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Moody's upgraded country Garden to investment grade Baa3 with good performance and sound financial performance.
Sep 21,2020 08:15CST
translation
Source:Financial Union
The content below was translated by Tencent automatically for reference.

SMM: September 18, international authoritative rating agency Moody's (Moody's) will be country Garden Holdings Limited's issuer rating and senior unsecured bond rating have been upgraded to investment grade Baa3, outlook for stability.

After this adjustment, the rating of country Garden issuer has been upgraded from non-investment grade "Ba1/ positive" to investment grade "Baa3/ stable", while senior unsecured bond rating has rarely jumped two notches to investment grade "Baa3".

According to the Moody's report, country Garden's Baa3 issuer rating reflects the company's strong brand strength, diverse geographical layout, strong liquidity and flexible and robust operating record through the cycle. The company has rich land reserves in all major regions of China, which is sufficient to support performance growth in the next three to four years.

Moody's believes that the upgrade of the issuer's rating reflects country Garden's leading market position in the real estate industry, a good track record and a sustained and sound financial management strategy. The upgrade of senior unsecured bonds reflects the enhancement of the company's credit qualifications and further diversification of financing.

The upgrade is another upgrade by Moody's since it upgraded the company to Ba1 in 2015 and adjusted its outlook from stable to positive in 2019. Earlier, due to the increase in uncertainty in the market due to the epidemic, Moody's lowered its outlook for China's real estate industry to negative in April and only recently returned to stability. Country Garden is one of the few real estate development companies whose ratings have bucked the trend.

As we all know, Standard & Poor's, Moody's and Fitch, as the three authoritative rating agencies in the world, play an important role in the international capital market. At present, country Garden has received investment grade ratings from Moody's and Fitch, which is rare in domestic private enterprises. Just earlier this month, S & P upgraded country Garden's long-term main credit rating from "BB+/ stable" to "BB+/ positive", meaning S & P believes it has a good chance of upgrading its rating to investment grade in the coming period of time.

Country Garden is one of the few investment-grade Hong Kong blue chips among Chinese real estate companies. On December 4, 2017, country Garden was included in the Hang Seng Index and promoted to the blue chip level of the Hong Kong stock market. Among the more than 2000 companies listed on the Hong Kong Stock Exchange, country Garden ranks among 43 blue chips, reflecting the full affirmation of country Garden in the capital market and confidence in the company's future development prospects.

Since 2019, the world economic situation has become increasingly complex. The global spread of the COVID-19 epidemic this year has brought severe challenges to the economy and society. Country Garden adheres to the "steady and far-reaching" and sound management strategy, which is more leisurely at a time of drastic fluctuations in the market.

According to the financial report, as of June 30, 2020, the total interest-bearing liabilities of country Garden fell 7.5 per cent to 342.04 billion yuan from 369.6 billion yuan at the end of last year. The financing cost at the end of the first half of the year was 5.85%, down 49 basis points from the end of last year. Corporate finance continued to be sound, and financing costs were further reduced.

With the novel coronavirus epidemic under control and the economy recovering steadily, country Garden sales have achieved six consecutive months of year-on-year growth since March. According to enterprise announcements, cumulative equity sales in the first eight months of this year were about 382.16 billion yuan, an increase of 2.91 percent over the same period last year, of which country Garden realized equity sales of about 60.93 billion yuan in August, an increase of 30.1 percent over the same period last year. Country Garden has been listed on the Fortune 500 list for the fourth year in a row since 2017, and the latest ranking in 2020 climbed 30 places from the previous year to 147.

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