S&P Global Ratings assigned Jingrui Holdings Ltd. a B long-term corporate credit rating, with a stable outlook.

The given rating corresponds to the Chinese real estate developer's small-scale operation, small market share, weak competitiveness in its core markets and lower profitability compared to its peers. The company is expected to lift its leverage to replace its small land bank in the lower-tier cities, while it targets expansion in higher-tier cities, and to drive the recovery of its profitability.

The rating agency is of the view that the developer's strategic shift involving more exposure toward higher-tier cities is largely complete, and although the effects from projects in lower-tier cities is diminishing, there is still some impact.

The stable outlook represents S&P's projection that Jingrui will improve its contracted sales gross profit margin to about 23% to 25% over the next two years and maintain a high financial leverage.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.