Following the release of Yanlord Land Group's 1HYFY2021 ended June results on August 12, OCBC Investment Research has reiterated its 'hold' rating on the counter with an unchanged target price of $1.20.

In an August 17 research note, OCBC’s research team notes that Yanlord’s 1HFY2021 results were in line with its expectations, with the group reporting PATMI of RMB823.4 million ($172.9 million), up 67.1% y-o-y.

While revenue for the 1HFY2021 jumped 44.7% y-o-y to RMB13.2 billion, gross profit grew only 7.5% y-o-y as margins were compressed by 9.2 percentage points y-o-y to 26.7%. While management has guided that higher margin projects will be delivered in the 2HFY2021, the OCBC team highlights that the group’s overall gross margin for FY2021 is expected to decline.

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