Amid a spate of privatisations of companies listed here by controlling shareholders making offers at below book values, one possible candidate bandied about is Yanlord Land Group, a China-based, Singapore-listed developer.
In response to questions from shareholders ahead of its AGM, the company denies so. “Delisting has not been a matter of management nor board discussion,” says Yanlord in its April 21 response to shareholders’ questions.
The company's single largest shareholder is chairman and CEO Zhong Sheng Jian, who has a total interest of 71.55%, according to the company's FY2022 annual report.
As at Dec 31 2022, the company’s net asset value is $3.60, which compares to the current price of around 90 cents, which is down by a-fifth after the company’s full year results announcement on Feb 27.
In the previous few years, despite the fluctuations in its annual earnings, Yanlord would pay a dividend of 6.8 cents. In contrast, the company chose to forgo this payout for FY2022, triggering the lower share price.
This is even though Yanlord, as at Dec 31 2022, held cash and cash equivalents of RMB21.6 billion.
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In its response to shareholders, Yanlord says dividend has always been an important agenda for the board.
“The board noted that uncertainty continued to exist in China’s real estate sector arising from continued volatilities in the global economy and austerity measures promulgated by the central government,” the company says.
The company says the decision to withhold dividend for FY2022 is line with its prudent financial policies and approach, so it can have more flexibility to deploy more resources for future business development and operations.
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Also in response to questions from shareholders, Yanlord will also not put in place a fixed annual dividend policy as it prefers to weigh the various factors from year to year.
“The board would like to sincerely express its appreciation to the shareholders for your understanding of the tough decision of not declaring any dividend for FY2022, in order to support the group navigating through this period of complexity and changes,” the company says.
In response to criticisms of the gap between the share price and its NAV, Yanlord maintains that “market forces” are at play and it is not in a position to intervene.
“The company will continue to strive to increase shareholders’ value through better operational and financial performance,” the company adds.
