Yangzhou Economic and Technological Development Zone Development (Group) Co. Ltd.

Overview Key strengths Key risks Dominant local government financing vehicle (LGFV) in the economic zone of Yangzhou city in China. Very high financial leverage due to high capital expenditure (capex) and on-lending or guarantees to other local state-owned enterprises (SOEs). Strong track record of ongoing government support, in the form of capital injection, financial subsidy, and interest subsidy. Weak operating cash flow because of weak profitability from government-mandated infrastructure projects. Extremely high likelihood of receiving extraordinary support from Yangzhou government, given its role as the sole platform for primary land development and infrastructure investment within the economic zone. Factory rental business model could weigh on cash flow due to high capex and long payback periods. . Yangzhou Economic and Technology

... Zone Development (Group) Co. Ltd. (YETDZ Dev. Group) has an extremely high likelihood of receiving extraordinary support from the Yangzhou municipal government. Yangzhou Economic and Technology Development Zone is the only national-level development zone in Yangzhou city. YETDZ Dev. Group is the dominant platform for infrastructure investment and the sole platform for primary land development in the development zone. The municipal government fully controls the company and plays a decisive role in its business direction, operational oversight, and key financing decisions through the development zone's administrative committee. A large undeveloped area within the zone underpins YETDZ Dev. Group's continued essential role in infrastructure and primary land development. The company's pipeline of investment remains strong, with a near-term focus on primary land development and factory buildings for lease to corporates. We forecast its annual development...

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