Sinic Holdings assigned by Fitch Ratings of 'B+' with a Stable Outlook
HONG KONG, June 9, 2020 /PRNewswire/ -- Sinic Holdings (Group) Company Limited ("Sinic Holdings" or the "Company", together with its subsidiaries, the "Group", stock code: 2103.HK) announces that Fitch Ratings has assigned the Company a Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'B+' with a Stable Outlook. Moreover, Fitch has also assigned Sinic Holdings a senior unsecured rating of 'B+' with a Recovery Rating of 'RR4'.
Fitch believed that the Company's rating is supported by its diverse land bank, healthy contracted sales growth, fast sales churn and good margin. Sinic Holdings has strong brand recognition in Nanchang and Jiangxi province and was the top-selling developer in Jiangxi from 2017 to 2019. It is also the third largest developer in Guangdong Huizhou in terms of contracted sales in 2019. In addition, Sinic Holdings has been expanding its markets outside of Jiangxi and has strengthened its presence in Greater Bay Area, Yangtze River Delta and Central Western China. At the end of 2019, it had 117 projects over 36 cities across China, with 85% of its land in tier 1 and tier 2 cities. Company's attributable contracted sales grew by 30% in 2019 to CNY45.1 billion, with an average selling price (ASP) of CNY13,083 per sq m. The 30% growth was mainly driven by GFA sold.
The Company's attributable unsold land reserves of 10.4 million sq m at end-2019 are sufficient for development over the next three to four years. This means that the Company is not under immediate pressure to replenish its land bank to sustain contracted sales growth, which allows the Company more room to lower its leverage and control its land cost. Fitch believes cautious land acquisition will support its EBITDA margin to stay at above 28% in 2020 and above 24% in forecast period. But with more and more expensive trust loans being replaced by low-cost financing, Fitch believed that the financing cost of Sinic Holdings is expected to continue to decline. Its IPO in November 2019 also improves its access to funding.
The Co-Chairman and Executive Director of Sinic Holdings, Mr. Zhang Yuanlin said, "The Fitch Ratings is evidence of our long-term investment value, and highlights the recognition of the rating agency of the Company's performance, stable financial position and high-quality development model. It will also be conducive to the financing of Sinic Holdings in the capital market at a lower cost in the future. Looking forward, in terms of sales, we will adopt a more active and agile product sales and pricing strategy in response to the market change. In terms of operations, we will adjust the delivery cycle in a timely manner according to market demand. In terms of finance, we will carry out a more prudent financial policy and strengthen cash flow management with an aim of securing steady development with a healthy financial condition. Sinic Holdings will consolidate its current market position and further accelerate development of its business, striving to achieve the strategic development of 'laying a solid foothold in Jiangxi for nationwide development."
About Sinic Holdings (Group) Company Limited
Sinic Holdings (Group) Company Limited is a large-scale and comprehensive property developer in the PRC, focusing on the development of residential and commercial properties. Through over 10 years of operations, the Company has successfully established a leading position among residential property developers in Jiangxi Province and expanded its property development business into the Yangtze River Delta Region, the Greater Bay Region and the Central and Western China Core Cities and other regions with high-growth potential. According to the rankings of CRIC, China Index Academy and EH Consulting, the company ranked 36th, 32nd, and 31st in terms of sales amount (including all income) among real estate development enterprises of China in 2019. The Company was recognized as one of the China's Top 50 Real Estate Developers jointly by the China Real Estate Industry Association, Shanghai Yiju Real Estate Research Institution and China Real Estate Appraisal in 2018 and 2019, and one of the China's Top 30 Real Estate Developers in 2020 and Growth Top 10 in 2020 by the China Real Estate Top 10 Research Committee and China Index Academy in 2020.
The Company residential properties can be categorized into three major series, namely, the"Wan" Series, the "Yuan" Series and the "Yue" Series, which target first-time home purchasers, home upgraders and extended families or high-income households, respectively. As of December 31, 2019, the total land bank attributable to the Company amounted to approximately 15.09 million sq.m., and the Company had 117 projects at various stages of development.