Issuer Summary: Zhengzhou Metro Group / Zhengzhou Transportation Development Investment Group

Report date: 2026-05-22
Ticker: ZZMTRG
Issuer in focus: Zhengzhou Transportation Development Investment Group Co., Ltd.
Former name: Zhengzhou Metro Group Co., Ltd.
Chinese legal name: 郑州交通发展投资集团有限公司
Former Chinese legal name: 郑州地铁集团有限公司
Credit reference entity: Zhengzhou Transportation Development Investment Group Co., Ltd., formerly Zhengzhou Metro Group Co., Ltd.
Relevant structure: domestic green MTNs confirmed in company annual reports / CCXI materials; offshore USD notes are publicly reported as linked to the issuer, but the offering circular, issuer / guarantor structure and trust deed terms were not independently reviewed.

1. Business Snapshot and Recent Developments

Zhengzhou Transportation Development Investment Group Co., Ltd. (hereafter Zhengzhou Transportation Development Group, formerly Zhengzhou Metro Group) is a local government-related infrastructure issuer responsible for investing in, constructing and operating urban rail transit in Zhengzhou. The starting point for credit analysis is to view the company not simply as a metro operator, but as an urban rail GRE that jointly performs Zhengzhou’s public transport policy, urban development, transport infrastructure investment and transit-oriented resource development functions. This is not a company that can independently recover construction investment, operating costs and interest payments from fare revenue alone. Its credit profile is built on a combination of capital injections from the Zhengzhou municipal government, operating subsidies, earmarked public transport infrastructure funds, bank borrowings, domestic bonds, USD bonds, and development along rail lines and around stations.

The former legal name was Zhengzhou Metro Group Co., Ltd., and the company was inaugurated under the name Zhengzhou Transportation Development Investment Group Co., Ltd. on 29 December 2024. A Zhengzhou municipal government article dated 30 December 2024 described the name change as part of state-owned enterprise reform, with the metro group as the core entity, to consolidate resources in the broader transport industry and promote the integration of public transport-related enterprises. The company’s official website also states that its predecessor was Zhengzhou Metro Group, that it was established on 22 February 2008, restructured into a group on 11 September 2018, and renamed to its current legal name on 29 December 2024. Accordingly, this report uses zhengzhou_metro_group as the issuer folder name in line with the market ticker and existing instructions, but the credit reference entity is the current legal entity, Zhengzhou Transportation Development Group.

According to the company’s official website, its main tasks are public transport construction and operation and comprehensive land development. It has registered capital of RMB2.779 billion, total assets of more than RMB267.1 billion, and over 14,292 employees. In CCXI’s 2025 credit rating report, which covers the period to end-June 2025, the company’s registered capital and paid-in capital are both RMB2.779 billion. Zhengzhou Development Investment Group Co., Ltd., Zhengzhou Investment Review and Budget Performance Evaluation Center, and China Development Fund Co., Ltd. hold 67.77%, 23.25% and 8.98%, respectively. Zhengzhou Development Investment Group and Zhengzhou Finance Bureau are identified as the controlling shareholder and actual controller, respectively. This indicates a strong government linkage, but this is a separate issue from a legal government guarantee on any specific bond.

The main recent operating changes are network expansion and the change in legal name. The company’s official website states that the company has completed the construction tasks under the three-phase construction plan approved by the National Development and Reform Commission, the suburban railway approved by the Henan Provincial Development and Reform Commission, and the Zhengzhou–Xuchang intercity railway. It operates 13 lines, 286 stations and 450 km of track. The lines are Line 1, Line 2, Line 3, Line 4, Line 5, Phase I of Line 6, Phase I of Line 7, Phase I of Line 8, the Suburban Line, Phase I of Line 10, Phase I of Line 12, Phase I of Line 14, and the Zhengzhou–Xuchang intercity railway. Line 3 is operated by the associate Zhengzhou CCCC Shenzhen Railway Rail Transit Co., Ltd., while the Zhengzhou–Xuchang intercity railway is operated by the controlled subsidiary Henan Zhengxu Rail Transit Co., Ltd. At end-December 2024, the northeastern section of Phase I of Line 6, Phase I of Line 7 and Phase I of Line 8 were opened in succession, bringing Zhengzhou’s urban rail system closer to a network-style system of a “star-shaped plus ring” configuration.

On the demand side, ridership has recovered and expanded. A Zhengzhou municipal government article dated 21 January 2025 reported that Zhengzhou Metro’s total passenger volume reached 710 million trips in 2024, the network operating mileage was 450 km, the system ranked tenth nationally among metro systems, and the train punctuality rate was 99.98%. CCXI’s 2025 report also states that the company’s passenger traffic was 709 million trips in 2024 and fare revenue was RMB1.004 billion, up 21.61% and 14.12%, respectively, from 2023. In 1H2025, passenger traffic was 415 million trips and fare revenue was RMB568 million, indicating strong demand.

However, demand recovery is not the same as an improvement in operating profitability. CCXI notes that the metro business has a strong public-service nature and a low degree of market-based fare setting, and that metro operations have remained loss-making since 2024. The gross margin of the fare services segment was negative 337.22% in 2024 and negative 336.39% in 1H2025. Fare revenue is a basis for public-service relevance and policy importance, but is not, by itself, an adequate repayment source. Operating subsidies of RMB7.128 billion in 2024 and RMB4.057 billion in 1H2025 were confirmed and supported profits materially through other income. Recognition of these subsidies is itself a credit support, but the fact that they mainly accumulate in other receivables is a reason to monitor the timing of cash receipt.

