Research Update: Yanfeng Global Automotive Interior Systems Outlook Revised To Negative On Challenging Conditions; 'BBB-' Rating Affirmed

The profitability and cash flow of China-based auto supplier Yanfeng Global Automotive Interior Systems Co. Ltd. (YFAI) and its parent Huayu Automotive Systems Co. Ltd. (HASCO) will bear the brunt of a slowing economy and weakening auto demand amid the COVID-19 outbreak. We expect the EBITDA margins for HASCO and YFAI to dip by 1.5-3 percentage points, before a potential recovery in 2021. On April 8, 2020, S&P Global Ratings revised its rating outlook on YFAI to negative from stable. At the same time, we affirmed our 'BBB-' long-term issuer credit rating on YFAI. The negative outlook reflects our view that the operations and financial performances of YFAI and its parent are under considerable downward pressure, given the challenging industry

...- The profitability and cash flow of China-based auto supplier Yanfeng Global Automotive Interior Systems Co. Ltd. (YFAI) and its parent Huayu Automotive Systems Co. Ltd. (HASCO) will bear the brunt of a slowing economy and weakening auto demand amid the COVID-19 outbreak. - We expect the EBITDA margins for HASCO and YFAI to dip by 1.5-3 percentage points, before a potential recovery in 2021. - On April 8, 2020, S&P Global Ratings revised its rating outlook on YFAI to negative from stable. At the same time, we affirmed our '###-' long-term issuer credit rating on YFAI. - The negative outlook reflects our view that the operations and financial performances of YFAI and its parent are under considerable downward pressure, given the challenging industry conditions for the next 12 months. A path to recovery is highly uncertain, depending on the evolution of the pandemic globally....

Research Update