Bulletin: CSCI's Business Transition Will Take Longer To Show Effect

HONG KONG (S&P Global Ratings) March 25, 2021--S&P Global Ratings said today that China State Construction International Holdings Ltd.'s (CSCI; BBB/Negative/--) ongoing business transformation would improve its cash flows and leverage position. However, continual investments into public-private partnership (PPP) projects, despite the lower amounts, would remain the largest constraint in lowering leverage in 2021 and 2022. In our view, CSCI will continue to place a high importance on projects with shorter cash conversion period to improve the company's operating cash flow. CSCI has been focusing on government targeted repurchase (GTR) projects in China since 2019. GTR projects have a considerably shorter cash collection period of two to four years, compared with eight to 10 years for public-private partnership (PPP) projects.

...March 25, 2021 HONG KONG (S&P Global Ratings) March 25, 2021--S&P Global Ratings said today that China State Construction International Holdings Ltd.'s (CSCI; ###/Negative/--) ongoing business transformation would improve its cash flows and leverage position. However, continual investments into public-private partnership (PPP) projects, despite the lower amounts, would remain the largest constraint in lowering leverage in 2021 and 2022. In our view, CSCI will continue to place a high importance on projects with shorter cash conversion period to improve the company's operating cash flow. CSCI has been focusing on government targeted repurchase (GTR) projects in China since 2019. GTR projects have a considerably shorter cash collection period of two to four years, compared with eight to 10 years for public-private partnership (PPP) projects. In 2020, 69% of CSCI's new contracts in mainland China were on GTR and other short-term projects, compared with 44% in 2019. With continual improvement...

Bulletin