nov sales should come in strong with Rmb3.4bn sales

locked in from the new launches in Shanghai and Nanjing in the first

week of Nov. As such, FY15 sales will likely hit Rmb25-26bn which is

better than the market expected. Management is still finalising the

sales plan for 2016, we believe its 2016 sales growth will be

supported by later phases of existing projects. Riding on the strong

upgrader market in Shanghai, the brand new project, Yanlord On the

Park, was well received with 82% units sold on the first day. With an

ASP of Rmb86.3k/sm, we expect its GP margins to reach close to

50%. Management is also seeking to raise ASP in its coming launches

which may support margins in FY16/17.

More active in land replenishment. Management is putting more

focus on land replenishment in existing cities and is looking at

projects in Suzhou and Tianjin. Management will keep its high-end

focus and is targeting above 30% GP margins for new projects. It

also plans to improve efficiency by shortening development cycle and

forming JV for new projects. We believe the quality of the new

projects will be key for sales growth beyond 2016.

9M15 results above expectations with better financial strength.

Revenue and core earnings increased by 49%/53% from the low

base last year, locking in 47%/34% of our full-year estimates (vs

36%/32% lock-in last year). GP margin was 30.9% which is in line

with our full-year estimate. Net gearing dropped by 10ppts from Jun-

15 to 22% and cash-on-hand also went up by 52% to Rmb12bn,

giving it a deeper war chest for new land acquisitions.

Maintain BUY. Yanlord is trading at 46% NAV discount, 7.0x 16 PE

and 0.5x P/BV (vs its historical 10.5x PE and 1.2x P/BV). We believe

the valuation is undemanding given the good sales outlook for its

upgrader products. We maintain BUY, TP S$1.35 based on

unchanged 9x FY16 PE.


BUY

Last Traded Price: S$1.05 (STI : 2,959)

Price Target: S$1.35 (29% upside) (Prev S$1.34)

Potential Catalyst: Better-than-expected sales in Nov/Dec

Where we differ: Our earnings estimates for FY16/17 are slightly


equityresearch@dbs.com

Talked to few '' equity veterans '' , rather surprised to learn that they have mistaken Yanlord was a S-chip , not knowing YL is an bona fide Singapore incorporated company .

(18-11-2015, 10:06 AM)cfa Wrote: [ -> ]Talked to few '' equity veterans '' , rather surprised to learn that they have mistaken Yanlord was a S-chip , not knowing YL is  an bona fide Singapore incorporated company .

If we look at the substance form, it is run by the PRC, business in PRC, primary subsidiaries in PRC = S-chip. There are plenty of "s-chips" which are designed in such a way, including the already-failed Eratat, Qingmei, Yong Xin and many more of them starting with capital letter "C".

odd lots vested

Is something brewing in Yanlord  , because the 4 tycoons distributed 105,000,000 shares from a deemed holding company to them individually .

'' Due to the transfer of the entire 105 million Yanlord Land Group Limited shares ("Shares") held by Terzetto
Capital Limited to its 4 shareholders, including Ridgway Capital Limited, in equal proportions via off-market
transactions, Terzetto Capital Limited ceased to be a substantial shareholder and consequently, Mr Lim Eng
Hock who is deemed interested in the Shares held by Terzetto Capital Limited also ceased to be a substantial
shareholder. ''

http://infopub.sgx.com/Apps?A=COW_CorpAn...35e83219c5

(18-11-2015, 10:06 AM)cfa Wrote: [ -> ]Talked to few '' equity veterans '' , rather surprised to learn that they have mistaken Yanlord was a S-chip , not knowing YL is  an bona fide Singapore incorporated company .

Many people think Capitaland is a S-Chip also. Hardly surprising

(20-11-2015, 11:07 PM)cfa Wrote: [ -> ]Is something brewing in Yanlord  , because the 4 tycoons distributed 105,000,000 shares from a deemed holding company to them individually .

'' Due to the transfer of the entire 105 million Yanlord Land Group Limited shares ("Shares") held by Terzetto
Capital Limited to its 4 shareholders, including Ridgway Capital Limited, in equal proportions via off-market
transactions, Terzetto Capital Limited ceased to be a substantial shareholder and consequently, Mr Lim Eng
Hock who is deemed interested in the Shares held by Terzetto Capital Limited also ceased to be a substantial
shareholder. ''

http://infopub.sgx.com/Apps?A=COW_CorpAn...35e83219c5

If stock held in the holding company and not split up,  all transactions have to be reported...by splitting back to the tycoons they can stay below radar. This move may signal more buying by some of them .

As long as Aberdeen is selling down Yanlord, the price will be unable to move much

(11-11-2015, 08:20 PM)cfa Wrote: [ -> ]

(11-11-2015, 08:11 PM)thinknotleft Wrote: [ -> ]cfa, the answer is in the same section of yr extract. The losses are due to US$ loans. US$ is appreciating nowadays.

Most china property companies shd be benefiting from the recovered mkt in tier 1 cities. Yanlord is not an exception.

Hi thinknotleft ,

Many thanks for your reply . YL make from property developments but lost in exchange , rather meaningless ?

Actually, if you look at the pre sales figure and their Gross margins, the forex loss is not that significant. Loss arising from forex for the 9M is 231M while the Gross profit is 1.9B. 

What YL needs to do is raise the ASP by 10% to offset this loss figure.

(24-11-2015, 08:31 AM)propertyinvestor Wrote: [ -> ]As long as Aberdeen is selling down Yanlord, the price will be unable to move much

But Aberdeen has stopped selling since 2 months ago .

http://www.shanghaidaily.com/business/re...aily.shtml

November to be ‘good’ for new home sales

The area of new homes in Shanghai continued to rise last week with November seen to be another “good” month, while luxury properties still attracted buyers, latest industry data showed.

The area of new homes sold, excluding government-funded affordable housing, climbed 5.3 percent from the previous week to 342,000 square meters, Shanghai Homelink Real Estate Agency Co said in a report released yesterday.