OCBC lowers Yanlord Land Group's TP on softer gross margin and pre-sales outlook

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

FY2020’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 “disappointment” to the team.

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

Shares in Yanlord closed flat at $1.16 on March 4.