...July 22, 2024 What's new: We still expect Sinochem Hong Kong's financial leverage to be elevated in the next two years, but higher than our previous forecast. This is mainly because of the weaker contract sales and prolonged high leverage at key subsidiary, China Jinmao Holdings Group Ltd., amid tough property market conditions in China. Key subsidiary performance: Sinochem Hong Kong's stand-alone credit profile (SACP) will continue to be largely driven by that of Jinmao over the next two years. We anticipate Jinmao's debt-to-EBITDA ratio will stay at about 12x in 2024, compared with 13x in 2023, before gradually improving to 9.0x in 2025. Its revenue will gradually decrease and stabilize in 2024 and 2025 following an "L" shape trend in property sales. Its margin will stay low in 2024 and rebound in 2025 when higher-margin projects will kick in. Group status: Sinochem Hong Kong will remain a core subsidiary of Sinochem Holdings Corp. Ltd. The rating is therefore linked to the group credit...
