China Hongqiao Group Limited (Initial Issuer Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has assigned a ‘BB’ global scale Long-term Issuer Credit Rating to China Hongqiao Group Limited. The Outlook is Positive.

The Issuer Rating reflects China Hongqiao Group Limited (“China Hongqiao” or the “company”)’s leading market position, economy of scale, high operating efficiency and investments in both technologies and overseas alumina production to stay ahead of the curve. However, the rating is constrained by the company’s moderately high financial leverage, lack of pricing power, embedded currency and policy risks.

The Positive Outlook reflects our expectation that China Hongqiao has competitive advantages in terms of investing in the (1) overseas alumina production which is likely to boost its revenue in 2022 or earlier and (2) emission reduction technologies ahead of the implementation of the stricter emission standards in 2021.