Research Update: Huatai Securities And Huatai International 'BBB/A-2' Ratings Affirmed; Outlook Positive

We believe Huatai Securities could sustainably maintain a risk-adjusted capital (RAC) ratio above 15% for the next one to two years, our threshold for a potential upgrade. Our view reflects the China-based securities firm's adequate first-quarter earnings and controlled exposure to directional equity trading, while maintaining a buffer above our threshold for a very strong capital assessment despite market volatility. We are affirming our 'BBB/A-2' issuer credit ratings on Huatai Securities and HTIF, and the 'BBB' long-term issue rating on the senior unsecured debt guaranteed by Huatai Securities. The positive outlook reflects our view of a one-in-three chance that the trend in Huatai Securities' strengthening capitalization could result in an upgrade over the next two years. On April 30, 2020,

...- We believe Huatai Securities could sustainably maintain a risk-adjusted capital (RAC) ratio above 15% for the next one to two years, our threshold for a potential upgrade. - Our view reflects the China-based securities firm's adequate first-quarter earnings and controlled exposure to directional equity trading, while maintaining a buffer above our threshold for a very strong capital assessment despite market volatility. - We are affirming our '###/A-2' issuer credit ratings on Huatai Securities and HTIF, and the '###' long-term issue rating on the senior unsecured debt guaranteed by Huatai Securities. - The positive outlook reflects our view of a one-in-three chance that the trend in Huatai Securities' strengthening capitalization could result in an upgrade over the next two years....

Research Update