Guanghui's high dependence on short-term borrowings could further weaken its capital structure if the company fails to seek effective enhancement. Improving operating cash flow and a potential capital injection and alliance with Evergrande could strengthen Guanghui's leverage and capital structure. We are placing our 'B' issuer credit rating and 'B-' issue credit rating on the China-based auto distributor on CreditWatch with developing implications. We aim to resolve the CreditWatch placement once the Evergrande alliance is cemented and we better understand the impact on Guanghui's business and financial management strategy. On Sept. 28, 2018, S&P Global Ratings placed its 'B' long-term issuer credit rating on Xinjiang Guanghui Industry Investment (Group) Co. Ltd. (Guanghui) on CreditWatch with developing implications. We also placed
