Fitch Ratings affirmed China Jinmao Holdings Group Ltd.'s long-term foreign currency issuer default rating at BBB-, with a stable outlook.
The rating agency said Sept. 27 that it also affirmed the Hong Kong-based real estate company's senior unsecured rating at BBB-.
The affirmation takes into account the company's moderate operational linkage to parent Sinochem Hong Kong (Group) Co. Ltd., which Fitch expects to provide operational and financial support to the unit.
China Jinmao's standalone credit profile is supported by the continued strong performance of its property development business, which is driven by its quality land bank and strong positioning in tier one and two cities, the rating agency said.
Fitch expects China Jinmao's leverage to constrain its rating, with the rating agency estimating that the company's leverage will stay below 45% in 2019 and that its deleveraging will continue thereafter.
The rating agency added that it believes China Jinmao has sufficient quality land bank to support its deleveraging, but the likelihood of leverage improving to below 35% — the level at which Fitch may consider positive action — over the next 18 to 24 months is low due to the company's pursuit of larger sales scale.
