News summary
Vanke's corporate rating was downgraded to "BB-" by FitchJungleJackpotJamboree, the outlook is negative, sales and liquidity issues have attracted attention.
Newsletter text
Fitch downgrades Vanke's rating, and liquidity pressure appears
On May 24, international credit rating agency Fitch rated Vanke Enterprise (2202JungleJackpotJamboree.HK)JungleJackpotJamboreeIts long-term foreign currency and local currency issuer default rating was downgraded to "BB-" and a negative outlook was given. The move shows that Fitch has expressed a more cautious attitude towards Vanke's financial situation and market performance.
Fitch also announced that it would downgrade the long-term issuer default rating of Vanke Real Estate (Hong Kong), a wholly-owned subsidiary of Vanke, from "BB" to "B+". This further highlights the liquidity challenges Vanke faces in the current real estate market environment.
According to Fitch analysis, the downgrade is mainly due to Vanke's sales performance so far this year failing to reach expected levels, resulting in a decrease in the company's liquidity buffer. The continued decline in sales has adversely affected Vanke's non-bank financing channels.
In the future, companies may rely more on cash, asset disposals and secured bank financing to repay large amounts of debt that are due. Fitch warned that despite the government's increased support for the real estate industry, Vanke and industry sales may still be difficult to stabilize, and its cash flow and asset recovery plans may also face challenges.