Zhengzhou’s urban transport plan also preserves the company’s substantial role. The Zhengzhou Urban Rail Transit Network Plan (2021–2035), reported by the Henan provincial government portal on 19 December 2024, sets out a long-term network of around 1,260 km and 22 lines by 2035, and a visionary network of around 1,600 km and 30 lines by 2050. CCXI indicates that, as of end-June 2025, the planned total investment in proposed rail transit projects, namely Line T1, Line T3 and the Dengfeng–Olympic Sports Center section of Line S2, totalled RMB25.350 billion. The main lines under the three-phase plan have been completed, but subsequent construction, the investment and financing model, and capital expenditure pressure remain credit issues.

Note: Company profile and network information are based on the company’s official website. 2024 ridership is based on a Zhengzhou municipal government article and CCXI. Ratings are based on CCXI’s 2025 credit rating report and Fitch-related articles. Fitch is treated as a secondary source because the primary release was not confirmed.

2. Industry Position and Franchise Strength

Zhengzhou Transportation Development Group’s franchise is supported not by brand strength won in a competitive market, but by institutional monopoly, indispensability as urban transport infrastructure, and close ties with the Zhengzhou municipal government. CCXI identifies the company as the only urban rail construction and operating company approved by the Zhengzhou municipal government, and as having a monopolistic position in Zhengzhou’s rail transit industry. The company’s official website shows a 450 km network, 13 lines and 286 stations, indicating that the company is deeply embedded in public transport, urban development, commuting, commerce and metropolitan-area connectivity in Zhengzhou, the capital of Henan Province.

This indispensability is a strong support for bondholders. If an urban rail construction and operating entity were to face a liquidity squeeze, this would not merely be a single-company issue. It could affect transport infrastructure under construction and planning, public services, urban development, and the refinancing environment for government-related issuers in Zhengzhou. Indeed, in the comparison of municipal platforms, the company has a large asset base of RMB260.249 billion and a clearly defined function as Zhengzhou’s only urban rail construction and operating company. Within Zhengzhou, its role differs from other platforms responsible for roads and bridges, public housing, municipal utilities, land development and transport infrastructure, making it difficult for the government to substitute.

The supporting regional base is also sizeable. According to Zhengzhou Statistics Bureau’s 2024 statistical communiqué and public data cited by CCXI, Zhengzhou’s GDP was RMB1,453.210 billion in 2024, with real growth of 5.7%. Its permanent resident population was 13.086 million at end-2024, and the urbanisation rate was 81%. Zhengzhou ranks first within Henan Province on economic and fiscal indicators. In CCXI’s comparison, general public budget revenue was RMB115.504 billion in 2024, and the local government debt balance was RMB393.882 billion. Its population, industry, transport hub role and position as a national central city provide the external environment supporting the company’s public transport investment.

Note: 2022-2024 figures are public data cited in CCXI’s 2025 credit rating report. 2024 GDP and other figures also refer to Zhengzhou Statistics Bureau’s 2024 statistical communiqué. 1H2025 figures are those stated by CCXI; full-year fiscal figures and government debt balance were not confirmed.

The strength of the regional base is subject to constraints. CCXI states that Zhengzhou’s general public budget revenue remained above RMB110 billion from 2022 to 2024, but tax revenue in 2024 was RMB77.539 billion, down 1.4% year on year, while government fund revenue was RMB34.772 billion, down 10.3% year on year. Weakness in the land and property market can spill over into the local government’s comprehensive financial resources, land-related revenue, cash recycling from development along rail lines, and development and sales by the rail property subsidiary. Government support capacity is strong, but it is not unconstrained.

The fare regime both supports the company’s franchise and constrains its profitability. According to CCXI, Zhengzhou Metro fares are determined by government-related authorities and go through public hearings, meaning the degree of market-based pricing is low. As of end-June 2025, the fare system used segmented pricing: RMB2 for the first 6 km, RMB3 for 6-13 km, RMB4 for 13-21 km, and an additional RMB1 for every 9 km beyond 21 km. This improves public accessibility as mass transit, but it is not a system that mechanically recovers capital investment, labour costs, power costs, maintenance costs, depreciation and interest expense.

Therefore, the company’s industry position should be read not as “monopoly therefore strong stand-alone profitability”, but as “monopoly therefore strong government support incentives”. Increases in fare revenue, network expansion and passenger traffic strengthen policy importance, but they also raise operating costs, maintenance costs, depreciation and required subsidies. As an urban rail GRE, the company’s credit strength depends less on demand itself than on the extent to which the government and financial markets continue to support the public-service nature underpinning that demand.

3. Segment Assessment

The credit roles of the company’s businesses become clearer when viewed by segment: fare services, property development, resource development, design services, entrusted operations and other businesses. Fare services are the source of the public-service role and demand base, and they are the core justification for government support. However, profitability is weak and this segment is unlikely to be a stand-alone repayment source. Property development and resource development are mechanisms that supplement metro investment through development around stations and along rail lines. Design, entrusted operations and other businesses monetise adjacent functions, but are supplementary relative to the company’s total debt scale.

Operating revenue was RMB1.822 billion in 2024, up from RMB1.635 billion in 2023. The increase was mainly attributable to growth in fare revenue and the expansion of property development revenue to RMB523 million. However, the company’s overall gross margin was negative 177.98%, and remained negative 260.07% in 1H2025. This indicates that even when revenue increases, business profitability alone cannot support earnings, and the company relies heavily on operating subsidies recognised as other income.

