Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Credit Rating of Shandong Hejian State-owned Capital Investment Co., Ltd. (“SHSCI” or “the company”) to ‘BBB+’ from ‘BBB’. The Outlook is Stable.
The Issuer Rating upgrade reflects the increased strategic importance of SHSCI in Heze City (“Heze”), as demonstrated in its newly assigned role in urban renewal, construction of related public facilities and rural revitalization, and strengthened role as the major stated-owned asset operation entity in the region with the large amount asset injections from the Heze Municipal People’s Government (“Heze government”) gradually being leased out to external parties or for business cooperations.
We believe there is a high possibility that Heze government would provide strong support to SHSCI if needed, in light of its direct ownership of SHSCI, SHSCI’s strategic position as the major entity that is responsible for land development, infrastructure construction, resettlement housing construction, as well as its important status as the major state-owned asset operation entity in the region, and the strong linkage between the Heze government and SHSCI, including control and supervision over SHSCI’s management, strategic alignment and ongoing operational and financial support. In addition, the Heze government may face significant negative impact on its reputation, business, and financing activities should SHSCI encounter any operational or financial difficulties.
The Stable Outlook reflects our expectation that SHSCI’s strategic importance would remain intact while the Heze government will continue to ensure SHSCI’s stable operation.