Research Update: Guangdong Energy Group Co. Ltd. Assigned 'A-' Rating With Stable Outlook; Senior Unsecured Notes Rated 'A-'

As one of the key power suppliers to Guangdong province and the sole energy platform held by the Guangdong government, Guangdong Energy Group Co. Ltd. (GEG) has a very high likelihood of receiving extraordinary support from the provincial government. The rating on GEG benefits from the large scale of the company's power fleet in Guangdong, robust local power demand, high benchmark tariffs, and sound leverage. The strengths are partially offset by a concentration in thermal power (particularly coal), volatile profits caused by an ineffective fuel cost pass-through mechanism, and increasing exposure to deregulated power markets. On May 29, 2019, S&P Global Ratings assigned its 'A-' long-term issuer credit rating to GEG, which incorporates a 'bbb-' stand-alone credit profile (SACP) and

...- As one of the key power suppliers to Guangdong province and the sole energy platform held by the Guangdong government, Guangdong Energy Group Co. Ltd. (GEG) has a very high likelihood of receiving extraordinary support from the provincial government. - The rating on GEG benefits from the large scale of the company's power fleet in Guangdong, robust local power demand, high benchmark tariffs, and sound leverage. The strengths are partially offset by a concentration in thermal power (particularly coal), volatile profits caused by an ineffective fuel cost pass-through mechanism, and increasing exposure to deregulated power markets. - On May 29, 2019, S&P Global Ratings assigned its 'A-' long-term issuer credit rating to GEG, which incorporates a '###-' stand-alone credit profile (SACP) and three-notch uplift associated with a very high likelihood of receiving extraordinary support from the Guangdong government. We also assigned our 'A-' long-term issue rating to GEG's guaranteed senior unsecured...

Research Update