Moody's revised Logan Property Holdings Co. Ltd.'s outlook to positive from stable and affirmed its Ba3 corporate family rating and B1 senior unsecured debt rating.
The rating agency said Sept. 5 that the outlook revision is driven by its expectations that the Chinese real estate developer's credit metrics will improve over the next 12 to 18 months due to strong revenue growth and good profit margins. It also expects that Logan Property's strong brand and market position in the Greater Bay Area of China will boost the company's contracted sales to between 85 billion yuan and 90 billion yuan in 2019.
Further, the company's gross profit margin is estimated to remain between 31% and 32% over the next 12 to 18 months because of its low-cost land bank. The company's debt leverage, as measured by revenue/adjusted debt, is expected to improve to 75% to 80% over the same period from 75% in the year ended June 30, while its adjusted EBIT/interest is estimated at 4.0x-4.5x, compared with 4.6x in the 12-month period ended in June.
As of Sept. 5, US$1 was equivalent to 7.15 yuan.
