Moody's assigned Zhongliang Holdings Group Co. Ltd. a B1 corporate family rating, with a stable outlook.
The rating reflects the real estate development company's strong brand in second-tier and lower-tier cities in the Yangtze River Delta region of China and its contracted sales growth, according to Cedric Lai, a vice president and senior analyst at Moody's. The rating agency expects Zhongliang Holdings to expand into other regions in China while reducing its exposure to local regulatory measures and regional economy volatility. The company's contracted sales are predicted to grow 10% to 15% per year to between 120 billion yuan and 140 billion yuan in the next 12 to 18 months.
Moody's expects the developer's debt leverage to weaken to 75% to 85%, and its interest coverage to remain at 2.6x over the next 12 to 18 months, taking into account expected lower finance cost after the company's listing on the Hong Kong Stock Exchange and its improved access to onshore and offshore funding.