Country Garden downgraded: Weak sales and margin outlook
S&P Global Ratings lowered its long-term issuer credit rating on Country Garden to 'BB' from 'BB+' on Sept. 19, 2022. “Sales decline had been more than we expected amid a prolonged industry downturn. This will weigh on the China-based developer's leverage and liquidity buffer over the next one to two years,” said the rating agency.
In S&P’s view, the developer has high exposure to lower-tier cities, with 66% saleable resources in these areas, and it will continue to face weaker and more volatile property demand in the coming months. Contracted sales in the remaining months of 2022 is therefore unlikely to meaningfully recover, after a 39% year-on-year dip during the first eight months of the year. Meanwhile, the company's construction expenditure is expected to remain higher than peers.
The rating agency also expect Country Garden ‘s margin pressure to persist as suggested by the impairment provision on inventory during the first half of 2022.
Proactive debt management, sales stabilization, coupled with access to onshore funding channels will be key to avoid further leverage and liquidity deterioration, S&P noted.
-- Contact us at [email protected]
-
One day, two mountains in Hong Kong Ben Kwok
Heavy rain poured again this morning in Guangdong and I was stuck at a building near the East station to catch the first high-speed train back to Hong Kong. A security guard approached this puzzled
-
Not a Happy Valley! Ben Kwok
Bad news does not come singly in Happy Valley! Days after Hong Kong Jockey Club suspended the two jockeys Vagner Borges and Silvestre de Sousa for their betting offences, more shocking news came from
-
Crowdsourced maps can enhance city’s efficiency and flexibility Dr. Winnie Tang
Although Britain's global influence has dwindled, its soft power should not be underestimated. The coronation of King Charles III is the latest showcase of its great marketing which, as The Economist
-
Reflections on the HKU President’s Forum: Science and Society Dr. Winnie Tang
In recent years, Hong Kong has emphasised the importance of learning STEM, and there is nothing more valuable than listening to top scientists from around the world and Professor Xiang Zhang, the
-
Will Hong Kong government get more tax revenue next year? Ben Kwok
Bad news is tax season is coming. Worse, the Hong Kong SAR government expects a five per cent drop in tax revenue in the financial year ended 31 March 2023, raising fear that we might need to pay
