Cixi State-Owned Assets Investment Holding Co. Ltd. (CIXISO)

CIXISO’s current credit quality does not show a major immediate deterioration signal on a support-inclusive basis, but its stand-alone financials are weak. The regional base of Cixi and Ningbo, the link with the actual controller, the public-service nature of the company’s businesses, DFRatings’ AA+ / Stable rating, and the track record of parent-guaranteed USD bond issuance are significant supporting factors. In particular, the company’s business scope and reputational importance to Cixi are high, and this report does not place a loss of support under normal conditions at the centre of its base case.

However, the company’s repayment capacity does not arise naturally from operating cash flow. In 2024, operating revenue was RMB3.543 billion, operating costs were RMB4.823 billion, net profit was RMB468 million, and operating cash flow was negative RMB13.499 billion. Relative to total assets of RMB198.585 billion, total liabilities of RMB135.070 billion, and an approximate debt-like liability amount of RMB117.09 billion, earnings and cash generation are thin. Investors therefore need to distinguish support capacity, support willingness, legal claims, and refinancing access, rather than making a one-step judgement that the issuer is safe because it is government-related.

No immediate credit deterioration signal has been identified from the materials obtained. However, this view assumes that Cixi’s fiscal position and land market do not deteriorate rapidly, that refinancing access across banks, the onshore bond market, and the offshore bond market is maintained, and that no large compensation payments arise from external guarantees. The next update should focus on full-year 2025 financials, the 2025 or 2026 rating tracking reports, the handling of USD bond maturities, the balance between short-term borrowings and cash, and recovery of other receivables and inventory.