Liangshan Development (Holdings) Group Co., Ltd. (Surveillance Report)

Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Credit Rating of Liangshan Development (Holdings) Group Co., Ltd. (“LDHG” or “the company”) to ‘BBB’ from ‘BBB-’. The Outlook is Stable.

The Issuer Rating upgrade reflects the increased strategic importance of LDHG in the development of Liangshan, as demonstrated by its higher involvement and investment in clean energy, strategic resources, financial institutions and other industry investment in the region. In addition, the equity interest of the company held by the Liangshan Yi Autonomous Prefecture State-owned Assets Supervision and Administration Commission (“SASAC of Liangshan”) increased to 70.99% at end-June 2023 (end-2022: 58.6%). The Sichuan Provincial Department of Finance remained the second largest shareholder owning 9.79% of LDHG at end-June 2023.

We believe there is a high possibility that Sichuan’s Liangshan Yi Autonomous Prefecture Government (“Liangshan government”) would provide strong support to LDHG if needed, in light of the Liangshan government’s majority ownership in LDHG, LDHG’s strategic importance as the sole prefecture-level local investment and development company responsible for state-owned capital operation, investment and financing in Liangshan, and the linkage between the Liangshan government and LDHG, including supervision of the senior management, strategic alignment and ongoing operational and financial support. In addition, the Liangshan government may face significant negative impact on its reputation, business and financing activities should LDHG encounter any operational or financial difficulties.