...November 29, 2019 HONG KONG (S&P Global Ratings) Nov. 29, 2019--S&P Global Ratings said today that Sun Hung Kai Properties Ltd.'s (SHKP) winning tender for the largest piece of commercial land ever auctioned in Hong Kong will consume its ample financial buffer. But we believe the tender's impact on the rating (A+/Stable/--) will be limited, given SHKP's substantial war chest. The company achieved record-high contracted sales of over HK$65 billion in the last fiscal year (ended June 2019), and it has strong recurring income of about HK$20 billion annually. The company also plans to partner up with strategic investors, lightening the capital intensity of developing this mega-size project in West Kowloon. In an extreme scenario where SHKP would solely develop this commercial site, its financial headroom would likely disappear and the company would be operating at the edge of its rating buffer. This is because of the record-high cash consideration of HK$42.23 billion, the large development...
