Moody's: Chinese developers face challenges

Moody's Investors Service said Chinese property developers face enormous opportunities over the long term, but strong challenges also are apparent, including the market's high level of government intervention and rapid growth.

The developers operate in an industry that has achieved tremendous price and volume growth in recent years. As a result, many have established profitable enterprises, the agency said and some have listed in Hong Kong or Shanghai.

The industry's outlook remains strong, driven by massive ongoing urbanization and likely continuing medium-term price growth, due in turn to rising GDP and personal consumption power, Moody's added.

The risk of regulatory uncertainty in China's property markets is high, Moody's said. The authorities regularly implement administrative and regulatory steps to curb overheating and improper practices, making the regulatory environment unpredictable for developers and homebuyers, the agency added.

Moody's has rated seven property developers in China, including China Overseas Land and Investment Ltd., rated Baa3 with stable outlook, Shimao Properties Holdings Ltd., rated Baa3 with stable outlook, Greentown China Holdings Ltd. rated Ba2 with stable outlook, Hopson Development Holdings Ltd., rated Ba2 with stable outlook, Agile Property Holdings Ltd., rated Ba3 with stable outlook, Shanghai Real Estate Ltd., rated B1 with stable outlook and HKI Properties Ltd., rated provisional B2 with stable outlook.

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