Moody's lifts Shimao view to positive

Moody's Investors Service said it revised to positive from stable the outlook on Shimao Property Holdings Ltd.'s Ba2 corporate family rating and Ba3 senior unsecured rating.

The agency also affirmed those ratings.

The positive outlook reflects an expectation that Shimao will improve its credit metrics, supported by strong contracted sales execution over the next 12- to 18-months, Moody's said.

Shimao's contracted sales increased 75% year-on-year to RMB 155 billion in the first 11 months of 2018, following 48% year-on-year sales growth to RMB 100.8 billion in 2017, the agency said.

The stronger-than-expected sales performance was due to the company's improved product designs and broadened product offerings, Moody's said.

The agency said it expects Shimao will achieve 64% year-on-year growth to RMB 165 billion in 2018, 18% higher than its target of RMB 140 billion.

Shimao also is expected to grow its contracted sales by about 21% to RMB 200 billion in 2019, despite an expectation of an overall 5% year-on-year decline in the overall value of new home sales in China in 2019, Moody's explained.

The company's exceptionally strong sales performance and good liquidity position will enable it to take market share from weaker developers in a challenging environment, the agency said.

© 2015 Prospect News.
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