Summary: China Hongqiao Group Ltd.

Low cost position of aluminum. Sound market position as the world's largest aluminum producer by capacity. Aluminum over-capacity in China and globally. Exposure to cyclical commodity prices. Geographical concentration in China. High debt levels. Cash flow adequacy ratios improving on higher profitability. Risk of higher-than-expected debt-funded capital spending. The stable outlook reflects our view that China Hongqiao Group Ltd.'s (Hongqiao) new on-stream aluminum capacity and low cost position could maintain the company's profitability amid the economic slowdown in China and a subdued commodity pricing cycle over the next 12 months. This offsets the company's higher debt-funded spending on capacity growth. We expect Hongqiao's ratio of funds from operations (FFO) to debt to be above 20% in the next 12 months.

...Outlook: Stable The stable outlook reflects our view that China Hongqiao Group Ltd.'s (Hongqiao) new on-stream aluminum capacity and low cost position could maintain the company's profitability amid the economic slowdown in China and a subdued commodity pricing cycle over the next 12 months. This offsets the company's higher debt-funded spending on capacity growth. We expect Hongqiao's ratio of funds from operations (FFO) to debt to be above 20% in the next 12 months....

Summary