Fitch Ratings affirmed Guangzhou R&F Properties Co. Ltd.'s BB- long-term foreign- and local-currency issuer default ratings, with a stable outlook.
Fitch noted that the Chinese property developer's ratings are restrained by its 55% leverage as of end-June. Following a reduction in the company's land acquisitions for the second half of 2019, the rating agency expects a drop in the company's leverage to 56.5% by year-end.
Meanwhile, because of a slowdown in Guangzhou R&F's expansion, Fitch also predicts that the company's leverage will remain below 55% from 2020 to 2022. The rating agency added that moderately long land-bank life allows it to maintain a high development properties EBITDA margin of above 30%.