Yanlord

Yanlord / China Property: Moody's has changed its outlook for China's property industry to stable from negative on the expectation that the trend of improved sales and access to funding will continue in 2013. The views are encapsulated in its latest rpt on the Chinese property market titled, "Improving Sales and Access to Funding Support Stable Outlook”. Moody's expects property sales to grow in the single digits in percentage terms over the next 12 months. Says easing mortgage financing for first-time home buyers, increasing devt of mass-market products, solid underlying demand, and continuing urbanization will lead to improved sales, which in turn will lower the inventories of property developers. In addition, Moody's believes that the Chinese govt is unlikely to impose further regulatory restrictions to tighten the property market, because the current restrictions have been effective in controlling speculation and reining in prices. Moreover, a further cut back in investment in the property sector would also weigh on an already slowing economy and make it difficult for the govt to achieve its stated target of GDP growth of 7.5%. Moody's also expects that developers will be able to refinance debt maturities expiring in the next two years, as a variety of funding channels, such as offshore bond financing and asset sales, are now available to them. In addition, only a limited amount of offshore bonds will mature between 2012 and 2014. Yanlord 10.625% bonds seeing bids 4% higher. The stock is +5.8% at $1.455, extending this morning’s gains. Recall our earlier comment that Citi raised TP to $1.90 from $1.56.