High-quality land bank and strong execution, stable profitability and financial leverage
HONG KONG, CHINA – Media OutReach – 22 October 2020 – CIFI Holdings (Group) Co. Ltd. (“CIFI” or the
“Group”, HKEx stock code: 884), a leading real estate developer and
investor in first-, second- and robust third-tier cities in China, is pleased
that Lianhe Ratings Global Limited (“Lianhe”), an international credit rating
company, has upgraded CIFI’s global scale long-term issuer credit rating to “BBB-”
from “BB+” and the outlook is stable. The upgrade reflects CIFI’s leading
position in the Chinese property developer market, a track record of prudent
operating performance, consistent profitability and financial leverage, and
financial discipline demonstrated in the past years. The move is a recognition
of the Group’s outstanding performance.
Lianhe rating report expected that CIFI will continue expanding
its franchise, diversifying revenue source, and replicating the success in the
Yangtze River Delta region to continue expanding and deepening its footprint
nationally by formulating the strategy of centralized financing, investing and
decision-making platform while delegating its project management to the seven
decentralized regional teams and offices to streamline the operation to achieve
a high efficiency.
Lianhe stated that CIFI reported contracted sales of over RMB80 billion
in 1H2020 despite the COVID-19 outbreak in early 2020 and achieved a
single-month record-high contracted sales of RMB25 billion in June 2020. CIFI
was ranked 18th in terms of gross contracted sales by CRIC in the 1H2020 which
placed it among the top 20 leaders of the Chinese property market and ranked
among the top 10 players (mostly) within the company’s top 10-city coverage
which further solidifies its market leader position.
The report also stated that CIFI’s high-quality land bank covers
over 60 cities helps reducing its policy risk. Together with its strong
execution, Lianhe believed that the Group would be able to maintain its gross
margin and profitability in the next 12 to 18 months even under the pressure of
increasing land-banking expenses.
Furthermore, Lianhe believed that CIFI’s management is mindful of
cost control and the use of financial leverage while growing a national
franchise and delivering projects by their preset metrics. Its attributable
land bank of 27.7 million square meters at end-June 2020 was sufficient to
support the company’s growth target for the next three years. This allows a
flexible headroom of land acquisition targets, therefore aggressive land-banking through increasing financial leverage is
hence unlikely.
Mr. Lin Zhong, Chairman of CIFI,
said “We welcome the upgrade of our global scale long-term issuer credit rating
by Lianhe. The move is the capital market’s recognition of CIFI’s excellent
business and financial performance. Looking ahead, CIFI will continue to achieve
efficient and high asset-turnover operating strategies to consolidate our leading
position in the Chinese property market and generate encouraging return to our
shareholders.”
Lianhe is an international credit rating company that provides
credit ratings to corporations, banks, non-bank financial institutions, local
government financing vehicles, and other asset classes around the globe. Lianhe
also provides credit risk research and other services related to credit
ratings.
About CIFI (Group):
Headquartered
in Shanghai, CIFI is one of China’s top real estate developers. CIFI
principally focuses on developing high-quality properties in first-, second-
and select third-tier cities in China. CIFI develops various types of
properties, including residential buildings, offices and commercial complexes.
To
learn more about the Company, please visit CIFI’s website at:
http://www.cifi.com.cn