Jiangsu Zhongnan Construction Group Co., Ltd. (Issuer Rating Report)

The Issuer Rating reflects Jiangsu Zhongnan Construction Group Co., Ltd.’s (“Zhongnan” or “the company”) improved market position and financial leverage. It also considers Zhongnan’s established track record of property development in the Yangtze River Delta (YRD) region, especially Jiangsu province, growing and sizable scale of contracted sales and revenue, and more controlled land acquisitions. However, Zhongnan’s rating is constrained by its land bank exposure to low-tier cities, moderate interest coverage and the lower margin of its construction segment.

The Stable Outlook reflects our expectation that Zhongnan will maintain its market position in Jiangsu province and continue to grow in terms of sales and revenue in a moderate manner, while employing a prudent expansion and land acquisition approach to manage its financial leverage and liquidity position.