Sunland 1H19 – results in line with expectations

While impacted by a non-cash write-down, the results were broadly in-line with expectations. We reiterate our Underperform recommendation on the 7.55% 2020 notes. Our credit outlook is Negative. While Sunland’s credit profile has improved significantly over the last 12 months, gearing will begin to increase as the next multistory projects are developed. Further the sector is facing headwinds evidenced by a reduction in the volume of property sales.