Fitch affirms CIFI’s ‘BB’ rating and outlook stable; removes CIFI from UCO list

HONG KONG
SAR – Media
OutReach – 28 January 2022 – 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 Fitch Ratings has issued a report to affirm CIFI’s long-term foreign and
local -currency issuer default ratings at ‘BB’; the Outlook is ‘Stable’. In
addition, CIFI has been removed all the ratings from Under Criteria Observation
(UCO) by Fitch Ratings.

Fitch’s report points out that CIFI’s
business and financial profiles remain commensurate with a ‘BB’ credit profile.
Fitch believes CIFI’s above-average financial flexibility is supportive of the
rating despite its higher leverage of 50% compared with peers’ 40-45%.

The Stable Outlook reflects Fitch’s
belief that CIFI has strong liquidity and continued access to capital-market financing
in both onshore and offshore markets to refinance its maturities in 2022. Fitch
believes CIFI’s leverage to fall to 45%-50% in 2022-2023 from an estimate of
around 50% in 2021 due to a slowdown in land acquisition and a continued
ramp-up of its investment properties.

Fitch also believes CIFI’s quality
land bank, with more than 85% in tier 1-2 cities, will make it more resilient
in the downturn and can sustain two-three years of development and a sales
scale above RMB 220 billion in 2022-2023.

Mr. Lin Zhong, Chairman of CIFI, said
“We welcome Fitch to affirms our rating which is the capital market’s
recognition of our business development and financial strength. The management
flexibly deploy our capital to proactively manage the Group’s debt structure
and portfolio. We strive to enhance our capability to withstand the risks of
both the industry and the economic cycle. All these efforts can ensure the
Group’s healthy financial position and sustainable business development in the
long term.”

 

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