Greenland Hong Kong Holdings Limited: Update following rating downgrade to B2; rating under review for further downgrade

Greenland Hong Kong Holdings Limited: Update following downgrade to Caa2, outlook remains negative - Credit Opinion – 2023/08/04 – US$ 250.00 – ...We downgraded Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) corporate family rating (CFR) Caa2. The downgrade reflects the company's weak liquidity and increased contagion risks to its parent, Greenland Holding Group Company Limited (Ca negative), given the parent's deteriorated credit condition and the two entities' close links and shared brand name. The Caa2 CFR also reflects the company's quality land bank, against its modest operating scale and weakening financial metrics. We expect Greenland Hong Kong's debt leverage, measured as adjusted debt/EBITDA, to rise to 8.1x over the next 12-18 months from 4.8x in 2022. In addition, its EBIT/interest will decline to 2.1x from 3.4x over the same period (see Exhibit 1). This primarily reflects Greenland Hong Kong's declining sales and profitability amid tough market conditions....

Greenland Hong Kong Holdings Limited: Update to credit analysis - Credit Opinion – 2023/02/14 – US$ 250.00 – ...Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) B3 corporate family rating (CFR) reflects the company's exposure to high contagion risk arising from the liquidity stress faced by its parent, Greenland Holding Group Company Limited (Caa2 negative), and associated constraints, given the two entities' close links and sharing of brand name. The B3 CFR also reflects the company's well-located land bank, against its modest operating scale and weakening credit metrics because of lower sales. We expect Greenland Hong Kong's debt leverage, measured as adjusted debt/EBITDA, to rise to 5.5x over the next 12-18 months from 3.8x in last 12 months ending June 2022. In addition, its EBIT/interest will decline to 2.6x from 4.1x over the same period (Exhibit 1). This primarily reflects Greenland Hong Kong's declining sales and profitability amid tough market conditions....

Greenland Hong Kong Holdings Limited: Update to credit analysis - Credit Opinion – 2022/06/17 – US$ 250.00 – ...Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) B3 corporate family rating (CFR) reflects the company's exposure to high contagion risk arising from the increased liquidity stress faced by its parent, Greenland Holding Group Company Limited (Caa2 negative), and associated constraints, given the two entities' close links and sharing of brand name. The B3 CFR also considers the company's well-located land bank and adequate liquidity, against its volatile sales performance, modest operating scale, and execution risks arising from difficult business conditions. We expect Greenland Hong Kong's debt leverage, measured as revenue/adjusted debt, to moderate to 140%-150% over the next 12-18 months from 160% in 2021. Meanwhile, its EBIT/interest will decline to 4.5x-4.6x from 5.6x over the same period (Exhibit 1). This primarily reflects Greenland Hong Kong's declining sales and profitability amid tough operating and funding conditions....

Greenland Hong Kong Holdings Limited: Delay in release of 2021 audited financial results is credit negative - Issuer Comment – 2022/03/28 – US$ 200.00 – ...On 24 March, Greenland Hong Kong Holdings Limited (B1 negative) announced that it will delay publication of its 2021 audited financial results. Instead, the company will publish its 2021 unaudited annual results on 29 March. The delay in release of Greenland Hong Kong's 2021 audited financial results is credit negative but will have no immediate impact on its credit profile. While concerns about Greenland Hong Kong's corporate transparency and information disclosure could weaken the company's funding access, its adequate liquidity would mitigate the concern. We expect Greenland Hong Kong's cash and other cash equivalent resources, together with its operating cash flow, to be sufficient to cover its payment obligations over the next 12-18 months, particularly an $150 million offshore bond maturing in June 2022, despite an expected weakening in operating cash flow due to weaker sales growth. Greenland Hong Kong's liquidity is also supported by the state-owned background of its parent Greenland...

Greenland Hong Kong Holdings Limited: Update following rating downgrade to B1 - Credit Opinion – 2021/12/21 – US$ 250.00 – ...On 16 December, we downgraded Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) corporate family rating (CFR) to B1 from Ba3. At the same time, we changed the rating outlook to negative from rating under review. Greenland Hong Kong's B1 CFR reflects its well-located land banks, adequate liquidity and stable access to certain onshore bank funding. However, the rating is constrained by Greenland Hong Kong's volatile sales performance given its moderate operating scale and execution risks amid difficult business conditions. We expect Greenland Hong Kong's debt leverage, measured as revenue/adjusted debt, to fall to 90%-100% over the next one to two years from 141% for the 12 months ended June 2021 on weak contracted sales. Meanwhile, its EBIT/interest will decline to 2.5x-3.0x from 4.7x over the same period (see Exhibit 1). Nevertheless, these projected metrics position the company's CFR well at the B1 level....

Greenland Hong Kong Holdings Limited: Update to credit analysis - Credit Opinion – 2021/10/22 – US$ 250.00 – ...On 18 October, we downgraded Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) corporate family rating (CFR) to Ba3 from Ba2. At the same time, we have placed the rating under review for further downgrade. Greenland Hong Kong's Ba3 CFR, which is on review for downgrade, reflects its standalone credit profile and a one-notch rating uplift based on our assessment of the likely strong financial support from its parent, Greenland Holding Group Company Limited (Greenland Holding, Ba2 on review for downgrade), if necessary. Greenland Hong Kong's standalone credit profile reflects its well-located land banks and good liquidity. It also takes into consideration its modest operating scale, expected weakening in credit metrics and the execution risks associated with its fast growth plan....

Greenland Hong Kong Holdings Limited: Update to credit analysis - Credit Opinion – 2021/10/06 – US$ 250.00 – ...Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) Ba2 corporate family rating (CFR) reflects its standalone credit profile and a one-notch rating uplift based on our assessment of the likely strong financial support from its parent, Greenland Holding Group Company Limited (Greenland Holding, Ba1 stable), if necessary. Greenland Hong Kong's standalone credit profile reflects its sound credit metrics, well- located land banks, and good liquidity and access to bank funding, given its status as a key subsidiary of Greenland Holding. Its standalone credit profile also takes into consideration its modest operating scale and the execution risks associated with its fast growth plan....

Greenland Hong Kong Holdings Limited: Update to credit analysis: Solid credit metrics on growing scale - Credit Opinion – 2021/04/29 – US$ 250.00 – ...Greenland Hong Kong Holdings Limited's (Greenland Hong Kong) Ba2 corporate family rating (CFR) reflects its standalone credit profile and a one-notch rating uplift based on our assessment of the expected strong financial support from its parent, Greenland Holding Group Company Limited (Greenland Holding, Ba1 stable), if necessary. Greenland Hong Kong's standalone credit profile reflects its solid credit metrics, well-located land banks, and good liquidity and access to funding, given its status as a key subsidiary of Greenland Holding. Its standalone credit profile also takes into consideration its moderate operating scale and the execution risks associated with its fast growth. We expect its credit metrics to remain solid over the next 12-18 months, mainly because revenue growth will outpace debt growth after the acquisition of Guangzhou Greenland Real Estate Development Co. Ltd. (Guangzhou Greenland) in December 2020. These ratios will appropriately position the company at the current...