Moody's revised its outlook on Beijing Capital Land Ltd.'s Ba3 corporate family rating to stable from negative.
The revision was attributed to expectations of a sustained improvement in the residential property developer's gross profit margins, which jumped to 26.7% in 2017 from 12% to 13% in 2016 and 2015, thanks to the delivery of high-margin projects in Beijing, Shanghai and Tianjin, accounting for about 75% of the year's revenue. The rating agency expects the Beijing-based company to maintain a gross profit margin of roughly 25% over the next 12 to 18 months amid its focus on tier 1 and major tier 2 cities.
Moody's also expects the company's robust contracted sales growth over the last couple of years to drive year-over-year revenue growth of about 20% over the next 12-18 months.
