Dexin China Holdings Company Limited (Initial Issuer Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has assigned ‘BB-’ global scale Long-term Issuer Credit Rating to Dexin China Holdings Company Limited; Outlook is Stable

The Issuer Rating reflects our assessment of Dexin China Holdings Company Limited’s (2019.HK) (“Dexin China” or “the company”) improving operating scale, adequate profitability, and regional market franchise. The rating also considers Dexin China’s capability to grow from its home base in Zhejiang Province into new regions. The rating constraints include the company’s moderately high financial leverage, tight liquidity, and short track record of limited visible operating history.

The Stable Outlook reflects our expectation that Dexin China will maintain a steady financial position balancing between debt-funded growth and footprint expansion to diversify its projects /land bank geographic concentration by using its sizeable contracted sales proceeds to partially fund its expansion. At the same time, we expect the company to gradually pivot away from the reliance on short-term funding and trust loans in the medium term.