SINGAPORE (May 24): DBS Group Research is downgrading Yanlord Land Group to “hold” with a lower target price of $1.47, cutting its recommendation for the property developer from “buy” with a target price at $1.62 previously.
This comes as DBS slashes Yanlord’s earnings estimates for FY19F and FY20F by 30% and 9% respectively. This translates to price-to-earnings (PE) ratio valuations of 6.0 times for FY19F and 5.8% for FY20F, which the brokerage deems “no longer attractive”.
“Unbooked revenue declined further to RMB 11.8 billion as at March 2019 as a result of the sluggish presales performance over the past two years and limited pick-up during 1Q19,” says lead analyst Danielle Wang. “Even if its targeted presales growth of 66% can be achieved for the full year, meaningful earnings contributions will likely come through only from 2021 onwards.”
