Yanlord Land reports 2HFY2022 earnings of RMB155.6 mil, 92% lower y-o-y

No dividend has been declared for the period as the group has decided to retain its earnings for the year.

Yanlord Land Group Z25 has reported earnings of RMB155.6 million ($30.2 million) for the 2HFY2022 ended Dec 31, 2022, 92% lower than earnings of RMB1.83 billion in the 2HFY2021.

FY2022 earnings stood 42% lower y-o-y at RMB1.53 billion.

The lower earnings were attributable to the lower revenue and fair value loss on investment properties compared to the previous year’s fair value gain.

2HFY2022 revenue fell by 20% y-o-y to RMB17.37 billion while FY2022 revenue fell by 18% y-o-y to RMB28.71 billion. This was mainly due to the lower gross floor area (GFA) delivered to customers and partly offset by the higher average selling price (ASP) per sqm. Revenue during the year was mainly generated from Riverbay Century Gardens in Nanjing, The Corals in Hangzhou and Yanlord Four Seasons New Gardens in Shenzhen.

Gross profit for the 2HFY2022 and FY2022 fell by 31% and 13% y-o-y to RMB3.72 billion and RMB7.75 billion respectively. Gross profit margin (GPM) for the 2HFY2022 fell by 3.6 percentage points to 21.4% while GPM for the FY2022 increased by 1.4 percentage points to 27.0% due to the change in the composition of product-mix delivered in the current reporting periods.

Other operating income for the 2HFY2022 and FY2022 increased by 187% and 63% y-o-y to RMB840.1 million and RMB1.14 billion respectively. This was mainly due to the gain on disposal of UE BizHub Central, gain on repurchase of senior notes, increase in interest income from associates and gain on remeasurement of retained interests in joint ventures and partly offset by the absence of gain on disposal of subsidiaries.

During the 2HFY2022 and  FY2022, the group reported a fair value loss of RMB171.0 million compared to the gain of RMB133.4 million in the year before. This is mainly due to the decrease in fair value of Yanlord Landmark, Yanlord Riverside Plaza and Yanlord Marina Centre – Section A and offset by the increase in fair value of UE Bizhub City in Singapore.

Earnings per share (EPS) for the 2HFY2022 and FY2022 stood at 8.05 RMB cents and 79.34 RMB cents respectively.

As at Dec 31, 2022, cash and cash equivalents stood at RMB20.7 billion.

No dividend has been declared for the period as the group has decided to retain its earnings for the year on the back of the uncertainties in China’s real estate sector.

For the FY2022, the group saw a 14.3% y-o-y growth in total property contracted pre-sales of RMB68.09 billion over a 23.3% y-o-y decline in contracted GFA of 1,433,550 sqm.

“2022 was a tumultuous year defined by challenges and disruptions brought about by the lingering Covid-19 epidemic, the interest rate hike and the unstable geo-political environment. On the policy front in China, the continued focus on deleveraging of property developers have resulted in property development sector experiencing its first recession since the market reform of China’s real estate industry,” says Zhong Sheng Jian, chairman and CEO of Yanlord.

“Key indicators such as government land sales, property transaction volumes, new start of projects constructions and completions have all reported substantial decline. It was only towards the end of FY2022 before the Chinese government once again re-affirmed the importance of the real estate industry, putting in place a series of incentive policies to encourage real estate investment and spur domestic consumption. Notwithstanding the challenging environment, Yanlord achieved contracted pre-sales growth in FY2022, which illustrates the success of Yanlord’s market strategy and superior product positioning, demonstrating the strong execution capabilities of its experienced management in the difficult market,” he adds.

On the outlook of the Chinese real estate market in 2023, Zhong says the Chinese economy, being the second largest in the world, “contains huge market demand and development momentum. Its urbanisation is still in progress”.

“I believe that good enterprises can gradually complete their self-correction along the latest stimulus and credit easing policies, and the real estate market will rejuvenate and be restored. Yanlord is a long-term player, its competitive advantage will continue to shine,” he says.

In Singapore, he notes that “the steady development of Singapore in 2022 reaffirmed the group’s investment foresight.”

“Yanlord’s multiregional investment and development portfolio make its business resilient and bring stable returns,” he adds.

Shares in Yanlord closed 1 cent lower or 0.91% down at $1.09 on Feb 28.

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