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S&P Upgrades Aoyuan’s Outlook to “Positive” and Affirms at “B+”

    (22 March 2019 – Hong Kong) China Aoyuan Group Limited (“Aoyuan” or the “Company”, Stock Code: 3883) is pleased to announce that the Company’s rating outlook has been upgraded to “positive” by S&P Global Ratings (“S&P”), a global leader in credit ratings, and its corporate credit rating has been affirmed at “B+”.


    According to S&P, the upgrade reflects S&P’s expectation that Aoyuan will continue to increase its sales scale at a steady pace while controlling its debt growth, and be disciplined in its land acquisitions. S&P expects that the visibility is high on Aoyuan's contracted sales, revenue, and profitability in 2019 and 2020, considering the Company's solid sales execution capability and its deep market knowledge and penetration in the Greater Bay Area (GBA). Aoyuan's contracted sales grew 78% in 2017 and 100% in 2018, with a high attributable ratio of above 80%. It has over RMB110 billion sold but unrecognized revenue with gross margins of 28% to 30%. S&P also expects, given Aoyuan’s strong cash flows and ample cash balance of RMB37 billion as of end-2018, the Company can be more disciplined in its debt growth in 2019-2020.


    Aoyuan management commented, “Aoyuan is pleased to see the outlook upgrade by S&P. Aoyuan has consistently received corporate rating and rating outlook upgrades by all 3 major international rating agencies, namely S&P, Fitch and Moody’s since 2016, reaffirming that its comprehensive strength is well recognized by capital markets. In 2018, Aoyuan continued to achieve breakthrough with outstanding performance in both sales and operating results. It achieved record-high contracted sales of RMB91.3 billion in 2018, increased by 100% yoy, emerging as one of the fastest growing PRC developers. Moreover, Aoyuan’s compound annual growth rate (CAGR) of contracted sales from 2016 to 2018 was 89%. In 2019, Aoyuan opened the Asia USD bond market and subsequently launched the first fully marketed 3-year PRC property high yield issuance since Q4 2018, successfully issued an aggregate of US$1 billion senior notes, further extended its debt maturity profile and optimized its debt structure. Looking forward, Aoyuan will maintain its robust sales growth as well as healthy financial profile, thus bringing fruitful returns to our shareholders and investors.”