HONG KONG (S&P Global Ratings) Aug. 27, 2019--S&P Global Ratings said today that a reduction in public-private partnership (PPPs) projects is unlikely to materially improve the leverage of China State Construction International Holdings Ltd. (CSCI; BBB/Negative/--) over the next 12-24 months. We believe meaningful improvement will take time since CSCI needs to convert its backlog of cash-based projects into actual cash flow. CSCI is adjusting its strategy to put more weighting on cash flow improvement, rather than revenue growth. The company has been balancing its exposure to PPP investments, which have larger contract sizes and higher profit margins, but much longer accounts receivable turnover than traditional engineering-procurement-and-construction (EPC) projects. PPP projects also require upfront spending for seed capital. During the
