China Aoyuan Group Limited (Initial Issuer Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has assigned a ‘BB+’ global scale Long-term Issuer Credit Rating to China Aoyuan Group Limited. The Outlook is Stable.

The Issuer Rating reflects China Aoyuan Group Limited (“Aoyuan” or “the company”)’s continuous improvement in market position and brand recognition in the Chinese property market. The rating also considers the Guangzhou-based company’s adequate liquidity position and good access to market funding. However, its moderately high financial leverage and average profitability constrain its rating.

The Stable Outlook reflects our expectations that Aoyuan would acquire new land in a measured manner, lower its financial leverage, and continue to improve its operating efficiency gradually by delivering projects under development at a pace more commensurate to its contracted sales growth to boost its recognized revenues in the following 12 to 24 months.