Daily Brief Singapore: Yanlord Land, RH Petrogas Ltd and more

Yanlord Land’s H1/23 results were acceptable, in our view, with the company reporting strong top-line growth. That said, the gross margin contracted, as Yanlord delivered projects outside of Tier 1 cities. Still, cash collection was strong, which supported net debt reduction and deleveraging.

Going forward, the company faces material near-term debt maturities, including a USD 600 mn syndicated loan and the USD 376 mn YLLGSP 6.8 24 (both due February 2024). Our base case assumes that Yanlord can refinance its syndicated loan, and repay the USD bond using cash on hand. We also expect the company to continue rolling over its secured SGD loan.

Overall, Yanlord’s credit profile is underpinned by its clean debt structure and moderately sizeable portfolio of investment properties. This is as the company may be able to monetise its unencumbered investment properties in China and Singapore to raise funds. Management is exploring a CMBS issuance backed by Yanlord Landmark in Chengdu. In addition, Yanlord may be able to pledge the Yanlord Reverie Plaza in Shenzhen for bank financing, as the asset has reached more than 80% occupancy (since its soft opening in late 2022). Moreover, the company’s unencumbered investment properties in Singapore may be used as credit enhancement to support the offshore notes in the unlikely event of default.