Bulletin: Citic Financial AMC's Financial Challenges Remain Despite Profit Rebound - S&P Global Ratings’ Credit Research

Bulletin: Citic Financial AMC's Financial Challenges Remain Despite Profit Rebound

Bulletin: Citic Financial AMC's Financial Challenges Remain Despite Profit Rebound - S&P Global Ratings’ Credit Research
Bulletin: Citic Financial AMC's Financial Challenges Remain Despite Profit Rebound
Published Jan 20, 2025
3 pages (1302 words) — Published Jan 20, 2025
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Abstract:

HONG KONG (S&P Global Ratings) Jan. 21, 2025--China Citic Financial Asset Management Co. Ltd. (Citic Financial AMC) will continue to face financial challenges from tough operating conditions. This is despite a sharp increase in net profit in 2024. S&P Global Ratings expects the financial leverage (ratio of interest-bearing debt to adjusted total equity) of Citic Financial AMC (BBB-/Stable/A-3) to exceed 12.0x over the next 12-24 months. This is our threshold for a weak assessment of capital and earnings. Our projection of the capital base excludes the China-based distressed asset management company's significant equity investments in unconsolidated financial institutions due to potential contagion risk in such investments. Some of the equity transactions generated sizable one-off unrealized gains, which boosted the company's

  
Brief Excerpt:

...January 20, 2025 HONG KONG (S&P Global Ratings) Jan. 21, 2025--China Citic Financial Asset Management Co. Ltd. (Citic Financial AMC) will continue to face financial challenges from tough operating conditions. This is despite a sharp increase in net profit in 2024. S&P Global Ratings expects the financial leverage (ratio of interest-bearing debt to adjusted total equity) of Citic Financial AMC (###-/Stable/A-3) to exceed 12.0x over the next 12-24 months. This is our threshold for a weak assessment of capital and earnings. Our projection of the capital base excludes the China-based distressed asset management company's significant equity investments in unconsolidated financial institutions due to potential contagion risk in such investments. Some of the equity transactions generated sizable one-off unrealized gains, which boosted the company's earnings in the past two years. Citic Financial AMC's earnings capacity will remain constrained by deteriorating profitability prospects for its core...

  
Report Type:

Bulletin

Issuer
China Citic Financial Asset Management Co. Ltd.
GICS
Asset Management & Custody Banks (40203010)
Sector
Global Issuers
Country
China
Region
Emerging Markets
Format:
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Bulletin: Citic Financial AMC's Financial Challenges Remain Despite Profit Rebound" Jan 20, 2025. Alacra Store. May 19, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Citic-Financial-AMC-s-Financial-Challenges-Remain-Despite-Profit-Rebound-3310970>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: Citic Financial AMC's Financial Challenges Remain Despite Profit Rebound Jan 20, 2025. New York, NY: Alacra Store. Retrieved May 19, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Citic-Financial-AMC-s-Financial-Challenges-Remain-Despite-Profit-Rebound-3310970>
  
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