Note: The segment table is based on CCXI’s 2025 credit rating report. 1H2025 is on an unaudited interim basis. Not disclosed / not applicable means no figure was provided in the relevant table and should not be interpreted as zero.

Fare services are the most important segment, but also the least able to contribute profit. From 2022 to 2024, passenger traffic increased from 293 million trips to 583 million trips and then 709 million trips, and reached 415 million trips in 1H2025. Fare revenue also increased from RMB470 million to RMB880 million, RMB1.004 billion and RMB568 million. This reflects demand recovery and the opening of new lines. However, gross margins are deeply negative, and the structure is not one in which higher demand alone can eliminate operating losses. Because fares are kept low and operating costs and depreciation are large, fare services are more a policy basis for government support than a repayment source.

Property development and resource development are complementary functions through which the metro company captures urban development value. According to CCXI, the subsidiary Rail Property conducts comprehensive integrated development along rail transit lines and around stations under authorisation from the Zhengzhou municipal government. The mechanism seeks to recover costs and channel returns back to rail transit construction and operations through land control and reserves, integrated design for comprehensive development, and the tender, auction and listing of redeveloped land. This is a rational framework for connecting the externalities of transport infrastructure to fund recovery, but it depends on the land and property market and on sales and leasing of development projects.

The scale of comprehensive development is not negligible. As of end-June 2025, the main comprehensive development projects under construction were Yijia Jingwei, Jingwei Huayue, and Wulongkou over-station property, with planned total investment of RMB4.645 billion and cumulative investment of RMB2.873 billion. Proposed comprehensive development projects, including over-station property development at the Line 14 Tieluxi depot, comprehensive development at the First Affiliated Hospital of Zhengzhou University Station, and over-station property development at the Line 5 Zhongzhou Avenue depot, total RMB31.512 billion. The integrated model of “rail transit construction + over-station property + underground space development + land resource consolidation along rail lines” may become a profit supplement in the future. However, in projects such as Wulongkou over-station property, where sales are intended to balance prior-period investment, sales pace, pricing and cash recovery are credit risks.

Entrusted operations and design services represent the externalisation of the company’s operating and design know-how. Entrusted operations revenue was first confirmed from 2024, and revenue of RMB80 million was also recorded in 1H2025. This indicates that adjacent businesses may increase as public transport integration progresses, but the scale is small relative to the company’s total debt of over RMB180 billion. In credit analysis, these businesses should be treated as supplementary evidence of revenue diversification, not as major drivers of profit improvement.

The conclusion of the segment assessment is that fare services should be viewed as a basis for policy support rather than as a payment source; comprehensive development should be viewed as a complementary funding source, with property and land market risks incorporated; and other businesses should not be over-read as a support for the company’s total debt. For investors, the important issue is not segment-level revenue growth itself, but how operating losses and subsidy recognition, the increase in other receivables, development cash collection, capital expenditure and refinancing connect with each other.

4. Financial Profile and Analysis

The company’s financial profile benefits from a large asset base and substantial government support, but it has clear weaknesses in leverage, interest coverage and operating cash flow. This is not unusual for an urban rail GRE, but the support-driven domestic AAA and international A rating image should not be confused with strong stand-alone earnings power.

From 2022 to 1H2025, CCXI-adjusted total assets increased from RMB214.704 billion to RMB267.666 billion. The bulk of assets comprises fixed assets, construction in progress, other receivables and long-term investments, and liquidity is low given their public infrastructure nature. Fixed assets were RMB141.878 billion at end-2024, and construction in progress was RMB56.452 billion. Construction in progress was RMB58.590 billion at end-1H2025, indicating that the investment burden remains even after completion of the main lines under the three-phase plan. Metro lines, depots, station facilities and operating rights are embedded in public services and are not assets that can easily be sold to repay debt under stress.

On the capital side, government funds have been injected repeatedly. In 2024 and 1H2025, the company received RMB1.592 billion and RMB1.070 billion, respectively, from Zhengzhou Finance Bureau as capital funds for rail transit projects, which were recorded in capital reserve. RMB550 million had been confirmed as of 1Q2025, increasing to RMB1.070 billion by 1H2025. This is a track record of government support and supports the financial profile. However, compared with the company’s investment and debt scale, the capital received cannot be described as fully sufficient, and CCXI also notes that the arrival of capital is relatively average.

Earnings power is weak. Operating revenue was RMB600 million in 2022, RMB1.635 billion in 2023, RMB1.822 billion in 2024 and RMB717 million in 1H2025. Revenue increased in 2024 due to higher commodity housing sales / property development revenue and fare revenue, but the overall gross margin was negative 177.98%. Operating business profit narrowed to RMB21 million in 2024 and turned negative at RMB38 million in 1H2025. Net profit was RMB97 million in 2022, RMB68 million in 2023, RMB33 million in 2024 and negative RMB44 million in 1H2025. Earnings cannot be explained without operating subsidies.

Note: Key credit metrics are on a CCXI-adjusted basis. 2022 and 2023 are based on beginning / ending figures in subsequent annual audit reports, 2024 on audited financials, and 1H2025 on unaudited interim financials. The definition may differ from interest-bearing debt in the company’s annual reports.

