|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||25.42 - 25.42|
|52 Week Range||23.16 - 26.05|
|Beta (5Y Monthly)||0.99|
|PE Ratio (TTM)||3.22|
|Forward Dividend & Yield||3.79 (14.91%)|
|Ex-Dividend Date||May 28, 2021|
|1y Target Est||N/A|
R&F; Properties has raised US$1.1 billion by selling a majority stake in its huge urban logistics park in the Greater Bay Area in a sign that heavily indebted mainland Chinese developers are gearing up to offload assets.The sale of a 70 per cent stake in Guangzhou International Airport R&F; Integrated Logistics Park to Blackstone Real Estate has been completed, according to a statement from Blackstone on Wednesday. The mainland developer still holds the remaining 30 per cent.Savills predicted that debt reduction would be one of the major trends in the Chinese property market in 2021.Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China."The renewed focus on debt levels, especially in the real estate market, means challenges for developers, encouraging them to proactively offload noncore assets," said the global property adviser in its latest report.Cushman & Wakefield believes the recent introduction of tough new government rules designed to limit the borrowing capacity of developers already laden with debt will force many to raise capital by selling assets."Under the strict 'three red lines' finance regulations, real estate firms determined as falling into the orange and red tiers are more likely to seek to dispose of assets, and we can expect to see more quality projects in core locations to enter the market through auction and so forth," said Alvin Yip, head of capital Markets in China at the property services giant.Chinese financial regulators have drawn three so-called red lines under developers' borrowings, capping their debt-to-asset ratio at 70 per cent, their net debt-to-equity ratio at 100 per cent and barring short-term borrowings from exceeding their cash reserves.R&F;, ranked 21st among Chinese developers by home sales, is categorised as red currently, meaning it is in breach of all three thresholds set out in the new regulations.It had a liability-to-asset ratio of 78.2 per cent, excluding advanced proceeds, and a net debt-to-equity ratio of 179.7 per cent, according to the latest data from Wind Information. Its cash-to-short term debt ratio stood at 0.46, and its total debts came to 187.7 billion yuan (US$29 billion).Two weeks ago, R&F; Properties pledged its stakes in three companies controlling US$10 billion in combined assets to a unit under the Guangzhou city authorities to meet government limits on debt exposure.R&F; said earlier that the sale of the logistics park was aimed at "optimising the allocation of resources, focusing on the development of [its] core business, increasing capital reserve and reducing [its] gearing ratio".Some developers have been trying to shed debt through aggressive property sales.China Evergrande, the most indebted company in China with accumulated loans of 835.5 billion yuan, slashed prices by 30 per cent in all of its projects nationwide for a month in September to shore up cash flow. Its property sales grew by a robust 20.3 per cent year on year to 723.25 billion yuan in 2020, according to a filing with the Hong Kong stock exchange.R&F;'s logistics park, located in Huadong County in the Huadu District of Guangzhou, has a planned total construction area of more than 1.2 million square metres.Some 889,820 square metres of rentable area comprising warehouses, plants and cold storage are currently completed. There are also supporting facilities, and an undeveloped land area for warehouses of about 140,000 sq m.Blackstone said the transaction expands its China logistics portfolio by about a third to 53 million square feet across 23 Chinese cities.Cliff Chen, a Blackstone managing director based in Shanghai, said: "We look forward to further developing the park by constructing additional cold storage facilities tailored for food and pharmaceutical industries as well as institutional-quality warehouses."This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
Shares of Guangzhou R&F; Properties tumbled by more than 3 per cent after a report that the developer had pledged its stakes in three companies with US$10 billion in combined assets to a unit under the Guangzhou city authorities to meet government limits on debt exposure.The pledges to Guangzhou City Construction Investment Group comprise a 25 per cent stake in Sheungjin Real Estate Development, which owns the six-year-old office project Yingkai Square in Tianhe district; 50 per cent of Guangzhou Fujing Jishan Real Estate Development with a 20.6 billion yuan (US$3.18 billion) project at Jishan Village in Tianhe, and 100 per cent of Tianli Construction, according to a report on the property website Fang.com, which did not divulge the source of its information.The exercise underscores the extent that China's developers - among the world's most leveraged, for using debt and loans to finance their massive projects - are being pushed to clean up their books under the government's campaign to rein in debt, over concerns that defaults and bad debt in the industry could spill over into system risk for banks. Chinese financial regulators have drawn three so-called red lines under developers' borrowings, capping their debt-to-asset ratio at 70 per cent, their net debt-to-equity ratio at 100 per cent and barred short-term borrowings from exceeding their cash reserves.Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China."Local governments may have the incentive to provide indirect support to large developers that are important to the local economy, by coordinating with banks and, involving other private-sector participants" to give them some financial breathing space, said Fitch Ratings' senior director of Asia-Pacific Corporates Adrian Cheng, in a written reply to South China Morning Post.Artist impression of the developer Guangzhou R&F; Properties' high-end residential project R&F; Prosperous Residence in Phnom Penh, Cambodia. alt=Artist impression of the developer Guangzhou R&F; Properties' high-end residential project R&F; Prosperous Residence in Phnom Penh, Cambodia.R&F; Properties, chaired by Li Sze Lim, had already breached the Chinese central bank's threshold for indebtedness, dubbed the "three red lines."Its debt-to-total equity ratio was 176.7 per cent as of June 30, according to its 2020 interim report. It has accumulated total debt of 224 billion yuan as at June 30, of which 89 billion yuan was due for repayment in less than one year."We estimate only 6.3 per cent of rated Chinese developers can comply with the three red lines measuring an issuer's fitness to borrow, constraining debt growth," said Esther Liu, director at S&P; Global Ratings, adding that the measures to cool China's residential property market should result in a 5 per cent drop in home prices in 2021, with sales likely flat on increased volumes.R&F;'s shares fell by as much as 3.8 per cent in Hong Kong to an intraday low of HK$9.59 on Monday. The company did not immediately respond to requests for comment by the Post."They will need to speed up property sales to support their funding needs, and in some cases may reduce selling prices to support sales growth," said Franco Leung, associate managing director of Moody's Corporate Finance Group, adding that highly geared developers will be restricted from using debt to fund their business growth in 2021. "Financially healthy developers, usually with better liquidity and low leverage, would have more flexibility to raise debt to fund growth, and could therefore acquire market share from weaker peers."This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of R&F Properties (HK) Company Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.