Chengdu Chenghua Development Group Co., Ltd. (Surveillance Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Credit Rating of Chengdu Chenghua Development Group Co., Ltd. (“CCD”) to ‘A-’ from ‘BBB+’; Issuer Rating Outlook is Stable.

The Issuer Credit Rating reflects the increased strategic importance of CCD to Chengdu’s Chenghua District. Since 2021, CCD has consolidated all major local investment and development companies (“LIDC”) in Chenghua District and constantly increased the supervision over its subsidiaries. The company also undertakes most major urban development projects in Chenghua District.

We believe there is a high possibility that the People’s government of Chenghua District (“the Chenghua government”) would provide very strong support to CCD if needed. This mainly considers the Chenghua government’s 90% ownership of CCD, CCD’s strategic position as the flagship platform of Chenghua District, as well as the strong linkage between the Chenghua government and CCD, including management supervision, strategic alignment, and ongoing operational and financial support. In addition, the Chenghua government may face significant negative impact on its reputation and financing activities should CCD encounter any operational or financial difficulties.

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