 Facing the historic buildings on the West Bund across Huangpu River, Yanlord Gardens is located in Lujiazui Finance and Trade Zone of Pudong Shanghai, neighboring iconic buildings such as Jinmao Tower, Oriental Pearl Tower and World Finance Center. Photo: CompanyYanlord Group had another strong month of sales in November, with contracted sales rising 45.7% yoy to RMB3.8bn on sales area of 121,400 sqm GFA. Year-to-date, the group has chalked up contracted sales of RMB26bn (+152%), with an additional RMB6.2bn in subscription sales pending conversion at end 2015. The solid pre-sales achieved to date is way ahead of the earlier RMB18bn sales target that the group had set for 2015. While the group has yet to set its FY16 sales target, management is bullish on take-up rates given the strong response to its recent launches in Shanghai, Nanjing and Tianjin. Gross margin is also expected to inch upwards as recent launch prices have been raised to reflect the strong demand, coupled with upcoming launches of new phases in existing projects which usually command better prices. Yanlord’s net gearing has also declined sharply from 45.3% as at end-2014 to 22.8% on cash collections. The group intends to landbank in cities where its sales have been strong, and in recent years have shortened its speed to market from land acquisition to project launches. At current price, the stock trades at a steep 50% discount to its NAV. We remain bullish and have added the stock to our model portfolio top picks. |
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