JPMorgan cuts Yanlord target to $1.40

Stock Name: Yanlord
Company Name: YANLORD LAND GROUP LIMITED

Research House: JP Morgan Chase

Price Call: BUY

Target Price: 1.40

JPMorgan has lowered its target price on Singapore-listed Chinese property developer Yanlord Land (YNLG.SI) to $1.40 from $2.20 but maintained its overweight rating.

JPMorgan said it had reduced Yanlord’s core earnings estimates by 8% for 2011 fiscal year and by 13% for 2012 to take into account the slow rate of sales and a potential delay in revenue recognition.

However, the bank said Yanlord’s valuation was undemanding. The stock was trading at 0.7 times historical book, six times 2011 earnings estimate and 67% discount to revised net asset value forecast, JPMorgan said.

It added that Yanlord’s gearing was currently at 45%, with 5.4 billion yuan ($1.02 billion) cash on hand. It estimated that gearing for the group is likely to peak this year at 67%, but this is still a reasonable level, it said.

At 9:44 a.m., Yanlord shares were down 1.7% at $0.865. The stock has fallen around 49% so far this year.