Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Rating of Shandong Yimeng Industrial Group Co., Ltd. (“SYIG” or “the company”) to ‘BBB+’ from ‘BBB’; Issuer Rating Outlook Stable
The Issuer Credit Rating upgrade reflects the strengthened role of SYIG, in view of its increasing contribution in the industrial park investment and operation, as well as the increasing strategic importance of its land consolidation business. SYIG’s increasing involvement in the industrial park investment and operation is demonstrated by its leasing income growth and the expected significant investment in the area. On the other hand, SYIG’s land consolidation business enables Yihe New District (“Yihe ND”) to be a major district of industrial land supply in Linyi City. It is aligned with the local government’s development plans of revitalizing idle land, which helps to attract investment and facilitate industrial investment and development.
We believe this presents a high possibility that the People’s Government of Linyi City (“Linyi government”) would provide strong support to SYIG if needed, in light of its full ownership of SYIG through the Management Committee of Yihe New District (“Yihe ND MC”), the de facto local government of Yihe ND, SYIG’s strategic importance as the important local investment and development company (“LIDC”) that is responsible for infrastructure construction, state-owned asset operation and industry development and investment in Yihe ND, and the linkage between the Yihe ND MC and SYIG, including supervision over the company through its shareholders, strategic alignment and ongoing operational and financial support. In addition, the Linyi government may face significant negative impact on its reputation, business and financing activities if SYIG encounters any operational and financial difficulties.
Linyi City is located in the southeast of Shandong Province. It is the largest and most populous prefecture-level city in Shandong Province. Linyi’s GDP grew by 5.7% in 2024 and realized budgetary revenue of RMB46.9 billion in 2024, representing a year-over-year growth rate of 5.1%.
The Stable Outlook reflects our expectation that SYIG strategic importance would remain intact while the Linyi government will continue to ensure SYIG’s stable operation.