Yanlord Land Group (Z25.SI) saw its stock price soar by 6.84% in pre-market trading on Friday, despite reporting a significant revenue decline in its first-half 2025 results. The unexpected surge in stock price appears to be driven by investors focusing on the company's improved profitability metrics rather than the top-line performance.

According to the company's latest financial report, Yanlord Land's revenue for the first half of 2025 dropped by 53.5% to RMB9.286 billion, compared to RMB19.953 billion in the same period last year. This substantial decrease was primarily attributed to lower gross floor area delivered to customers, with only two projects completed during the period: Yanlord Four Seasons The Park 3 in Shenzhen and Yanlord Central Lake (Phase 3).

However, investors seem to be more impressed by the company's ability to improve its gross profit, which rose by 14.7% despite the revenue decline. This suggests that Yanlord Land has successfully implemented cost-cutting measures or improved its pricing strategy. Additionally, the company reported a net cash drawdown of RMB54 million from bank and other borrowings, indicating its commitment to supporting ongoing project development and operational requirements. These factors, combined with the challenging environment in the Chinese real estate sector, may have led investors to view Yanlord Land's performance more positively than expected, resulting in the significant stock price increase.