Brokers' take

Yanlord Land Group > Buy (maintained) OCBC Investment Research, April 12 April 12 close: S$1.49 Fair value: S$1.75

WE see Yanlord Land Group as a beneficiary of improved sentiment within the Chinese property market, and this is apparent in the recovery seen in industry contracted sales growth for March following a soft first two months of 2019.

According to data from CRIC, Yanlord's Q1 contracted sales more than doubled year-on-year to 7.06 billion yuan.

Yanlord recently announced that its Riverbay Gardens project in Suzhou had achieved an impressive 100 per cent sellout on the first day of its latest launch.

Although Yanlord's share price has rebounded 20.5 per cent year-to-date (YTD), this still pales in comparison to the average 43.2 per cent YTD share price appreciation of the A/H shares-listed Chinese developers which we track.

We see Yanlord as a potential laggard play given the right mix of its quality land bank and strong fundamentals.

Ascott Residence Trust (ART) > Buy (upgraded) UOB Kay Hian, April 12 April 12 close: S$1.20 Target price: S$1.46

ART has been disciplined with recycling capital. It has divested Ascott Raffles Place for S$353 million, while re-investing in Felix Hotel and development project lyf one-north Singapore.

We continue to like ART because Ascott, Somerset and Citadines are global brands in the hospitality industry. However, we note that ART's defensive attributes are under-appreciated. It has geographical diversification with 73 properties in over 14 countries. Its eight key markets contribute 85 per cent of total gross profit. Thus, there is minimal concentration risk.

ART has some downside protection as 41 per cent of its Q4 2018 gross profit comprised stable income from master leases and management contracts minimum guaranteed incomes. The two segments have weighted average tenure of contracts of five years.

Share price catalysts include contributions from yield-accretive acquisitions; from lyf one-north Singapore, its maiden development project; and increased contributions from newly refurbished properties.

Compiled by Navin Sregantan