State Grid Corp. of China

Power consumption growth also fell on a year-on-year basis due to China's lockdown in early 2020. National power consumption dropped 7.8% year on year in the first two months of the year, though growth started to rebound as business activities gradually resumed from mid-March. Overall, national power consumption declined 4.7% year on year in the first four months. Our base case assumes national power consumption growth of 2%-3% for 2020, though that would depend on how economic activity recovers. We estimate SGCC's power sales volume will increase 2.5% in 2020 and recover to 4% in 2021. The stable outlook on SGCC reflects our stable outlook on the sovereign credit rating on China. It also reflects our expectation that SGCC's FFO-to-debt

...We expect the economic downturn to weigh on the profitability of State Grid Corp. of China (SGCC). In our view, SGCC's financial performance will be hurt by the outbreak of COVID-19 in 2020. The company estimated its T&D revenue will fall by about Chinese renminbi (RMB) 92.6 billion because of the government's initiative to cut retail tariffs for certain commercial and industrial (C&I) users by 5% over February-December 2020. The policy will lead to a significant drop in grid companies' funds from operations (FFO) for the year as most of the cost will be borne by them this time. In 2018 and 2019, the central government required tariff cuts of 10% for certain C&I users to support the economic recovery, with the costs partially borne by grid operators. SGCC recorded revenue loss of about RMB23 billion in 2019 due to the reduction in retail tariffs. Power consumption growth also fell on a year-on-year basis due to China's lockdown in early 2020. National power consumption dropped 7.8% year...

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