Chengdu Airport Industry and Finance Investment and Development Co., Ltd. (Surveillance Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Credit Rating of Chengdu Airport Industry and Finance Investment and Development Co., Ltd. (“CAIFID” or “the company”) to ‘A-’ from ‘BBB+’; Issuer Rating Outlook Stable.

The Issuer Credit Rating upgrade reflects the company’s increasing strategic importance in Shuangliu, as the company is deepening its roles in the urban village redevelopment under the guidance of the People’s Government of Shuangliu District, Chengdu City (“Shuangliu government”). The company is well-positioned to enhance its roles in demolition and the subsequent investment and construction of supporting infrastructure and resettlement housing. This initiative aims to improve living conditions for residents while also promoting economic development and urbanization in the area. It is aligned with the development plans of the Shuangliu government and strengthened CAIFID’s role as the major entity responsible for regional development in Shuangliu.

We believe this continues to present a high possibility that the Shuangliu government would provide very strong support to CAIFID if needed, in light of its majority ownership of CAIFID, CAIFID’s strategic position as an important local investment and development company (“LIDC”) that is responsible for infrastructure construction and state-owned asset operation in Shuangliu District (“Shuangliu”), especially in the Chengdu International Airport Business District (“Airport BD”), and the linkage between the Shuangliu government and CAIFID, including appointment and supervision of the senior management, strategic alignment, major investment and financing plan decisions and ongoing operational and financial support. In addition, the Shuangliu government may face negative impact on its reputation and financing activities if CAIFID encounters any operational and financial difficulties.

The Stable Outlook reflects our expectation that CAIFID’s strategic importance would remain intact while the Shuangliu government will continue to ensure CAIFID’s stable operation.