Moody's Upgrades Jiayuan International’s Corporate Family Ratings to “B3” and S & P Global Rating Gives the Group Long-term Issuer Credit Rating of “B” Publicly for the First Time

Jiayuan International Group Limited (“Jiayuan International” or the “Group”; SEHK stock code: 02768), an established property developer of both large-scale residential and integrated commercial complex projects in China, is pleased to announce that a prestigious international credit rating agency Moody's Investors Service (“Moody’s”) has upgraded the Group’s corporate family rating to “B3” with a stable rating outlook. Meanwhile, S & P Global Rating gives the Group a long-term issuer credit rating of “B” publicly for the first time.

Moody’s says the change to Jiayuan International’s Corporate Family Rating reflects the stabilization of Jiayuan International’s share price and enhancement of the company’s equity following the shareholders’ approval for the injection of assets into the company from its controlling shareholder, founder and chairman, Mr. Shum Tin Ching. The move can also enhance the Group’s ability to manage risks.

Moody’s points out that Jiayuan International’s stabilized share price has reduced the pressure on the key shareholder to provide additional security for his share pledge loans.        In addition, Jiayuan International had obtained shareholder approval for acquiring property projects in Anhui Province from Mr. Shum on 18 July 2019. The acquisition will be settled by an issue of new shares to Mr. Shum, thus raising the latter’s stake in Jiayuan International to 69.4% from 52.9% upon completion of the transaction. Jiayuan International’s share capital will also increase by the same amount. This also increases the net asset value per share.

In addition, Jiayuan International issued US$225 million worth of senior notes due in 2022 twice, respectively in May and July in order to swap short-term debts for long-term debts. Moody’s states that the issue of the senior notes have strengthened the company’s liquidity position and improve its debt structure.

Moody’s also mentions that Jiayuan International achieved year-on-year growth of 19% in contracted sales in the first half of 2019 and expects its total contracted sales to be about RMB25 billion in 2019. Looking ahead, Moody’s expects the company’s recognized revenues to reach around RMB17 billion for 2020 and its gearing ratio to decrease to around 70%. It is because the Group is expected to record strong performance in contracted sales and to have sufficient operating cash flow to repay its maturing debts over the next 18 months. That means Jiayuan International will have adequate liquidity. However, Moody’s expects the Group to take a prudent approach to land acquisition.

S & P Global Rating says that it assigns a long-term issuer credit rating of “B” to Jiayuan International to reflect the expanding scale of Group’s operation in Jiangsu Province. It also states that the issue of senior notes and the swap of short-term debts for long-term debts means that risks associated with the repayment of the Group’s offshore borrowings has been reduced.

Mr. Zhang Yi, Vice Chairman, President and Executive Director of Jiayuan International said, “The Group is pleased that Moody’s upgraded its corporate family rating to “B3” and that S & P Global Rating gives the Group a long-term issuer credit rating of “B” publicly for the first time. The Group will continue to optimize its financial structure. Meanwhile, the acquisition of the property development projects in Anhui province will significantly increase Jiayuan International’s quality land bank and thus drive growth in its financial results in the future. The Group will capitalize on the state policies on national development and continue to expand its geographical market coverage by developing property projects in such key areas as Yangtze River Delta and Guangdong-Hong Kong-Macau Greater Bay Area. It will also acquire quality property projects in the regions which are covered by China’s Belt and Road Initiative so as to maximize the returns to shareholders.”