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Yanlord Land Group: Profitability Turns Around as Policy Support Lifts China Property Outlook

Yanlord Land Group Ltd: Investment Thesis

Yanlord Land Group Ltd (YLLG SP) stands out as a prominent real estate developer specializing in high-end residential projects across the People’s Republic of China. The company has recently demonstrated a significant turnaround in profitability, supported by strategic shifts in project delivery and a favorable policy environment that could accelerate the stabilization of China’s property sector.

Key Investment Highlights

• BUY Recommendation: Entry at 0.70, Target Price of 0.78, Stop Loss at 0.66.
• Strategic Focus: Emphasis on premium urban developments and portfolio optimization.
• Policy Tailwinds: Government initiatives to absorb unsold housing inventory and stabilize the sector.

Financial Performance: Strong Profitability Rebound Despite Revenue Dip

Yanlord Land Group delivered a notable profitability turnaround in the first half of 2025, driven by a strategic move toward higher-margin project deliveries and a reduction in property write-downs. This was achieved despite a sharp decline in revenue, reflecting the company’s enhanced cost discipline and operational focus.

• Revenue: Down 53.5% year-on-year to RMB9.2 billion in 1H25, primarily due to a lower gross floor area delivered.
• Net Profit: RMB379.2 million in 1H25, a sharp recovery from a net loss of RMB486 million in the prior-year period.
• Earnings per Share: Rebounded to S\$0.1963 from a loss of S\$0.2516 in 1H24.

This profit recovery, despite a weaker top line, underscores Yanlord’s successful cost management and focus on higher-margin assets.

Sector Outlook: Policy Support Signals Stabilization for China’s Property Market

China’s property sector continues to face a prolonged downturn, but recent and upcoming government interventions could be pivotal in reviving the market. Regulatory authorities are setting the stage for major central state-owned enterprises and bad-debt managers—such as China Cinda Asset Management—to step in and purchase unsold housing inventories. These transactions are expected to be backed by up to RMB300 billion of funding from the People’s Bank of China.

• Policy Measures: The removal of price caps and the involvement of well-capitalized state entities are designed to improve the efficiency and economics of clearing an estimated 60 million unsold apartments nationwide.
• Potential Impact for Yanlord: With its focus on premium urban locations, Yanlord is well-placed to benefit from these policy-driven interventions, which could help sustain profitability into 2026 and 2027, even as the broader sector recovery is expected to remain gradual.

Risks and Execution Considerations

While policy support is a clear positive, the recovery in China’s property market is anticipated to be steady rather than immediate. Execution risks remain, particularly in the pace at which unsold inventory can be cleared and how quickly consumer confidence can recover. However, early signs of moderating sales declines and the government’s proactive stance are encouraging for Yanlord’s outlook.

Summary: Yanlord Land Group Positioned for Growth Amid Sector Recovery

Yanlord Land Group’s focus on premium developments and improved cost discipline has enabled a strong rebound in profitability, even as sector headwinds persist. With robust policy support on the horizon and a clear strategy to target higher-margin projects, Yanlord is well-positioned to capture upside from a stabilizing Chinese property market. Investors seeking exposure to a quality real estate player in China should keep a close watch on Yanlord’s continued execution and the evolution of government initiatives aimed at sector recovery.

• Buy Recommendation: Entry at 0.70, Target at 0.78, with a Stop Loss at 0.66.
• Key Catalysts: Policy-driven inventory clearance, continued cost discipline, and focus on high-margin projects.