The most important points in this table are that total debt continues to increase while operating cash flow and EBITDA interest coverage are weak. Total debt was RMB179.202 billion in 2024, EBITDA was RMB5.085 billion, and EBITDA interest coverage was 0.79x. Operating cash flow was negative RMB978 million in 2024 and negative RMB1.591 billion in 1H2025. In other words, the company is not an issuer that can independently absorb interest and construction investment from operating cash flow alone. Its credit strength is supported by government subsidies, capital injections, a largely long-term debt structure, bank credit lines, and access to domestic and offshore bond markets.

The weakness in operating cash flow is also related to the timing of subsidy recognition and cash collection. Operating subsidies were large at RMB7.128 billion in 2024 and RMB4.057 billion in 1H2025, but CCXI notes that these were mainly recorded under other receivables and have increased substantially year by year. Other receivables were RMB36.882 billion at end-2024 and RMB41.393 billion at end-1H2025. Subsidy recognition supports earnings, but delayed cash conversion pushes up working capital and external borrowing needs.

Capital expenditure declined to RMB9.031 billion in 2024 and was RMB3.189 billion in 1H2025. This reflects the effect of the main lines under the three-phase plan approaching completion. However, given proposed rail transit projects of RMB25.350 billion, the scale of comprehensive development projects under construction and proposed, and the 2035 network plan, the investment burden has not disappeared. Even after the peak of three-phase construction has passed, debt growth pressure may increase again depending on the investment and financing model for subsequent plans.

The conclusion on the financial profile is that government support underpins short-term payment capacity, but stand-alone financials are constrained by high leverage, low interest coverage and subsidy dependence. Investors should read the domestic AAA rating and the A rating reported in Fitch-related articles not as evidence of strong operating cash flow, but as a reflection of the relationship with the Zhengzhou municipal government, policy importance and access to capital markets.

5. Structural Considerations for Bondholders

For bondholders, the most important point is to separate the likelihood of government support from the legal protection of individual bonds. Zhengzhou Transportation Development Group is a government-related issuer effectively controlled by Zhengzhou Finance Bureau, and its policy importance as the sole rail transit entity is high. There is also confirmed support through government capital injections, operating subsidies, earmarked funds and resource allocation. However, this does not mean that all debt has a direct and explicit guarantee from the Zhengzhou municipal government or the Chinese government.

The 2024 annual report states that the outstanding green medium-term notes had no credit enhancement mechanism at the end of the reporting period. CCXI’s 2025 tracking rating report also states that 23郑州地铁GN001, 23郑州地铁GN002, 24郑州地铁GN001 and 24郑州地铁GN002 have no guarantee or credit enhancement measures, and that the credit quality of the bonds is highly correlated with the company’s credit strength. This indicates that, for the domestic bonds, support-driven issuer credit is strong, but there is no explicit guarantee on each bond.

For offshore USD bonds, public reports state that the company issued USD500 million of three-year senior unsecured fixed-rate notes in October 2024, and CBonds also shows a USD500 million bond due 2027. CCXI’s municipal platform comparison also shows head-office bond balances of RMB5.400 billion plus USD500 million as of 20 October 2025. However, this report has not independently confirmed the offering circular, final terms or trust deed for the USD bonds. Therefore, the issuer, ranking, negative pledge, cross default, change of control, tax gross-up, foreign-currency remittance, governing law, paying agent and acceleration provisions of the USD bonds remain unconfirmed items.

The support layers should be separated as follows.

Another structural issue is the location of parent-subsidiary cash flows and business cash flows. The issuer itself is the centre of rail transit construction and investment / financing, while Line 3 is operated by Zhengzhou CCCC Shenzhen Railway Rail Transit Co., Ltd., and the Zhengzhou–Xuchang intercity railway is operated by Henan Zhengxu Rail Transit Co., Ltd. Development along lines and around stations is undertaken by Rail Property. The group as a whole has strong policy importance, but claims under individual bonds depend on the terms relating to issuer, guarantee, security and subsidiary fund transfers. Before investing in a specific bond, investors need to confirm the debtor, guarantor, collateral, revenue pledges, cross default provisions and any senior debt.

Secured and restricted assets also require attention. According to CCXI, at end-2024, fixed assets of RMB14.723 billion created through sale-and-leaseback financing leases were restricted assets, equivalent to 5.66% of total assets. The company has also pledged operating charging rights or fare charging rights for the Phase I project of Line 1, Line 5 and Line 6 rail transit projects, obtaining bank borrowings with an outstanding balance of RMB25.900 billion. This demonstrates funding capacity, but also shows that specific cash flows have already been used as collateral or pledges. This is therefore a structural point for unsecured bondholders to verify.

6. Capital Structure, Liquidity and Funding

The company’s liquidity is supported by its low short-term debt ratio and unused credit lines. However, total debt is large, and operating and investing cash flows readily create funding gaps. Therefore, liquidity should be described not as “sufficient based on internal cash”, but as “sufficient as long as government support, bank credit lines, a long-term debt structure and bond market access continue”.

CCXI-adjusted total debt was RMB186.325 billion at end-1H2025, further up from RMB179.202 billion at end-2024. The short-term debt ratio was low at 4.01% at end-1H2025. The table below is a financing-basis maturity table as of end-1Q2025, and differs in reference date and basis from CCXI-adjusted total debt at end-1H2025. Financing-basis maturities due in April-December 2025 were RMB7.007 billion, RMB32.264 billion in 2026-2027, and RMB145.029 billion in 2028 and thereafter. Bank loans are the largest funding source, and RMB124.501 billion of the RMB146.296 billion total is classified as 2028 and thereafter. Low near-term concentration supports short-term liquidity, but the repayment obligations, equity credit and redemption practices of government special bonds, perpetual trusts, perpetual MTNs and perpetual insurance bonds have not been reviewed in detail in this report.

