[ET Net News Agency, 24 March 2021] Moody's Investors Service has today downgraded
Yuzhou Group Holdings Company Limited's (01628) corporate family rating (CFR) to B1 from
Ba3, and its senior unsecured rating to B2 from B1.
At the same time, the outlook was changed to negative from stable.
"The downgrade of Yuzhou's ratings follows its recent profit warning and reflects our
expectation that its revenue recognition will be weak, due to the company's slow delivery
of presold projects. As a result, the company's key credit metrics will stay weak in the
next 12-18 months and will no longer be supportive of its previous Ba3 CFR," said Celine
Yang, a Moody's Assistant Vice President and Analyst.
"Meanwhile, the negative outlook reflects the uncertainties over the company's ability
to improve its revenue recognition and financial metrics over the next 12-18 months, as
well as our expectation that its access to funding will weaken as a result," added Yang.
Yuzhou's B1 CFR reflects its 1) track record of developing and selling residential
properties in the Yangtze River Delta, Bohai Rim and West Strait area, 2) geographic
diversification in different economic regions in China, and 3) good liquidity. (KL)