Bangkok--16 May--Moody's Investors Service Moody's Investors Service says that the devastating earthquake which struck China's Sichuan Province this week is unlikely to immediately impact the ratings of the country's property developers. "Of the 13 Chinese developers rated by Moody's, five show relatively material exposures to the province's affected areas, given their projects in the cities of Chengdu and Chongqing," says Kaven Tsang, an Assistant Vice President/Analyst. The five are China Overseas Land and Investment Limited (COLI), Agile Property Holdings Limited, China Properties Group Limited, Coastal Greenland Limited and Neo-China Land Group (Holdings) Limited. "Although the issuers will probably experience some negative repercussions, including likely delays in developments and sales, it appears at this stage that the impact is not likely to be material enough to warrant changes in their ratings or outlooks," says Tsang. "In addition, material and labour costs could rise as demand increases due to recovery and reconstruction work," says Tsang. "While it is too early to accurately assess the actual impact, such higher costs and delays could compress margins and pressure related operating cash flows." "However, mitigating the concern is the fact that cash flow generated from Chengdu and Chongqing does not constitute a material sum for most of the affected issuers," comments Tsang. For instance, only 10-15% of the projected cash property sales for COLI, Agile, Coastal Greenland and Neo-China would have been from these cities in 2008. "Furthermore, developers with broader geographic coverage -- such as COLI-- will have the operational flexibility to make up the planned sales from other regions," adds Tsang. "Of perhaps some concern is the case of China Properties, which is heavily exposed to Chongqing, which will contribute to material projected cash flow generation in 2008. At the same time its projects are not subject to any damage," says Peter Choy, a VP/Senior Credit Officer. "While the company still plans for pre-sales in 4Q 2008, Moody's is mindful of potential delays," says Choy. "At the same time, China Properties' adequate liquidity position could provide it with buffer to withstand the sales delays." "However, if evidence emerges that delays were likely to be significant or if margins suffered prolonged pressure, rating pressure could emerge for this company in respect of this issue,'' adds Choy. In Moody's view, the ability to achieve sales target across China is a larger rating driver for these companies. In addition, a key rating focus in the near term is whether each company maintains financial discipline. Hong Kong Kaven Tsang Asst Vice President - Analyst Corporate Finance Group Moody's Asia Pacific Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (852) 3551-3077 Hong Kong Peter Choy VP - Senior Credit Officer Corporate Finance Group Moody's Asia Pacific Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (852) 3551-3077