Yamada Green Resources Limited: 1HFY2026 Financial Results Analysis

Yamada Green Resources Limited, an SGX-listed property investment group with operations in China, Japan, and Singapore, has released its unaudited condensed consolidated financial statements for the six months ended 31 December 2025. This analysis provides an investor-focused review of the company’s latest performance, key financial metrics, and outlook.

Key Financial Metrics and Comparative Analysis

Performance Trends and Highlights

• Revenue: Marginal growth year-on-year (+0.5%) to RMB7.94 million was driven by higher occupancy rates and an expanded property portfolio, particularly in Japan. However, the topline remains essentially flat, indicating limited organic growth.
• Gross Profit and Margins: Gross profit increased 15.8% to RMB5.8 million, with gross margin expanding sharply from 63.3% to 73.0%. This was mainly due to reduced property and government taxes, as well as an improved occupancy rate (87.4% vs. 80.6% previously).
• Net Profit and EPS: Profit after tax fell sharply by 66.3% YoY to RMB0.6 million, while EPS dropped from 1.1 to 0.4 RMB cents. The decrease was attributed to higher administrative expenses (mainly staff costs) and a significant rise in other operating expenses, especially foreign exchange losses.
• Dividend: No interim dividend was declared. The company paid a final dividend of RMB0.0057 per share in respect of the previous financial year. The Board stated they will review dividends at the end of the current financial year.
• Cash Flow: Operating cash flows decreased sharply from RMB4.4 million to RMB1.8 million, reflecting weaker operating profit and increased receivables. Investment cash outflows (RMB21.3 million) surged due to property acquisitions in Japan. Financing inflows (RMB10.4 million) were boosted by new bank borrowings, partially offset by dividend payment.
• Balance Sheet: Non-current assets rose 5% due to the Japanese property portfolio build-up. Cash balances dropped, offset by higher receivables and the new asset classified as held for sale (Singapore property). Leverage increased with new bank borrowings in China and Japan, but the net asset value per share held steady.

Exceptional Items and One-Offs

• Foreign Exchange Losses: Other operating expenses increased significantly due to higher foreign exchange losses (RMB1.9 million in 1HFY2026 vs RMB0.6 million in 1HFY2025).
• Discontinued Operations: Income from sales of scrap no longer contributed to other operating income, following the cessation of food processing activities.
• Asset Sale: A property in Singapore (RMB7.9 million) is now classified as held for sale, with syndication planned within 12 months.

Strategic and Macroeconomic Outlook

The company continues to diversify its property portfolio geographically, with recent acquisitions in Osaka, Japan. The outlook for the Osaka rental market is positive, with rent growth expected at +3% to +6% in 2026 and a healthy vacancy rate (6%–8%). Key drivers include net migration into Osaka and upcoming infrastructure projects (Expo 2025).

However, the Chinese property market remains challenging, with increased vacancy rates, cautious leasing behavior, and ongoing price pressure. Management is responding by focusing on maintaining occupancy rates, offering competitive lease packages, and seeking high-quality tenants. Exploration of further business opportunities and accretive acquisitions is also ongoing.

Chairman’s Statement:

“Following the acquisition of the land and buildings located at Sakai City, Osaka City and Toyonaka City respectively over the past 6 months, our group has built a solid property portfolio which will generate attractive rental income and value through expected capital appreciation over time. This serves to strengthen the diversification of the Group’s property investment and rental segment and reduce its concentration risk in the People’s Republic of China (“PRC”)…
The management will continue to prioritize the occupancy rate as the main business objective and efficiently utilise various resources to optimise operating conditions, this include provide tailored lease plans for acquiring new tenants by offering competitive rental rates, so as to boost the occupancy rate, deepened connection and interaction among tenants to enhance the overall tenants’ operation empowerment. Meanwhile, the management will also focus on maintaining a stable tenant structure and retain a reserve of high-quality tenants by continue to promote and innovate with regards to our investment properties business. This will also help to enhance the occupancy rate and rental yield to strengthen the competencies and improve the overall performance of the Group. The management will also explore new business opportunities and potential acquisitions of new businesses that are accreditive to the Group’s return in the long term.”

Commentary: The Chairman’s tone is cautiously optimistic, emphasizing geographical diversification, operational stability, and proactive tenant/occupancy management in the face of macroeconomic headwinds in China.

Corporate Actions and Other Notable Items

• No share buybacks, placements, or share dilution occurred during the period.
• No interested party transactions or related-party fund flows were reported.
• Bank borrowings increased, secured by property assets in China and Japan.
• No director remuneration details were disclosed in this interim report.
• No adverse audit opinions, pending legal disputes, or major policy/tax changes disclosed.

Conclusion and Investor Recommendations

Overall Assessment: The Group’s financial performance for 1HFY2026 appears neutral to slightly weak. While operational improvements (higher occupancy, margin expansion) and strategic diversification into Japan are positives, the significant drop in profit, weaker operating cash flow, and ongoing macroeconomic challenges in China create headwinds. The company’s ability to sustain dividends is now more dependent on the performance of its new assets and the stabilization of its Chinese portfolio.

Recommendations

• If you are currently holding the stock:
  
  Consider a hold stance. The diversification into Japan provides some upside potential and risk mitigation, but near-term earnings volatility, higher leverage, and the absence of an interim dividend warrant caution. Monitor occupancy trends, foreign exchange exposure, and execution of the asset sale in Singapore.
• If you are not holding the stock:
  
  Adopt a wait-and-see approach. Entry may be considered if there is evidence of sustained profit growth from the Japanese assets, improved cash flows, or a more stable China outlook. Otherwise, the company remains in a transition phase with execution risks.

Disclaimer: This analysis is based strictly on information contained in the company’s published financial statements for the period ended 31 December 2025. It does not constitute investment advice. Investors should consult their professional advisors and consider their individual risk profile before making investment decisions.

View Yamada Green Res Historical chart here