Lifestyle Communities "4Q26 update: Trading margins for volumes" (Neutral) Zhang

研报英文原文证据摘录

Lifestyle Communities "4Q26 update: Trading margins for volumes" (Neutral) Zhang

curs if settlements for the 12-months ended 31-Dec-26, 30-Jun-27 or 31-Dec-27 are 06/26E 0.22 0.21 -6 0.22

less than 175 homes. LIC also disclosed that 13 of the 99 net sales in 2H26 PTD elected 06/27E 0.25 0.24 -4 0.29

to pay an upfront management fee (UMF) of 10% rather than a deferred management 06/28E 0.34 0.34 -3 0.38

fee (DMF). This should provide a slight boost to working capital and near-term earnings,

but we expect the impact will be relatively modest. Generating ~$2.5m in UMF revenue Solomon Zhang, CFA

Analystwould require ~40 settlements at a $600k ASP (or $60k per UMF).

solomon.zhang@ubs.com

+61-2-9324 2007

Cutting near-term earnings but eyeing two potential catalysts

Cody Shield, CFA

We remain cautious on LIC's near-term operating fundamentals, and cut our FY26/27E

Analyst

EPS 6%/4% on lower development margins. We sit 16% below consensus across both cody.shield@ubs.com

FY26/27. Two factors hold us back from moving more negative: 1) the existence of a +61-2-9324 2903

strategic investor on the register, with Hometown Australia lifting its stake to 13.2% in

Miriam Pritchard

May-26 (see link); and 2) appeal of the adverse Jul-25 VCAT ruling on the invalidity of

LIC's DMF, which if successful could reverse the majority of the $190m (or $1.56ps) post- miriam.pritchard@ubs.com

tax impairments taken at Aug-25. LIC's application for leave to appeal to the Supreme +61-2-9324 2270

Court of Victoria (SCV) will be heard next Tuesday (23 June 2026). If leave is granted, we

note the median time to finalise a civil case for the SCV is 9 months (see link), which

could suggest a 1H 2027 resolution.

Valuation: $5.70 Price Target (-10c). Neutral rating