Fitch Revises Redco’s Outlook to Positive
Fitch indicates in its report that the Outlook revision reflects the Company’s consistent growth in its sales and scale, as well as its geographical diversification. Fitch believes that the Company can maintain a low leverage ratio as the company continues to boost its land bank size to sustain rising contracted sales, and the company has saleable resources for around four years of development. Fitch has maintained the Group’s long-term foreign-currency issuer default rating (IDR) and senior unsecured rating at “B”.
In 1H2020, the Group registered record-high contracted sales of RMB13.02 billion with year-on-year growth of 19.3%. This indicates the Group has successfully resumed the construction and sales of properties while maintaining prudent operations after the pandemic, assuring the market of its sales performance for 2H2020 with high certainty. Additionally, multiple top-tier international financial institutes are optimistic about the Group’s business and comments that Redco’s has a sound credit profile and refinancing risks are controllable. As of the end of 2019, the Company had a land bank presence of 89 projects over 25 cities, amounted to 14.6 million sq. m. of GFA which included core regions such as Nanchang, Tianjin, Jinan and the Greater Bay Area. The Company’s quality products, ample land bank, and outstanding leverage ratio allowed the Company to achieve high growth during the pandemic.
The Group provides a wide variety of products, ranging from residential buildings, office buildings, to commercial buildings and hotels which are under four product lines, i.e. “Yong”, “Jun”, “Yue”, and “Hua” to cater home purchasers’ individual needs. Also, benefiting from the Group’s department of diversified business, the Company has the advantages in land acquisition channels and costs, which, coupled with a premium product mix and relatively stable costs, the Group has transitioned into a fast-churn model developer while maintaining a stable and healthy gross profit margin. Meanwhile, the Group has launched an online house purchase platform “Redco UG” to create a new model of sales and introduce the “New Oriental Green Architecture” concept to diversify its product differentiation and advance the quality growth of the Group.
About REDCO PROPERTITIES GROUP LIMITED
The Group is an integrated property developer focusing on property development with efforts in diverse business portfolio including health care, commercial properties, technology, property management, culture tourism and education. The Group has been upholding the brand philosophy of “quality architecture lays the foundation of quality life” and has successfully entered the Guangdong-Hong Kong-Macao Greater Bay Area, Yangtze River Delta, Bohai Rim, as well as high-value and high-growth areas such as Wuhan and Nanchang through its sound and pragmatic approach to business, forward-looking investment strategy, quality products and high operational efficiency. The Group successfully entered the Australian market in 2016. To date, the Group has made into the list of China’s top 100 developers and continued to expand rapidly, becoming a leading property developer with high competitiveness and a reputable brand image. In January 2014, the Group was listed on the Main Board of the Hong Kong Stock Exchange.
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