Yanlord

Yanlord: FY10 revenue and earnings fell short of estimates. Revenue was flat at Rmb 7384m, mainly due to a booking delay at one of its Nanjing projects, which offset higher ASP of Rmb 22.5k psm (+15% yoy). Core earnings (excl net revaluation) of Rmb 1262m, was up 16% yoy, but still came in 25% below consensus. DPS was cut by 23% yoy to Rmb 5.99cts...

Notably, net debt increased 22x yoy to Rmb 6.5b and gearing rose to 33% from 2% last yr. So far, the co still enjoys favorable rates from banks (10% discount to PBOC benchmark lending rate), though that could change in a rising interest rate environment...

As of Feb 2011, total unbooked sales were Rmb9.4b, suggesting 85% mgt guidance for Rmb11b sales has been locked in. This compares with Rmb 9b achieved in 2010. Capex guidance of Rmb 7b for construction and Rmb 3.8b for total land payment implies relatively low financial flexibility to buy more land if banks further tighten credit...

The Street cuts 2011/12E net profit forecasts by ~20%, to take into account slower sales and general ASP declines of 5-15%.
Macquarie downgrades to Neutral with $1.42 TP, pegged at 35% discount to RNAV of $2.20 in view of high-end exposure risk. .
Goldman maintains at Neutral with $1.87 TP, on lower project sell-through amid tightening.
Deutsche maintains at Buy with $2.10 TP, pegged at 30% discount to RNAV of $2.97, to be in line with peers.