20220324-招银国际-Yanlord__Initiating_coverage_with_buy_recommendations_on_YLLGSPs_3页_477kb

报告摘要

CMBI Credit Commentary Summary - YLLGSP

Core Content Overview

This document provides a credit commentary on YLLGSP (Yanlord Property Group) with buy recommendations based on its financial performance, leverage, and future outlook. It includes detailed analysis of the company's operating results, financial structure, liquidity, and strategic initiatives.

Key Financial Highlights

YTM and Offer Price:
- YLLGSP 6.75%’23: YTM 13.1%, Offer Price 93.75
- YLLGSP 6.8%’24: YTM 12.5%, Offer Price 90.5
- YLLGSP 6.75%’26: YTM 11.5%, Offer Price 79.5
Maturity Profile:
- YLLGSP 6.75%’23: Maturity 23 Apr 2023
- YLLGSP 6.8%’24: Maturity 27 Feb 2024
- YLLGSP 6.75%’26: Maturity 20 May 2026
Outstanding Amount (O/S):
- YLLGSP 6.75%’23: $350mn
- YLLGSP 6.8%’24: $400mn
- YLLGSP 6.75%’26: $500mn

Operating Performance

Yanlord's FY21 results were resilient, with revenue and recurring EBIT growing by 45.6% and 39%, respectively.
The growth was driven by 140% increase in gross GFA delivered and 9.2% increase in ASP (Average Selling Price).
Gross margin fell by 10.8 percentage points to 25.6%, primarily due to price caps in higher-tier cities.
Yanlord guided for a stable gross margin of 25% over the next 1-2 years, which remains at the higher end of the sector.

Contract Sales and Targets

Yanlord's FY21 contract sales were RMB59.6bn, equivalent to ~85% of its RMB70bn target.
The miss was due to delayed project launches from Dec'21 to Jan'22.
Jan'22 contract sales reached RMB9.8bn, a 87.7% yoy growth.
FY22 sales target is RMB75bn, based on RMB120bn of saleable resources, implying a 62.5% sell-through rate.
2M22 contract sales were RMB10.89bn, up 40.1% yoy.

Financial Structure and Leverage

Yanlord has been prudent in managing its debt, with total debt and net debt declining since the acquisition of UEL in early FY20.
As of Dec'21:
- Total debt: RMB43.1bn
- Net debt: RMB21.3bn
Debt ratios:
- Net gearing: 48.5%
- Cash/short-term debt: 2.4x
- Adjusted liabilities/assets: 66.5%
These metrics are better than Dec'19 (net gearing 80.0%, cash/short-term debt 1.0x, adjusted liabilities/assets 66.2%).
Even with doubling land premium payments in FY22, the net gearing ratio is expected to remain stable.

Liquidity and Maturity Profile

Onshore liquidity:
- Yanlord does not have onshore public bonds or wealth management products.
- Has RMB1.5bn onshore private placements due in Jul'24.
Onshore CMBS:
- RMB1.6bn puttable in Apr'23 (secured by Sanya hotel).
- RMB1.2bn puttable in Aug'24 (secured by Tianjin mall).
Offshore financing:
- No offshore bond maturities in FY22.
- Offshore loan maturities: cRMB4.7bn equivalent.
- Covered by RMB21.8bn in cash on hand and cRMB1.2bn in undrawn committed loan facilities.
- Escrow account holds RMB3.8bn for project completion.

Strategic Position and Assets

Yanlord owns a high-quality IP portfolio in Singapore, including UE Bizhub Tower, Park Avenue Rochester, and Rochester Mall.
Book value: cRMB11bn
Market value: cRMB15bn (cUSD2.3bn)
SGD loans: RMB5.7bn equivalent
Unencumbered value of Singaporean assets: cRMB9.3bn (cUSD1.2bn), which exceeds its total offshore bond outstanding of cUSD1.25bn.

Risk and Disclaimer

The report does not provide tailored investment advice.
Past performance is not indicative of future results.
Investors should consult financial advisors before making decisions.
Legal restrictions apply to the distribution of the report in different jurisdictions.
CMBIS is not a U.S. broker-dealer, and the report is intended only for major U.S. institutional investors.

Contact Information

Glenn Ko, CFA
Email: glennko@cmbi.com.hk
Phone: (852) 3657 6235
Polly Ng
Email: pollyng@cmbi.com.hk
Phone: (852) 3657 6234
James Wen
Email: jameswen@cmbi.com.hk
Phone: (852) 3757 6291
CMBI Fixed Income
Email: fis@cmbi.com.hk
Phone: 852 3761 8867 / 852 3657 6291
CMBIS: A subsidiary of CMB International Capital Corporation Limited, which is a subsidiary of China Merchants Bank.