Fitch Ratings affirmed China Resources Land Ltd.'s long-term issuer default rating and foreign-currency senior unsecured ratings at BBB+.
The outlook is stable.
The affirmation reflects the developer's stable financial profile and healthy operating cash flow from its development properties. The rating agency expects the company to see continuous growth in its investment property portfolio through 2022, backed by a pipeline of good quality properties in Tier 1 and Tier 2 cities.
Fitch said it expects revenue from the company's investment properties to grow under 30% in 2019, and then continue to increase in the low teens through 2022.
In 2018, China Resources' rental income from its portfolio, excluding hotels, rose 26% to 8.1 billion yuan, while first-half 2019 income rose 35% year over year to 5.0 billion yuan. Contracted sales climbed 39% to 211 billion yuan in 2018, and increased 26% to 118.8 billion yuan in the first half of 2019.
Further, the rating agency noted that the company will likely maintain enough land bank for development in the next three to five years if its land replenishment remains high in 2019 at 1.6x.
As of Sept. 13, US$1 was equivalent to 7.08 Chinese yuan.
