Fujian Yango Group Co., Ltd. (Surveillance Report)

The Issuer Rating affirmation reflects Fujian Yango Group Company Limited’s (“Fujian Yango” or “the company”) leading market position and brand recognition in the Chinese property market operated by its main subsidiary Yango Group Company Limited (“Yango”, ‘BB’/Stable), high financial leverage and moderately weak profitability. The rating also considers Fujian Yango’s standalone soft liquidity profile and significant indebtedness.

The Issuer Rating’s Stable Outlook reflects our expectation that Fujian Yango would remain prudent in non-property acquisitions and continue maintaining a controlling stake in Yango, which would acquire new land in a disciplined manner. This will help moderately improve its financial leverage and EBITDA interest coverage in the following 12 to 18 months.