Zhongyuan Yuzi Investment Holding Group Co. Ltd. (HNYUZI)

HNYUZI’s current credit strength is relatively strong on a domestic support-expectation basis as an important provincial-level GRE in Henan Province, but weak on a standalone repayment basis. The direction is broadly stable including support, as long as Henan SASAC ownership, the policy mandate, domestic funding access, and support track record are maintained. On a standalone basis, however, the company is fragile given the FY2025 loss, thin operating cash flow, restricted cash, and near-term debt. A major change in the support-inclusive view is not the base case over the short term, but the view could change quickly if deterioration in refinancing access, weaker Henan support signals, guarantee subrogation, weaker long-term receivables recovery, and expanded Palm Eco-Town-related losses were to occur together.

The core monitoring items are not revenue growth. Free cash, restricted cash, one-year debt, unused bank credit lines, domestic bond refinancing, government capital, subsidies and special-purpose funds, long-term receivables recovery, guarantee exposure, Palm Eco-Town losses, and offshore bond documentation are more important. Domestic AAA and provincial-level policy importance support the credit, but before each maturity it is necessary to verify whether cash, refinancing, and support are concretely available.

In the next update, priority should be given to checking FY2026 first-quarter and 1H2026 disclosures, the 2026 surveillance rating, a detailed maturity ladder, the offshore bond OC, bank credit lines, and the ageing and recovery status of long-term receivables. In particular, disclosure of the counterparties, regional and project-level recoveries, impairments, and settlement status for government-purchased services in long-term receivables would materially reduce uncertainty around standalone credit strength.