Country Garden’s new CFO aims to halve developer’s funding cost

Country Garden's new chief financial officer Wu Jianbin plans to halve the mainland developer's funding cost in the next two years and begin strategic changes to make it more diversified as it weathers a cooling market.

A HK$3.2 billion rights issue is the first step. The next is to stabilise its performance despite a real estate downturn to get the company's credit rating reevaluated next year to investment grade. Moody's Investors Services has given it a Ba2 rating.

Eventually, the company aims to cut its fundraising cost to 4 per cent to 5 per cent from more than 8 per cent now.

"In the next two to three years, Country Garden will have major changes strategically," Wu told the South China Morning Post.

After joining in April, he scaled down the Guangdong-based developer's aggressive expansion abroad, to account for a 10th of investment from a third before.

The firm was one of seven mainland developers with sales of more than 100 billion yuan (HK$125.9 billion) last year. Contracted sales from January to August was 72.5 billion yuan, including 1.4 billion yuan from Danga Bay in Malaysia and 900 million yuan from Australia.

The mainland's largest developer in terms of sales volume is in talks with the Malaysian government to develop a 15 million square metre site partly by reclaiming land from the sea across from Singapore, Wu said.

It will be operated by a joint venture in which Country Garden will hold 60 per cent, he said, adding that it is waiting for environmental approvals from the Malaysian government and favourable policies in the zone.

The developer currently has three projects in Malaysia and one in Australia and will not rush to expand beyond these two countries any time soon.

Meanwhile, Wu plans to start professional management of Country Garden's non-core assets, including hotels worth 15 billion yuan. It also owns shops in residential projects in 95 mainland cities and some schools.

"We need to activate these assets, using the power of capital," Wu said.

In C-Suite, Wu shares Country Garden’s love for the mainland's small cities