Between March 18 and 22, Yanlord Land Group founder, chairman and CEO Zhong Sheng Jian acquired 7,116,600 shares of the company for a consideration of S$8,478,541. At an average price of S$1.19, this took his direct holding in Yanlord Land Group from 4.27 per cent to 4.64 per cent.

 

Mr Zhong also maintains a 66.19 per cent deemed interest in Yanlord Land Group through his 95 per cent ownership of Yanlord Holdings Pte Ltd, with Mr Zhong' s spouse owning the remaining 5 per cent of the holding company.

 

The acquisitions took Mr Zhong' s total interest in Yanlord Land Group 70.83 per cent. His preceding acquisition of two million shares on Dec 17 was at an average price of S$1.10.

 

Mr Zhong is responsible for the overall management and strategy development of Yanlord Land Group. Since the 1980s, he has founded and established a number of businesses in trading, manufacturing and real estate spanning China, Singapore and Hong Kong.

 

Mr Zhong started property development businesses in the early 1990s through the setting up of offices in Shanghai and Nanjing, which are now part of Yanlord Land Group.

 

Back on Feb 27, the group reported its FY20 (ended Dec 31) revenue increased by 28.1 per cent to 23.92 billion yuan, compared to FY19. Revenue contributors consisted of: 20.960 billion yuan from property sales, 1.14 billion yuan from rental and hotel income, 813 million yuan from property management services and the remainder from other income.

 

The profit attributable to owners of the company decreased 22.6 per cent from FY19 to 2.59 billion yuan in FY20, attributed to the net effect from absence of gain on bargain purchase in FY20, and loss on re-measurement of retained interests in associates and joint venture in FY19 and a lower fair value gain on investment properties in FY20.

 

Mr Zhong noted that the group has a long established presence in the Yangtze River Delta, the Greater Bay Area as well as Chengdu, Tianjin and various other cities, in China, where there are strong fundamentals and positive economic outlook that attract talent to sustain the market growth, which have become the engine of economic recovery from the Covid-19 pandemic.

 

He added that the group is confident, with its professional development capabilities and a prudent investment approach, that it will be able to sustain its competitive advantage and reputation under the backdrop of urbanisation and a growing middle class.

 

Mr Zhong also noted that the portfolio of high-quality assets and international exposure attained through the acquisition of United Engineers is also facilitating the group' s long-term development.

 

OCBC Investment Research has maintained &ldquo hold&rdquo on Yanlord Land Group, though it has lowered its fair value estimate to $1.24 from $1.41 on lower gross margin and contracted sales assumptions from the Chinese developer in FY2021, says the team on March 3.

 

The group&rsquo s results for the FY2020 ended December came within the brokerage&rsquo s expectations, with 28.1% higher y-o-y revenue at RMB23.9 billion ($4.92 billion). Gross profit increased 13.3% y-o-y to RMB8.7 billion due to lower gross profit margin (GPM) of 36.4%, 4.8 percentage points lower y-o-y.

 

Yanlord&rsquo s management has guided for gross margin of 30% in the FY2021, standing below OCBC&rsquo s 35% forecast.

 

FY2020&rsquo s earnings or PATMI fell 22.6% y-o-y to RMB2.6 billion.

 

Management has also guided for a 11% decline in contracted sales, at RMB70 billion in FY2021, which is a &ldquo disappointment&rdquo to the team.

 

Following the lower target price, which is still pegged to 5 times FY2021&rsquo s core earnings per share (EPS), the team has also lowered its core earnings forecast for the FY2021 by 11.6% y-o-y.

 

YANLORD Land Group' s net profit edged down 3 per cent to 2.1 billion yuan (S$431.8 million) in the half-year ended December 2020, from 2.2 billion yuan in the corresponding period of the previous year.

 

Lower other operating income and other gains, share of loss of joint ventures and a decrease in fair value gain on investment properties dragged down a 35 per cent rise in revenue during the same period.

 

Revenue was 14.8 billion yuan, up from 11 billion yuan in H2 2019. The Chinese property developer attributed the rise to an increase in gross floor area (GFA) delivered to customers and higher average selling prices (ASPs) per square metre in H2 2020 compared to H2 2019.

 

Earnings per share was 108.67 fen compared to 111.94 fen a year ago.

 

For the full year, net profit fell 23 per cent to 2.6 billion yuan from 3.4 billion yuan. The company said this was a net effect of the absence of a gain on a bargain purchase in the previous year, loss on remeasurement of retained interests in associates and joint ventures, and lower fair value gains on investment properties.

 

Revenue rose 28 per cent to 23.9 billion yuan from 18.7 billion yuan on higher GFA delivered to customers, but the increase was partially offset by a decrease in ASP.

 

Earnings per share for the full year was 134.19 fen, down from 173.46 fen in FY2019.

 

The board of directors recommended a final cash dividend of 34.19 fen, slightly lower than the 34.21 fen paid out in FY2019.

 

As at Dec 31 2020, Yanlord&rsquo s net asset value was RMB16.16, or $3.32 - up from RMB14.62 as at Dec 31 2019.