Note: The table above is based on the financing-basis maturity table as of end-1Q2025 in CCXI’s 2025 tracking rating report. None means no maturity amount was shown in that table, and does not mean the absence of any legal repayment obligation.

Backup liquidity is substantial, but is not equivalent to cash. As of end-March 2025, the company had consolidated bank credit lines of RMB224.943 billion and unused lines of RMB78.647 billion. However, this report has not confirmed whether the unused lines are legally committed, cancellable, concentrated by bank, subject to collateral requirements, or restricted in use. As of end-March 2025, the company also had available bond approval for RMB1.000 billion of private-placement bonds. CCXI states that the company has actively raised funds in the bond market since 2024 and that bond rollover access has been relatively smooth. Reports of a USD500 million bond issuance in October 2024 also indicate offshore market access, but the legal issuer, guarantor and terms of the USD bonds are unconfirmed.

Note: The liquidity table mixes CCXI-adjusted figures, end-1H2025 financials, end-March 2025 credit lines, and head-office bond balances as of 20 October 2025. Given the differences in timing and basis, it should be used to assess direction rather than as a precise point-in-time liquidity calculation.

Funding needs remain large. In 2024, operating cash flow was negative RMB978 million and investing cash flow was negative RMB9.126 billion, while financing cash flow was an inflow of RMB9.735 billion. In 1H2025, operating cash flow was also negative RMB1.591 billion, investing cash flow was negative RMB3.190 billion and financing cash flow was positive RMB5.250 billion. Without external funding and government funds, it is difficult for the company to absorb construction investment, operating losses, interest expense and refinancing. CCXI also states that in 2024, the combination of external debt financing and equity financing such as government allocations did not fully cover the funding gap, and net increase in cash and cash equivalents was negative.

In liquidity assessment, it is important to distinguish short-term default risk from long-term leverage pressure. In the near term, assuming unused credit lines, the low short-term debt ratio, government funds and bond market access are maintained, the likelihood of an abrupt liquidity event is contained. Over the long term, however, the key risks are rising total debt, weak operating cash flow, cash conversion of subsidies, subsequent construction plans, foreign-currency bond redemption and financing regulation. Unused credit lines are an important backup, but should not be treated as equivalent to cash or legally committed liquidity.

7. Rating Agency View

CCXI rates Zhengzhou Transportation Development Group AAA / Stable on the domestic scale. Its 2025 credit rating report dated 4 November 2025 sets the rating validity period from 4 November 2025 to 4 November 2026. The main supports are Zhengzhou’s political and economic position, its leading economic and fiscal strength within Henan Province, the company’s importance in rail transit investment, construction and operation, and its close relationship with the Zhengzhou municipal government. At the same time, CCXI identifies the continued increase in debt scale, persistent losses in metro operations, the receipt of subsidies and subsequent construction progress as key monitoring points.

CCXI’s view is consistent with the core thesis of this report. The company has strong credit quality after incorporating government support, but weak stand-alone earnings. CCXI’s 2025 report states that metro operations have remained loss-making since 2024, financial expenses are large and erode profits, operating business profit has declined, and profits mainly come from operating subsidies. This demonstrates that a domestic AAA rating does not imply strong stand-alone profitability or low leverage.

As downgrade triggers, CCXI cites a clear weakening of shareholder and related-party willingness to support the company due to a decline in the company’s status, a clear deterioration in financial metrics, a deterioration in the refinancing environment, and a decline in backup liquidity. Upside factors are stated as not applicable. This indicates that the company’s credit assessment is already at the highest domestic level, and monitoring is focused more on downside risks related to support, liquidity and financial deterioration than on further improvement.

For Fitch, this report treats the relevant information as secondary-source public articles because the primary release text has not been independently obtained. A public article dated 26 August 2024 reported that Fitch affirmed Zhengzhou Metro Group’s long-term foreign- and local-currency IDRs at A with a Stable Outlook, and also rated the USD senior unsecured notes A. Reports on the USD500 million bond issuance in October 2024 also described the issuer rating at the time of issuance as Fitch A / Stable. Fitch’s own page, the detailed GRE score, and the latest rating status as of 2026 have not been confirmed. Therefore, this report treats the international rating cautiously as historical information / public reporting, and does not state it definitively as the current rating.

When using rating agency views for investment analysis, it is important not to place domestic AAA and Fitch A side by side without qualification. Domestic AAA is a support-driven credit assessment on China’s domestic scale, while Fitch A is an international-scale assessment of a government-related issuer’s credit. Both incorporate substantial government support, but neither means the bond is government-guaranteed. In domestic rating comparisons, Changsha Rail Transit and Wuhan Metro are also rated AAA, but there are differences in financial leverage, interest coverage, urban fiscal strength, network plans, and asset and debt scale.

8. Credit Positioning

Zhengzhou Transportation Development Group is positioned among China’s urban rail GREs as an issuer with high policy importance and a strong regional economic base, but also high leverage and subsidy dependence on a stand-alone basis. Zhengzhou is the capital of Henan Province and has the status of a national central city. Its GDP and general public budget revenue rank first in Henan Province, and population inflow and urbanisation also support the company’s demand base. Therefore, support-driven credit is strong.

