> **来源：[研报客](https://pc.yanbaoke.cn)** # CMBI Credit Commentary Summary ## Core Content This document provides a credit commentary on **FUTLAN/FTLNHDs**, a Chinese property developer, focusing on its financial performance, credit profile, and future outlook. The analysis highlights the company's resilience in a challenging market, its strong access to funding, and the potential for sustainable growth in its recurring income streams. ## Main Points ### 1. Credit Recommendation - **Maintain Buy**: CMBI recommends maintaining a "Buy" rating for FUTLAN/FTLNHDs due to their strong risk and return profiles. - **Resilience in Challenging Environment**: Seazen has shown resilience, particularly through its recurring rental and property management income, which has grown consistently. ### 2. Operating Performance - **FY25 Results**: While overall FY25 results were negatively impacted by lower ASP and GFA in property developments, recurring income continued to grow. - **Recurring Income Growth**: Recurring income increased by **7%** to **RMB14.1bn**, covering **4.2x** of gross interest expenses. - **Profit Contribution**: Rental and property management income contributed **62.6%** of gross profit in FY25, up **47.6%** from FY24. - **Gross Margin Recovery**: The gross margin of recurring income improved significantly, leading to an overall **23.3%** gross margin in FY25, up from **16.8%** in FY24. ### 3. Funding and Refinancing - **Stable Credit Profile**: Seazen has maintained a stable credit profile and has better access to funding channels compared to its peers. - **Refinancing Activities**: Seazen raised **USD510mn** to refinance **USD600mn** in bonds maturing in July and October 2025. - **New Bond Issue**: In March 2026, Seazen issued **USD355mn** of FTLNHD 11.8 03/09/29 and redeemed **USD234.0mn** in existing bonds. - **Secured Loans**: Seazen obtained **cRMB12.5bn** in secured loans against its IPs in FY25, with potential for **RMB5-6bn** more from unpledged malls. - **Funding Cost Reduction**: Secured loans and bonds against IPs have helped reduce funding costs from **5.88%** in FY24 to **5.81%** in FY25. ### 4. Future Outlook - **Focus on IPs**: Seazen is expected to increasingly focus on its investment properties (IPs), with plans to open **5 new malls** in FY26. - **Recurring Income Target**: It guided a conservative target of a **2.8% YoY increase** in recurring income, reaching **RMB14.5bn** in FY26. - **Market Conditions**: New mall launches will depend on market conditions. ### 5. Financial Position - **FCF**: Free cash flow (FCF) fluctuated between **RMB3,527mn** in 2023 and **RMB5,884mn** in 2025. - **Inventory Days**: Increased from **31.2** in 2023 to **36.7** in 2025, indicating slower inventory turnover. - **Cash Conversion Cycle**: Improved from **20.1** in 2023 to **9.9** in 2025, suggesting better liquidity management. - **Debt Metrics**: - **Debt/EBITDA** increased from **3.5x** in 2023 to **7.6x** in 2025. - **Net Debt/EBITDA** rose from **1.6x** to **3.1x**. - **EBITDA/Interest** dropped from **6.6x** to **2.8x**, indicating higher interest burden. ### 6. Additional Activities - **Commercial REITs**: Seazen has started applying for the public issuance of commercial REITs using its commercial real estate projects, including the **Changzhou Tianning Wuyue Plaza** and **Nantong Qidong Wuyue Plaza** projects. It intends to hold at least **34%** of the REITs. ## Key Information - **Operating Performance**: Recurring income is a key driver of resilience, with a growing contribution to gross profit. - **Funding Access**: Seazen has successfully accessed the USD bond market and has a strong capacity for secured loans. - **Future Growth**: Expansion of investment properties and new mall openings are expected to support recurring income growth. - **Financial Flexibility**: The company has demonstrated adequate financial flexibility to manage its debt maturities over the next 2-3 years. ## Summary Table | Metric | 2023 | 2024 | 2025 | |--------|-----|-----|-----| | FCF (RMB mn) | 3,527 | 2,307 | 5,884 | | Inventory Days | 31.2 | 35.1 | 36.7 | | Cash Conversion Cycle (days) | 20.1 | 23.7 | 9.9 | | Debt/EBITDA | 3.5x | 4.7x | 7.6x | | Net Debt/EBITDA | 1.6x | 2.1x | 3.1x | ## Disclaimer and Legal Information - **Author Certification**: The author certifies that all views reflect their personal opinion and that there are no conflicts of interest. - **Important Disclosures**: - The report is not tailored for all investors. - Past performance is not indicative of future results. - The value of investments may fluctuate. - **Distribution Restrictions**: - **UK**: Only for persons within Article 19(5) or Article 49(2) of the Financial Services and Markets Act 2000. - **US**: Intended for "major US institutional investors" only. - **Singapore**: Distributed by CMBISG, an Exempt Financial Adviser, to specific categories of investors. ## Contact Information - **Glenn Ko, CFA**: (852) 3657 6235 / glennko@cmbi.com.hk - **Cyrena Ng, CPA**: (852) 3900 0801 / cyrenang@cmbi.com.hk - **Yujing Zhang**: (852) 3900 0830 / zhangyujing@cmbi.com.hk - **CMB International Global Markets Limited**: Fixed Income Department, Tel: 852 3657 6235 / 852 3900 0801 / fis@cmbi.com.hk