Danjiangkou Jiaotou Yuantu Materials Co. Ltd.(Initial Issuer Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has assigned ‘BBB-’ global scale Long-term Issuer Credit Rating with Stable Outlook to Danjiangkou Jiaotou Yuantu Materials Co. Ltd. (“DJYM” or “the company”)

The Issuer Credit Rating reflects a high possibility that the People’s Government of Danjiangkou City, Shiyan City (“Danjiangkou government”) would provide strong support to DJYM if needed, in light of its full ownership of DJYM, DJYM’s strategic importance as the key local investment and development company (“LIDC”) that is responsible for state-owned asset management and engineering construction in Danjiangkou City, Shiyan City (“Danjiangkou”), and the linkage between the Danjiangkou government and DJYM, 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 Danjiangkou government may face significant negative impact on its reputation and financing activities if DJYM encounters any operational and financial difficulties.

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