CCXI’s 2024 peer data are useful for comparison. Zhengzhou Transportation Development Group had a total capitalisation ratio of 74.50% and EBITDA interest coverage of 0.79x. The comparables shown by CCXI were Changsha Rail Transit, with a total capitalisation ratio of 60.37% and EBITDA interest coverage of 0.85x, and Wuhan Metro, with a total capitalisation ratio of 71.27% and EBITDA interest coverage of 0.13x. Zhengzhou’s interest coverage is higher than Wuhan’s, but its total capitalisation ratio is higher than the comparables. Adjusted owners’ equity was RMB61.332 billion, below Changsha Rail Transit’s RMB71.542 billion and Wuhan Metro’s RMB124.744 billion.

Even among urban rail GREs, the combination of strengths and constraints varies. An issuer in a major city such as Guangzhou Metro has a stronger urban economic scale and deeper capital and business base. Wuhan Metro has a large network scale and a large city base, but very weak interest coverage. Zhengzhou has a high likelihood of support as the central city of Henan Province, but its urban fiscal scale is not as deep as that of first-tier cities or Wuhan, and its total capitalisation ratio is high. Investors should not treat it simply as another A-rated / AAA-rated China metro GRE, but should differentiate by urban fiscal strength, debt ratio, construction peak, subsidy recovery and individual bond terms.

Within municipal platforms, Zhengzhou Transportation Development Group has a large asset base and a clearly defined role. In CCXI’s comparison, Zhengzhou Development Investment Group is the main municipal infrastructure investment and financing entity, Zhengzhou City Development Group is responsible for primary land development, resettlement housing and public rental housing, Zhengzhou Public Utilities Investment Development Group is responsible for municipal public utilities, Zhengzhou Construction Investment Group is responsible for basic infrastructure, and Zhengzhou Transportation Construction Investment is responsible for transport infrastructure. Against this backdrop, Zhengzhou Transportation Development Group is the only urban rail construction and operating company. This supports clarity of role and support priority. At the same time, if the structure within the Zhengzhou Development Investment Group, the debt of other municipal platforms and the burden on local public finances deteriorate simultaneously, the refinancing environment for the region as a whole, rather than the company alone, would be affected.

This report has not obtained live spreads, bond prices, OAS, or comparisons with same-tenor, same-rating bonds. Therefore, it does not make a relative-value conclusion. Based only on public information, the bonds should be viewed as China urban rail GRE exposure backed by Zhengzhou municipal government support, and are more sensitive to government support, the refinancing environment, local government debt policy, China GRE market sentiment, individual bond terms, and USD / RMB liquidity than to the issuer’s stand-alone operating revenue.

9. Key Credit Strengths and Constraints

The company’s greatest credit strength is its policy importance as Zhengzhou’s sole urban rail transit investment, construction and operating entity. Its 450 km network, 13 lines, 286 stations and passenger traffic of more than 700 million trips in 2024 show that the company is deeply embedded in urban functions. Its role in supporting stable public transport operations, urban development and the transport foundation of a national central city strengthens the government’s incentive to maintain the company’s credit standing.

The second strength is Zhengzhou’s economic and fiscal base. 2024 GDP of RMB1,453.210 billion, general public budget revenue of RMB115.504 billion and permanent resident population of 13.086 million rank first within Henan Province. Zhengzhou is also important as a railway, aviation, expressway and logistics hub, and the policy need for urban rail investment is high. The local government debt balance is increasing, but regional fundamentals remain a support when assessing the company’s support-driven credit.

The third strength is the track record of actual support. In 2024 and 1H2025, project capital of RMB1.592 billion and RMB1.070 billion, and operating subsidies of RMB7.128 billion and RMB4.057 billion, respectively, were confirmed. The earmarked public transport infrastructure fund system also sets out a framework under which part of public fiscal budget revenue, land transfer revenue and off-site civil air defence basement construction fees are used for capital injections into metro and intercity railways, operating loss subsidies, and principal and interest repayment on debt funding. This means support is not merely an abstract expectation, but is supported by both a policy framework and a track record. However, this system is a policy funding support framework, and does not mean a direct guarantee or automatic payment of principal and interest on individual bonds.

The fourth strength is liquidity and funding access. The short-term debt ratio was low at 4.01% at end-1H2025, and unused bank credit lines were RMB78.647 billion at end-March 2025. Funding channels are broad, including domestic green medium-term notes, USD bonds, finance leases and debt investment plans, and bond market access since 2024 has been assessed as relatively smooth. This is an important support for short-term payment capacity.

The main constraint is weak operating profitability. Demand in fare services has increased substantially, but the gross margin is deeply negative. The fare system has a strong public-service nature and is not designed to recover costs at market prices. Metro operations improved in 2024, but remained persistently loss-making, and profits cannot be supported without operating subsidies. This constrains the assessment ceiling for stand-alone credit quality.

The second constraint is high leverage. Total debt was RMB186.325 billion at end-1H2025, and the total capitalisation ratio was 74.98%, continuing to rise since 2022. EBITDA interest coverage remained only 0.79x in 2024, and operating cash flow interest coverage was negative. The long-term bias of the debt structure is supportive, but the absolute amount of total debt is large.

The third constraint is the timing of subsidies and development cash collection. Operating subsidies support profits, but may create funding occupation through an increase in other receivables. Comprehensive development along rail lines can become a complementary revenue source in the future, but it is affected by the property market, sales, leasing, land transfers and development schedules. The continued decline in Zhengzhou’s government fund revenue in 2024 also warrants caution for both development along rail lines and local public finances.

