Zhongliang Holdings Group Company Limited (Surveillance Report)

The Issuer Rating reflects Zhongliang Holdings Group Company Limited’s (“Zhongliang” or “the company”) established market position and large footprint in the Yangtze River Delta (“YRD”) region. Zhongliang maintains substantial joint ventures (“JV”) participation across its footprint. Zhongliang has exhibited a strong operating efficiency in terms of standardized process and products, sales execution and high cash collection rate via its decentralized projection teams but centralized financial control. Zhongliang’s rating is constrained by its high financial leverage as a result of debt-funded expansion in the prior years.

The Stable Outlook reflects our expectation that Zhongliang would maintain its market position in a prudent manner. Nevertheless, Zhongliang may face challenges to its contracted sales amid tough market conditions, and heightened refinancing and liquidity pressure to manage its maturing financial obligations.