MARC RATINGS AFFIRMS YNH'S RATING AT BBIS WITH NEGATIVE OUTLOOK

MARC Ratings has affirmed its BBIS rating with a negative outlook on YNH Property Berhad's (YNH) RM700 million Islamic Medium-Term Notes Programme (Sukuk Wakalah).

The rating takes into account the challenges faced by YNH, as reflected in its credit profile, notwithstanding recent asset monetisation efforts that helped the company meet certain financial obligations. However, YNH is expected to remain reliant on asset disposals due to limited cash flow generation from ongoing projects. The negative outlook reflects limited earnings visibility due to the muted project pipeline over the next 12 months, underscoring the importance of timely asset monetisation to meet near-term obligations and advance deleveraging efforts.

YNH's business prospects remain limited, with only two ongoing projects generating meaningful cash flow. Nonetheless, its flagship development - Solasta Dutamas in Mont Kiara, with a gross development value (GDV) of RM750 million - has achieved a take-up rate of 65% and surpassed the cash flow breakeven point as of end-July 2025. Another active project, a landed residential development in Manjung, Perak, with a GDV of around RM20.0 million, is currently 67% sold. Total unbilled sales of RM209.9 million offer some earnings visibility and provide adequate liquidity to support construction progress.

Meanwhile, YNH has continued monetising assets to meet debt obligations and reduce leverage. In financial year ended 30 June 2025 (FY2025) to date, the group has completed asset sales totalling RM476 million, including 163 Retail Park in Mont Kiara, Kuala Lumpur (RM215.0 million), and AEON Seri Manjung in Perak (RM138.0 million). The ongoing sale of a 5.1-acre land parcel in Desa Sri Hartamas is expected to be completed by mid-November 2025, pending fulfilment of conditions precedent, including approval to increase the plot ratio from six to seven, which would raise the land value to R