The fourth constraint is the lack of confirmed legal guarantee. The likelihood of government support is high, but within the confirmed scope domestic MTNs have no credit enhancement, and USD bond terms are unconfirmed. Issuer-level support-driven credit strength and legal recovery under a specific bond need to be assessed separately.

10. Downside Scenarios and Monitoring Triggers

The most realistic downside scenario is that the cash arrival of government support is delayed, and the period during which operating losses and construction investment are funded by external borrowings becomes prolonged. Even if operating subsidies are recognised as other income, delayed cash receipt would increase other receivables and weaken operating cash flow. While the short-term debt ratio remains low, this is less likely to become an immediate liquidity event, but dependence on external borrowing, bond issuance and bank credit lines would increase.

The second downside scenario is that subsequent construction again creates substantial capital expenditure. The main lines under the three-phase plan have been completed, but proposed projects such as T1, T3 and S2, the 2035 and 2050 network plans, over-station property, underground space and land resource development along rail lines leave investment burdens. If government capital arrives late or the investment and financing model relies on issuer debt, the total capitalisation ratio could rise further.

The third downside scenario is weakness in the land and property market. Comprehensive development is designed to supplement metro construction and operations through sales, leasing and land value capture, but its role as a complementary income source would weaken if poor sales, price declines, delayed cash collection and weak government fund revenue occur simultaneously. For projects such as Wulongkou over-station property and proposed over-station property developments, project-level sales and investment recovery need to be checked.

The fourth downside scenario is a deterioration in the refinancing environment. CCXI describes Zhengzhou’s refinancing environment as “acceptable”, while also noting non-standard financing-related public sentiment. If regulation of domestic urban investment / infrastructure investment enterprises, bond borrowing-to-repay policy, local government debt resolution, investor risk appetite or banks’ credit stance deteriorate, the company’s funding cost and funding headroom would be affected. For USD bonds, China local GRE market sentiment, USD interest rates, exchange rates and foreign-currency remittance practices are additional factors.

The fifth downside scenario is a change in rating agencies’ support assessment. If the company’s status declines, government willingness to support weakens, financial metrics deteriorate clearly, or backup liquidity declines, there could be downward pressure on CCXI’s domestic rating. The A rating reported in Fitch-related articles could also be affected if the Zhengzhou municipal government’s support capacity or willingness, China sovereign / local government support policy, or the issuer’s government-relatedness weakens.

11. Credit View and Monitoring Focus

The key financial information obtained is based on 2024 audited financials, 1H2025 unaudited financials and CCXI’s 2025 credit rating report. As of the public search date of 22 May 2026, the 2025 full-year audited annual report and 1Q2026 financials had not been confirmed. Subject to this limitation, Zhengzhou Transportation Development Group’s current credit quality is not high on a stand-alone basis, but can be treated as a strong China urban rail GRE after incorporating support from the Zhengzhou municipal government. The credit trajectory is more stable than improving in the near term, as high leverage and operating losses are being contained through government support and refinancing access. Under normal conditions, the likelihood of a rapid change in credit level or direction is not high. However, if delayed subsidy receipt, deterioration in the refinancing environment, subsequent construction burden, weak property cash collection and a decline in local government support assessment occur simultaneously, the support-driven credit could weaken relatively quickly.

The most important point in assessing this issuer’s credit is not to conflate support-driven credit and stand-alone credit. Policy importance is very high because the company is Zhengzhou’s only urban rail transit entity, and the track record of government support is specific. Capital injections since 2024, operating subsidies, the earmarked fund system, resource allocation for development along rail lines, bank credit lines, and access to domestic and offshore bond markets reduce short-term payment default risk. The short-term debt ratio is low and unused credit lines are large. However, the legal commitment nature and use conditions of those lines are unconfirmed. Therefore, a sudden near-term liquidity squeeze is not the central scenario, but the assessment assumes the continued availability of bank, policy and market support.

At the same time, stand-alone financials are clearly constrained. Total debt was RMB186.325 billion at end-1H2025, the total capitalisation ratio was 74.98%, and 2024 EBITDA interest coverage was only 0.79x. Even as demand grows, fare services are deeply gross-loss-making, and net profit was negative in 1H2025 despite recognition of RMB4.057 billion of operating subsidies as other income. Therefore, a decision to buy, hold or avoid the issuer should depend not on expectations of operating profitability, but on confirmation of continued government support, cash conversion of subsidies, refinancing access, bond terms and spread compensation.

At the issuer credit level, this is a China urban rail GRE that can be considered for holding after incorporating support from the Zhengzhou municipal government. However, it should not be treated as an unconditionally strong credit. Zhengzhou’s economic scale is strong within Henan Province, but the government debt balance and debt ratio are rising, and government fund revenue is affected by the property market. Network expansion increases policy importance, but also increases capital expenditure and operating losses. Government support can be expected, but the legal claim investors receive depends on individual bond contracts.

For USD bondholders, the fact that public reports and CBonds link a USD500 million bond due 2027 to the company, and that Fitch-related articles report A / Stable, are positive factors. However, because the offering circular and trust deed have not been reviewed, investors should not proceed to an investment decision without confirming the USD bond’s legal issuer, guarantor, government guarantee, collateral, negative pledge, cross default, change of control, tax, foreign-currency remittance and governing law. For domestic MTNs as well, within the confirmed scope there is no credit enhancement, and the bonds depend on support-driven issuer credit.

