Overview Key strengths Key risks Dominant local government financing vehicle (LGFV) in the economic zone of Yangzhou city in China as the critical platform for primary land development and infrastructure investment. 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, operating 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 the Yangzhou government, despite a restructuring of ownership. Factory rental business model could weigh on cash flow due to high capex and long payback periods. On July 7 and July 11,
