Nanxun Communications Investment Group Co., Ltd. (Surveillance Report)

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

The Issuer Rating upgrade reflects the increased strategic importance of NCIG in Nanxun District, Huzhou City (“Nanxun”), as demonstrated in its newly assigned role in industrial investment and service projects in the region, which involves the construction and operation of industrial parks. This business aligns with the industrial development goals of the People’s Government of Nanxun District (“Nanxun government”) and underscores NCIG’s significant role in fostering consistent industrial growth in the region. Besides, NCIG undertakes additional commissioned construction projects in the fields of healthcare and education in Nanxun.

We believe there is a high possibility that the Nanxun government would provide strong support to NCIG if needed, in light of its 100% ownership of NCIG, NCIG’s strategic importance as the important state-owned entity for transportation and water conservancy related infrastructure investment, construction and operation in the region, and the linkage between the Nanxun government and NCIG, including control and supervision over the management, strategic alignment and ongoing operational and financial support. In addition, the Nanxun government may face significant negative impact on its reputation, business and financing activities if NCIG encounters any operational and financial difficulties.

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