Haiyang Haifa Water Group 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 Haiyang Haifa Water Group Co., Ltd. (“HHWG” or “the company”)

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

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