Chinese property developers to post stable 2016 results

     Moody's Investors Service said that Moody's-rated Chinese property developers will demonstrate stable margins and interest coverage levels for full year 2016 when compared to full year 2015.
  "The developers' full year 2016 margins and interest coverage levels will likely improve from the levels seen in H1 2016, due to less destocking pressure, higher completion rates and lower funding costs," said Stephanie Lau, a Moody's Assistant Vice President and Analyst.
  "We also expect that the developers' healthy sales growth will continue in H2 2016, but at a slower pace than was seen in H1 2016," added Lau.
  Moody's conclusions are contained in its recently-released report titled "Property - China: First-Half 2016 Results Signal Full-Year Metrics Will Remain Stable".
  Moody's pointed out that the average revenue/adjusted debt for all Chinese developers that Moody's rates deteriorated slightly to 68% for the 12 months ended 30 June 2016 from 71% for full-year 2015. Nevertheless, excluding China Evergrande Group (B2 negative) - which accounted for 23% of the rated portfolio's debt for the period - the ratio for the 12 months ended 30 June 2016 remained stable versus full-year 2015.
  As for revenue/debt, Moody's said the ratio for year-end 2016 should be similar to the 71% for year-end 2015, as rated developers schedule higher completion and revenue recognition in H2 2016. And, the pace of debt growth will likely moderate.