Qingdao Conson Development (Group) Co. Ltd.

The stable outlook on QCD over the next 12-24 months reflects our view that the credit profile of the Qingdao municipal government will continue to benefit from a strong economic base, which will support fiscal revenues. We also expect the government to be able to effectively cut expenditures, which should help stabilize fiscal performance. While we anticipate the debt burden will continue to rise moderately, driven by the commercial expansion of key state-owned enterprises (SOEs), we also expect this to bring greater revenue for future debt repayment. Further, we believe the growing debt burden will be mitigated by the government's sufficient liquidity and strong access to funding from the capital market. We expect QCD to maintain its extremely high likelihood

...The rating on Qingdao Conson Development (Group) Co. Ltd. (QCD) remains underpinned by the resilient credit profile of the Qingdao municipal government. The city's role as a key port in northern China, along with its mature industry and infrastructure development, continues to support Qingdao's economy. In recent years, Qingdao has seen robust growth through the development of maritime services, including maritime logistics, coastal tourism, and marine engineering. In addition, the city's quick containment of COVID-19 supported strong GDP growth of 2.2% during the first three quarters of 2020, well above the national growth rate of 0.7% (see China LRGs In Focus: Qingdao (City Of), Dec. 10, 2020). We continue to see an extremely high likelihood of extraordinary support from the Qingdao government. QCD will remain a crucial infrastructure financing platform for the Qingdao government. The company was recently awarded the mandate to construct and operate the second Jiaozhou Bay cross-sea tunnel....

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