New York, June 01, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 25 May 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for these rated entities was Homebuilding And Property Development Industry published in January 2018. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Homebuilding And Property Development Industry
Scale: Scale reflects size, market position and brand name. Being among the largest and leading players in numerous markets can provide better access to skilled subcontractors and bank financing, first choice among land deals, greater purchasing, and pricing power, while at the same time offering stronger staying power and better financial and operational flexibility during a downturn. Furthermore, large companies tend to have broad geographic coverage, which also offers them the benefits of geographic diversification. In high growth markets, large residential property developers tend to have apparent benefits over smaller players including easier access to bank financing and strong financial power to bid for land in good locations. Total Revenue is an indicator of scale.
Business Profile: Business profile is considered, typically including an assessment of operating position, business and acquisition strategies, product mix, geographic diversity, execution ability, area of operation and product mix. Considerations may include business strategy; market position; product, price-point, and geographic diversity; inventory management; land strategy, including the percentage of owned vs. optioned land; degree of speculative construction vs. under contract; as well as use of off-balance sheet structures.
Profitability and Efficiency: Profitability is an indicator of the success of the business and effectiveness of management as well as the company's ability to support operations and business growth. Profitability is estimated by gross margins that include interest charged to cost of goods sold and exclude land impairment charges so as to focus on current profitability and efficiency.
Leverage and Coverage: Leverage and coverage is considered, as is sufficient financial flexibility to deal with market or regulatory developments which lead to shocks to their business and finances. Measures of leverage and coverage can include: EBIT-to-Interest, Revenue-to-Debt, and Debt-to-Total Capitalization.
Financial Policy: Management and board tolerance for financial risk is considered, as it may affect debt levels and credit quality as well as the risk of adverse debt leverage movements. Financial policies provide a guide to the appetite of a company's governing board and management for risk and the likely future direction for the company's capital structure. Key issues include debt leverage, coverage and return targets, liquidity management, cash distributions to shareholders, and acquisition strategies.
Other Considerations: Other considerations can include: regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies, and macroeconomic trends.
• China Evergrande Group
• China Jinmao Holdings Group Limited
• China Overseas Grand Oceans Group Limited
• China SCE Group Holdings Limited
• CIFI Holdings (Group) Co. Ltd.
• Dexin China Holdings Company Limited
• Gemdale Corporation
• Greenland Holding Group Company Limited
• Guangzhou Fineland Real Estate Development
• Helenbergh China Holdings Limited
• Hengda Real Estate Group Company Limited
• Housing Development Corporation Limited
• Huayuan Property Co., Ltd.
• Jiangsu Zhongnan Construction Grp Co., Ltd.
• Jiayuan International Group Limited
• Jingrui Holdings Limited
• Kaisa Group Holdings Ltd
• Landsea Green Properties Co., Ltd.
• Logan Group Company Limited
• Poly Developments and Holdings Group Co Ltd
• Powerlong Real Estate Holdings Limited
• Radiance Holdings (Group) Co. Ltd.
• Redsun Properties Group Limited
• Road King Infrastructure Limited
• Ronshine China Holdings Limited
• Sansheng Holdings (Group) Co. Ltd.
• Sino-Ocean Group Holding Limited
• Sunac China Holdings Limited
• Tianji Holding Limited
• Times China Holdings Limited
• Wheelock and Company Limited
• Yanlord Land Group Limited
• Zhenro Properties Group Limited
• Zhongliang Holdings Group Company Limited
The principal methodology used for these rated entities was Government-Related Issuers Methodology published in February 2020. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Government-Related Issuers Methodology
Assigning a Baseline Credit Assessment (BCA): The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) – its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.
Government uplift: The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance. Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.
GRIs without a BCA: In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating.
• Housing Development Corporation Limited
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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