This report has not confirmed live spreads, so relative value judgment is left open. From a credit perspective alone, ZZMTRG may be considered as a strong China urban rail GRE on a support-driven basis. Fitch-related articles report A / Stable, but the primary release and current rating status are unconfirmed. Given weak stand-alone financials, local government debt, subsidy cash conversion, subsequent construction and individual bond terms, investors should require sufficient spread compensation relative to other China GREs or near-sovereign names of the same rating and tenor. The next update should prioritise the 2025 full-year annual report, 1Q2026 financials, Fitch primary release, USD bond terms, subsidy recovery and other receivables, and the handling of 2026-2027 maturities.

12. Short Summary & Conclusion

Zhengzhou Transportation Development Investment Group, formerly Zhengzhou Metro Group, is Zhengzhou’s sole urban rail transit investment, construction and operating entity, and is a policy-important China urban rail GRE responsible for a network of 13 lines and 450 km. It can be treated as a strong credit after incorporating government support, but fare services are deeply loss-making, total debt is increasing, and interest coverage is weak. For bond investment, investors need to continue monitoring the absence of a direct government guarantee, subsidy recovery, subsequent construction and individual bond terms.

13. Sources

• Zhengzhou Transportation Development Investment Group, official company profile, accessed 2026-05-22: https://zzmetro.cn/about/us/0/10
• Zhengzhou Municipal Government, 郑州交通发展投资集团有限公司揭牌成立, 2024-12-30: https://www.zhengzhou.gov.cn/news1/8952421.jhtml
• Zhengzhou Municipal Government, 郑州地铁2024年总客运量7.1亿人次, 2025-01-21: https://www.zhengzhou.gov.cn/news1/9019465.jhtml
• Shanghai Clearing House, 郑州交通发展投资集团有限公司2024年年度报告, disclosed 2025-04-30: https://www.shclearing.com.cn/xxpl/cwbg/nb/202504/t20250430_1581939.html
• Company 2024 annual report PDF mirror, 郑州交通发展投资集团有限公司年度报告（2024年）: https://qxb-pdf-osscache.qixin.com/AnBaseinfo/b5bc9b89b228ef1dc47291ee7fd191b8.pdf
• Company 2025 semi-annual report PDF mirror, 郑州交通发展投资集团有限公司半年度报告（2025年）: https://qxb-pdf-osscache.qixin.com/AnBaseinfo/62f3fa80d99f29bdd23aa88d8c406719.pdf
• CCXI / ChinaMoney, 2025年度郑州交通发展投资集团有限公司信用评级报告, report date 2025-11-04, published 2026-04-09: https://www.chinamoney.com.cn/dqs/cm-s-notice-query/fileDownLoad.do?contentId=3311941&mode=save&priority=0
• CCXI / PDF mirror, 郑州交通发展投资集团有限公司2025年度跟踪评级报告, 2025-07-18: https://qxb-pdf-osscache.qixin.com/AnBaseinfo/1870041e4b9c0fcd9653c5b7a72dbeac.pdf
• Zhengzhou Statistics Bureau, 2024年郑州市国民经济和社会发展统计公报: https://tjj.zhengzhou.gov.cn/tjgb/9230847.jhtml
• Henan Provincial Government portal, 郑州公示城市轨道交通线网规划, 2024-12-19: https://www.henan.gov.cn/2024/12-19/3100922.html
• Sina Finance / public Fitch-related article, 惠誉确认郑州地铁长期外币和本币发行人违约评级为“A”, 2024-08-26: https://finance.sina.cn/stock/estate/2024-08-26/detail-inckykxf4849189.d.html
• Sina Finance, public article on 2024 USD bond pricing, 2024-10-31: https://finance.sina.cn/2024-10-31/detail-incumwnf9718311.d.html
• CBonds, Zhengzhou Metro Group international bond page, accessed 2026-05-22: https://cbonds.com/bonds/1169195/

Unverified / Pending

• The 2025 full-year audited annual report and 1Q2026 financials had not been confirmed through public searches as of 22 May 2026. The next update should re-check ChinaMoney, Shanghai Clearing House, SSE / CNInfo and the company’s official announcements.
• Fitch’s primary release page and detailed GRE score have not been confirmed. Statements regarding Fitch are treated as secondary-source information based on public articles and issuance reports.
• The current rating status from Moody’s and S&P has not been confirmed.
• The offering circular, final terms, trust deed, negative pledge, cross default, change of control, tax gross-up, governing law and foreign-currency remittance practices for the USD500 million bond have not been confirmed.
• For the RMB78.647 billion of unused bank credit lines, whether the lines are committed or cancellable, the bank-by-bank breakdown, collateral conditions and usage restrictions have not been confirmed.
• For the government special bonds, perpetual trusts, perpetual MTNs and perpetual insurance bonds included in the financing-basis maturity table as of end-1Q2025, the company’s repayment obligations, equity credit, redemption practice and ranking relative to bondholders have not been confirmed.
• For domestic MTNs as well, detailed terms in the offering memoranda have not been confirmed. The 2024 annual report and CCXI materials state that there is no credit enhancement mechanism, but before investing in individual bonds, the offering memoranda and trustee / ongoing-period management documents should be reviewed.
• Live spreads, bond prices, OAS, CDS and relative value versus same-tenor, same-rating bonds have not been obtained, and this report does not conclude whether the bonds are cheap or expensive.