Yanlord

Yanlord: Poor results due to lower ASP and lower GFA delivered. Rev at $664.4m -78.0% yoy –77.3% qoq net profit at $40.8m -91.2% yoy -84.8% qoq. The decline in 2Q was due to lower ASPs and lower GFA delivered. Even on a half-yr basis, 1H2011’s net profit was lower 47.5% yoy attributed to lower ASP per sqm even though higher GFA was delivered to customers. Sales was mainly from its Riverbay Town project which was priced lower in 1Q at Rmb16k per sqm but raised to 24k per sqm in 2Q for phase 2.

On a positive note, pre-contracted sales increased by Rmb 1.0b to Rmb6.4b as at end Jun 2011 compared to prev end Jun 2010 which will be progressively recognized as rev in subsequent quarters. Co expects a larger proportion of sales to be recognized in 2H2011 and sales to be supported by new launches in 3Q. NAV of Rmb6.79 is approx 0.8x P/B, nxt support at $0.97. Peer Ying Li trades at P/B 1.4x.