The stable outlook on Bao-Trans reflects the outlook on Baoshan. The stable outlook on Baoshan reflects the rating outlook on its parent, China Baowu Steel Group Corp. Ltd. (A-/Stable/--). The stable outlook on Baowu reflects our expectation that the company will maintain its profitability over the next one to two years. Baowu's leading position in China's steel market, strong pricing power, and efficient cost control should ensure a decent profit margin in the next 12-24 months, even if steel prices retreat from current levels. It also reflects our expectation that the company will maintain disciplined capital expenditure without aggressive merger and acquisition plans. We may lower the rating on Baoshan if Baowu's profitability deteriorates such that its debt-to-EBITDA ratio sustains
