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Moody's revises outlook on Beijing Capital Land rating

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.