Microsoft Word - Rating Agency Fitch Assigns First Time 'BB-' Rating to Yuzhou Properties (01628.HK)

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Rating Agency Fitch Assigns First Time 'BB‐ ' Rating to Yuzhou Properties (01628.HK) with Stable Outlook

(2 September 2015, Hong Kong) Yuzhou Properties Company Limited ("Yuzhou Properties" or the "Company", together with its subsidiaries referred to as the "Group"; stock code: 01628.HK), the leading Fujian‐based property developer, is pleased to announce that Fitch assigns rating to Yuzhou Properties. Supported by its strong position in core markets, favourable margin compared with that of its peers, healthy liquidity and moderate leverage, Yuzhou Properties is assigned a Long Term Foreign Currency Issuer Default Rating (IDR) of 'BB‐' with Stable Outlook and a senior
unsecured rating of 'BB‐'.
Fitch points out that Yuzhou Properties has strong advantage in its core market - Xiamen. It was the No.1 homebuilder by sales in Xiamen for 10 consecutive years and it has leading market positions in Fujian Province's top three cities and has successfully expanded into Hefei. The company seeks to replicate its success in Xiamen and Hefei to new markets like Shanghai, Fuzhou and Nanjing. In the next three to five years, it aims to achieve annual contracted sales of CNY5bn in each of these five cities, solidifying its regional presence.
On the other hand, Yuzhou's EBITDA margin is between 25% and 35% and well above the average 20% of 'BB‐' rated homebuilders in China. Yuzhou is committed to a prudent land acquisition policy, which has limited the ratio of land costs to average selling prices to around 20%. Meanwhile, the company targets both first time home buyers and upgraders, which helps it to maintain a moderate sell through rate, and hold reasonable inventory while maximising margin through high‐end, high quality projects.
Yuzhou's current liquidity position is healthy and strong, which supports its planned expansion. At end June 2015, Yuzhou had sufficient cash in hand, which exceeded its short term debt. The company has also established diversified funding channels. Yuzhou has maintained a healthy leverage, as measured by net debt to adjusted inventory, of 29% at end 2014. Yuzhou's leverage at end June 2015 rose to 33%. This
will reverse in the second half as the company's sales increase, given it will have more projects launch. Fitch expect its leverage will stay around 35% in the next two years as a result of its planned expansion.
Mr. Lam Lung On, Chairman of Yuzhou Properties, commented: "The rating report from Fitch fully affirmed the position of Yuzhou being a strong regional leader. Yuzhou will seek advantages of developing in Xiamen, Hefei, Shanghai, Fuzhou and Nanjing and will increase yearly contract sales to RMB 5 billion each in the future 3 to 5 years. We will devote to improve the financial strength, solidifying the market leadership, devoting ourselves to providing better returns to our shareholders."
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About Yuzhou Properties

Yuzhou Properties Company Limited (01628.HK) is a leading property developer in the West Strait Economic Zone and is one of the largest property developers in Xiamen, in terms of land reserve and market share. Yuzhou Properties strives to become a leading property developer in China with a well‐defined expansion strategy as to enhance its dominant market position in the West Strait Economic Zone and to establish footprints in the Yangtze River Delta Region and Bohai Rim Region respectively.
Established in 1994, Yuzhou Properties specializes in the development of high quality residential, retail and commercial projects. As at 2 September 2015, the Company had around 47 projects under various stages of development in Xiamen, Fuzhou, Quanzhou, Longyan, Shanghai, Hefei, Bengbu, Tianjin, Zhangzhou and Hong Kong. Sites measuring a total GFA of 8.88 million sq. m. are under development or held for future development. Those located in Xiamen measure a total GFA of 2.22 million sq. m and in Hefei measure a total GFA of 2.54 million sq.m. Known for its outstanding product quality and diversified product portfolio, strong brand awareness and its experienced management team, Yuzhou Properties has been named "Top 100 China Real Estate Enterprises" for ten consecutive years; and Top 50 China Real Estate Enterprises from
2011 to 2015. "Yuzhou" brand has been recognized by the State Administration for Industry and Commerce as a "Renowned Brand in China" and a "Famous Brand" by the Fujian provincial government and the Xiamen municipal government.
For more information about Yuzhou Properties, please visit the company's website:
http://www.xmyuzhou.com.cn
Please feel free to contact us if you have any enquires:
Yuzhou Properties Company Limited (HKEX: 01628) Manager of Corporate Finance & Investor Relations/
Assistant Manager of Corporate Finance & Investor Relations
Sophie Zhang/ Minnie Li
Tel ：(852) 2508 1718
Fax ：(852) 2510 0265
Email ：zhangsy3@xmyuzhou.com.cn/ minnie.li@xmyuzhou.com.cn
Yuzhou Properties Investor Relations QR Code:

Wonderful Sky Financial Group Holdings Limited (HKEX: 01260) Alice Wong / Sylvia Deng
Tel ：(852) 2851 1038
Fax ：(852) 2598 1588
Email ：alicewong@wsfg.hk/sylviadeng@wsfg.hk

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