The bond issuances will help Wuzhou lengthen its debt maturity

Опубликовано 25 января 2014
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Canada Goose Outlet Fitch Affirms Wuzhou International Holdings at ‘B’ Canada Goose Outlet

canada goose black friday sale (The following statement was released by the rating agency) HONG KONG, September 16 (Fitch) Fitch Ratings has cheap canada goose uk affirmed China based Wuzhou International Holdings Limited’s (Wuzhou) Long Term Issuer Default Rating (IDR) at ‘B’. The Outlook is Stable. Fitch has also affirmed Wuzhou’s senior unsecured rating at ‘B’, and Recovery Rating at ‘RR4’. The affirmation canada goose store is due to the commercial property developer’s ability to increase its contracted sales in the past 12 months and canada goose uk outlet diversify outside Jiangsu province. Wuzhou has improved its debt structure by lengthening its debt maturity profile and reducing its reliance on secured debt and trust borrowings. Canada Goose Jackets Wuzhou’s lower EBITDA margin is likely to be permanent in view of more sales in third tier cities. While its leverage (net debt/adjusted inventory) may continue to increase, Fitch expects it will stay within 40%. KEY RATING DRIVERS Diversifying Outside Jiangsu Province: Contracted sales from Jiangsu province fell to 54% of total cheap Canada Goose sales in 2013 from 72% in 2012, following the launch of projects in other provinces such as canada goose uk shop Zhejiang, Henan, Yunnan and Hubei. This was supported by a 33% year on year rise in contracted sales in 1H14 to 46% of Wuzhou’s full year target of CNY6.5bn. We expect the geographical canada goose black friday sale diversification to continue as Wuzhou’s projects are spread across more provinces than a year ago. Improved Debt Structure: uk canada goose outlet Wuzhou has improved its capital structure after two offshore bond issuances totalling USD200m in September 2013 and January 2014. It will improve further with Canada Goose Online an upcoming USD100m convertible bond canada goose coats on sale issue. The bond issuances will help Wuzhou lengthen its debt maturity profile and reduce canada goose clearance sale its reliance on canada goose clearance secured debt. At end June 2014, 26% of its debt was unsecured, compared with nil a year earlier. Wuzhou also relied less on trust borrowings, which constituted 17% of total debt at end 2013, down Canada Goose Parka from 28% at end 2012. Lower Margin to be Sustained: Wuzhou’s uk canada goose gross profit margin peaked at canadian goose jacket 53% in 2012 coat and fell to Canada Goose online 44% in 2013. buy canada goose jacket It further decreased to 41% in 1H14. We believe it is caused by more project deliveries in third tier cities. We expect the decline to be permanent with margin hovering around the current level. Wuzhou’s EBITDA margin was also affected by high sales, general and administrative (SG expenses related to expansion into new cities. We believe Wuzhou can only trim its SG expenses meaningfully after it slows down its expansion. Leverage Rising: Wuzhou doubled its contracted sales in 2013 by developing projects outside Wuxi. The expansion was partly funded by its IPO in the middle of 2013, and its leverage remained steady at 30% at end 2013. Leverage rose to 33% in mid 2014 due to a lower cash collection rate and continued construction capex. Fitch expects its leverage to further increase, but in a controlled manner. Leverage will only exceed the 40% level at which Fitch would consider negative rating action if cash collection continues to be weaker than our expectation or Wuzhou acquires land aggressively. Partners Raise Wuzhou’s Profile: Fitch believes that Wuzhou’s agreements to cooperate with Ping An Real Estate and Global Logistics Properties (GLP; BBB+/Stable) separately in providing financial services to Wuzhou’s SME clients and co developing wholesale centres and logistics facilities may enhance the competitiveness of Wuzhou’s projects. Wuzhou canada goose can tap GLP’s expertise in logistics and storage facilities and raise capital from Ping An for project development. Since the cooperation agreements are still at the preliminary stage, the earnings and capex requirements will be minimal. RATING SENSITIVITIES Positive: Future developments that may collectively lead to positive rating actions include: Annual contracted sales being sustained above CNY8bn while maintaining current margins and credit metrics, and Increase in geographical diversification by establishing its presence in a greater number of provinces, and Satisfactory operating conditions for completed projects, in particular for those that have been open for more than three years Negative: Factors that may, individually or collectively, lead to negative rating action include: A significant reduction in annual contracted sales Deviation from the current fast churn out business model Net debt/adjusted inventory being sustained above 40% (end June 2014: 33%) EBITDA margin staying below 20% buy canada goose jacket cheap on a sustained basis (1H14: 25%) Contracted sales/ total debt staying below 1.0x on a sustained basis (end June 2014: 1.2x). PLEASE READ THESE LIMITATIONS canada goose factory sale AND DISCLAIMERS BY FOLLOWING THIS LINK: here. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL canada goose uk black friday 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 canada goose coats OF THIS SITE. FITCH MAY HAVE Canada Goose Outlet 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 Canada Goose sale SUMMARY PAGE Canada Goose Coats On Sale FOR THIS ISSUER ON THE FITCH WEBSITE canada goose black friday sale.

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