We believe Texhong faces execution risks in its equity investment in a start-up yarn production company in Xinjiang. However, the improvement in Texhong's profit margin and operating cash flows should mitigate the risks, in our opinion. We are affirming our 'BB-' long-term corporate credit rating and 'cnBB+' long-term Greater China regional scale rating on Texhong. We are also affirming our 'BB-' long-term issue rating and 'cnBB+' long-term Greater China regional scale rating on the company's senior unsecured notes. The stable outlook reflects our expectation that Texhong will continue to improve its profit margin and debt leverage over the next 12 months. The outlook also reflects our view that the execution risks from the Xinjiang project may constrain the company's credit
