Fitch: No Impact on Jingrui's Rating from Profit Warning

Fri Jul 25, 2014 2:17am EDT

(The following statement was released by the rating agency) HONG KONG, July 25 (Fitch) Fitch Ratings says Jingrui Holdings Limited's (Jingrui; B/Stable) profit warning for its results for 1H14 has no impact on its ratings. The substantial decrease in revenue and the possibility the company could post a loss is mainly due to the delivery schedule of its projects, which does not affect Jingrui's cash flow and credit profile substantially. Fitch expects the majority of this year's project deliveries to fall in 2H14. Fitch estimates that Jingrui's leverage (net debt over adjusted inventory) increased to nearly 55% at end-June 2014 from 44% at end-2013. The company's expenditure on land acquisitions of about CNY3bn in 1H14 was high relative to its contracted sales of CNY3bn, which contributed to the increase in leverage. However, Fitch expects Jingrui's leverage to drop towards 50% as more property sales are generated in 2H14 than in 1H14. Hence, Jingrui's leverage is likely to remain below 60% (above which negative rating action may be considered) in 2014, unless it acquires land aggressively in 2H14. Jingrui's leverage, a key constraint on its ratings, is at the high end of levels among its 'B'-rated peers. Contact: Alex Choi Associate Director +852 2263 9969 Fitch (Hong Kong) Limited 28th Floor, Two Lippo Centre 89 Queensway, Hong Kong Michelle Leong Associate Director + 852 2263 9929 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: Additional information is available at ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.