Fitch rates Modern Land local-currency B rating

Fitch Ratings said it affirmed Modern Land (China) Co., Ltd.’s long-term foreign-currency issuer default rating at B with stable outlook.

The agency also said it affirmed the company’s foreign-currency senior unsecured rating at B and recovery rating at RR4.

Fitch also assigned a long-term local-currency issuer default rating of B to the company.

Modern Land’s limited scale in terms of land bank, contracted sales and geographical coverage leaves the company susceptible to greater volatility in earnings, the agency said.

Its scale is commensurate with homebuilders rated in the B category, Fitch said.

The increase in the company’s contracted sales from ¥2.3 billion in 2011 to ¥4 billion in 2013 also was driven by the company’s low-cost housing project in Beijing, which has limited contribution to the group’s profitability, the agency said.

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