Bulletin: Parent's Lacklustre Performance Could Trim Sinochem HK's Rating Buffer

HONG KONG (S&P Global Ratings) Sept. 3, 2019--S&P Global Ratings said today that the rating buffer for Sinochem Hong Kong (Group) Co. Ltd. (Sinochem HK; A-/Stable/--) is likely to reduce if its parent's lackluster performance in the first half of 2019 persist. We view Sinochem HK to be a core subsidiary of Sinochem Group, and Sinochem HK's creditworthiness is predominantly driven by that of the parent. Revenue growth at Sinochem Group's real estate segment could fall short of our full-year forecast if revenue recognition does not pick up significantly in the second half of 2019. Gross profit of China Jinmao Holdings Group Ltd. (Jinmao), Sinochem Group's real estate business arm, fell 37% year-on-year in the first half of the year.

...September 3, 2019 HONG KONG (S&P Global Ratings) Sept. 3, 2019--S&P Global Ratings said today that the rating buffer for Sinochem Hong Kong (Group) Co. Ltd. (Sinochem HK; A-/Stable/--) is likely to reduce if its parent's lackluster performance in the first half of 2019 persist. We view Sinochem HK to be a core subsidiary of Sinochem Group, and Sinochem HK's creditworthiness is predominantly driven by that of the parent. Revenue growth at Sinochem Group's real estate segment could fall short of our full-year forecast if revenue recognition does not pick up significantly in the second half of 2019. Gross profit of China Jinmao Holdings Group Ltd. (Jinmao), Sinochem Group's real estate business arm, fell 37% year-on-year in the first half of the year. We attribute the decline to Jinmao's declining attributable ratio for sales in joint-venture projects and weak topline growth momentum. Jinmao's contribution to Sinochem Group's EBITDA rose to about one-third in 2018. A slump in Jinmao's performance...

Bulletin