Moody’s assigns Shum Yip Baa1

Moody’s Investors Service said it gave Shum Yip Group Ltd. a Baa1 issuer rating. The firm’s baseline credit assessment is ba1.

"Shum Yip's Baa1 issuer rating reflects its ba1 BCA and our assessment of a high likelihood of extraordinary support from, and a high level of dependence on, the Shenzhen municipal government and ultimately the Government of China (A1 stable) in times of need, which provides a three-notch uplift to its BCA," said Kaven Tsang, a Moody's senior vice president, in a press release.

Moody’s noted the firm’s land bank will help the company’s property sales and cash flow. Despite tight regulatory control for residential properties in Shenzhen, Shum Yip's annual contracted sales remained steady at RMB 18 billion-RMB 20 billion in 2019-21.

The agency said it sees the company raising debt to fund its considerable investment and to meet its refinancing needs over the next one to two years.

The outlook is stable.

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