Hero Asia Investment Ltd.

Overview Key strengths Key risks Key overseas subsidiary of China Longyuan Power Group Corp. Ltd. (Longyuan), with high strategic importance in providing offshore financing. Limited operational scale and profit contributions to the group. Parent provides ongoing support in the form of financial backing, and designates the subsidiary for overseas project development. Weak financial ratios on a stand-alone basis. . We rate the company one notch below the final rating on Longyuan (A-/Stable/--) because we assess it as a highly strategic subsidiary of Longyuan. The group has designated Hero Asia as Longyuan's major offshore financing and investment platform. We expect China's central government to extend extraordinary support to Hero Asia via Longyuan in the event of financial difficulty. The ratings on

...The ratings on Hero Asia Investment Ltd. largely depend on the ratings on the parent. We rate the company one notch below the final rating on Longyuan (A-/Stable/--) because we assess it as a highly strategic subsidiary of Longyuan. The group has designated Hero Asia as Longyuan's major offshore financing and investment platform. We expect China's central government to extend extraordinary support to Hero Asia via Longyuan in the event of financial difficulty. The ratings on Hero Asia will therefore move in tandem with those on Longyuan. Hero Asia borrows from offshore banks and bond issues then on-lends to or invests in Longyuan's onshore subsidiaries. As of December 2022, the company co-invested in 6.5 gigawatts (GW) of Longyuan's onshore renewable power projects, mostly through 25% equity stakes. This capacity represented 22% of Longyuan's total capacity. Hero Asia has also extended Chinese renminbi (RMB) 8.6 billion of inter-company loans to its onshore sister companies. Such a diversified...

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