...High inherent risks in purchase of distressed assets. Outlook The stable outlook over the next 12-24 months reflects our view that Asset Management Co. Ltd. (China Huarong) will retain its very important role and very strong link with the Chinese government. We also expect the company to maintain its financial profile and its market position in the management of nonperforming assets. We could lower the rating if China Huarong's financial profile deteriorates significantly. Overly aggressive expansion that undermines the company's capitalization, such that the projected RAC ratio is below 5%, would indicate such deterioration. We could also lower the rating if negative information leads us to reassess China Huarong's status as a GRE. This includes adverse legislative changes that diminish the company's role or allow increased competition, weakening its business position. We may also review China Huarong's government link if the Ministry of Finance ceases to be a majority shareholder in the...
