In Jun-09, Yanlord achieved another RMB0.96bn of sales, pushing its total contracted sales in 1H09 to RMB6.2bn (or about SGD1.24bn), up 107% YoY. With its strong 1H09 contracted sales, Yanlord has already achieved over 70% of its full-year contracted sales target for 2009 and locked in 93% of our estimated property sales revenue to be recognized in 2009.
High-grade investment property portfolio taking shape — In addition to Yanlord Landmark in Chengdu and Yanlord Towers in Nanjing, Yanlord last Friday broke ground for its 300,000sqm integrated project – Zhuhai Yanlord Marina Centre, located in the Zhuhai city center, adjacent to the Gongbei Zhuhai-Macau immigration checkpoint and the ferry terminal, the two key gateways into Zhuhai. Yanlord’s investment properties, once completed, should help generate recurrent rental income to the company, and at the same time allow it to enjoy the long-term capital value appreciation of its urban city-center landbank.
Enhanced financial positions — On our estimates, with the cash from the share placement and strong property sales, Yanlord’s net gearing will be reduced meaningfully from 60% at end-08 to only about 40% at end-09 – this should allow it to adopt a more proactive property pricing strategy to maximize profit and margin, and take advantage of potential NAV-accretive landbank opportunities.
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