...HONG KONG (S&P Global Ratings) April 26, 2017--S&P Global Ratings said today that potential losses from a risky investment have no immediate rating impact on China Huarong Asset Management Co. Ltd. (China Huarong: A-/Negative/A-2; cnAA-/cnA-1) and its Hong Kong-based subsidiary China Huarong International Holdings Ltd. (Huarong International: ###+/Negative/A-2; cnA+/cnA-1). However, the potential losses could add to downward rating pressure. We revised the outlooks on both companies to negative on Dec. 15, 2016 to reflect rapid risk-asset expansion. China Huarong has a sizeable minority stake in Hong Kong-listed property company Fullshare Holdings Ltd., whose shares dropped 12% on April 25 before trading was suspended. In our estimate, the maximum potential loss on the Fullshare investment is equivalent to 4%-5% of China Huarong's total shareholder equity at end-2016. A loss of this magnitude would not immediately affect China Huarong's financial leverage position, given the narrowing but...
