Zhongyuan Yuzi Investment Holding Issuer Summary

Report date: 2026-05-22

Issuer: Zhongyuan Yuzi Investment Holding Group Co., Ltd. / 中原豫资投资控股集团有限公司
Ticker reference: HNYUZI
Country: China
Sector: Henan provincial GRE / state capital operation / policy investment and financing

1. Business Snapshot and Recent Developments

Zhongyuan Yuzi Investment Holding Group Co., Ltd. (Zhongyuan Yuzi / 中原豫资) is a provincial-level government-related investment and financing platform in Henan Province. For credit analysis purposes, it should not be treated as a simple municipal- or county-level LGFV, a private-sector property company, or a direct obligation of the Chinese central government or the Henan provincial government. More precisely, the issuer should be viewed as a provincial-level GRE responsible for state capital operation, urbanisation and affordable housing, policy project funding, industrial guidance funds, and financial services in Henan Province.

The company was established in May 2011 as 河南省豫资城乡投资发展有限公司 to support Henan Province’s new-type urbanisation and urban-rural integration. It changed to its current name in 2017, and its official profile states that it was formally reorganised as a state capital operation company in February 2024. The FY2025 annual report identifies the State-owned Assets Supervision and Administration Commission of the Henan Provincial People’s Government (Henan SASAC) as the actual controller holding 100% of the company’s equity and voting rights.

The company’s credit strength is materially supplemented by its policy importance and expected support, rather than by its standalone earnings power. The official profile positions the company as the “main platform for state capital operation”, an “accelerator for scientific and technological innovation”, a “vanguard for strategic emerging industry investment”, and a “toolbox for financial services”. CCXI’s 2025 surveillance rating report also describes the company as Henan Province’s provincial-level state capital operation company, the only provincial-level investment and financing entity for urbanisation and affordable housing construction in Henan Province, a major recipient of policy-bank funding for shantytown redevelopment, and an important provincial-level industrial guidance investment company.

However, this policy importance, while implying strong support expectations, should not obscure weak standalone cash flow. In the FY2025 annual report, total assets were RMB321.03bn, total liabilities were RMB205.04bn, and net assets were RMB115.99bn. Revenue was RMB8.25bn, while net profit was a loss of RMB0.17bn and net profit attributable to shareholders of the parent was a loss of RMB0.31bn. Operating cash flow was only RMB0.53bn, thin relative to finance expenses of RMB2.50bn and total interest expense of RMB3.28bn.

Capital market access is an important credit support. According to company disclosures, the company issued a USD500mn offshore sustainable bond in June 2024, with a final issue price of 5.9% and an orderbook of roughly 5x. CCXI also maintained the company’s issuer rating at AAA / Stable and the relevant domestic bonds at AAA in June 2025. However, the domestic AAA rating and offshore issuance record are evidence of refinancing access and support expectations; they do not mean that standalone repayment capacity is strong or that there is a legal guarantee from the Henan provincial government.

2. Government Linkage, Policy Mandate and Support Analysis

The starting point for support analysis is ownership, policy mandate, and evidence of support. The paid-in capital and related-party notes in the FY2025 annual report show that Henan SASAC owns 100% of the company and holds 100% of the voting rights. The annual report also shows the historical formation and increase of capital through the Henan Provincial Department of Finance and the provincial state-owned assets management centre. The official profile states that the company was incorporated into the group of key provincial-level enterprises in 2017, that its party-organisation relationship and investor responsibilities were adjusted in 2021, and that it was reorganised as a state capital operation company in 2024.

The policy mandate is not a peripheral description of the company’s business; it is a factor that shapes the balance sheet itself. The company is involved in affordable housing, shantytown redevelopment, urbanisation, funds lending and on-lending, guarantees and credit enhancement, industrial funds, state capital operation, coal-to-gas conversion and gas, construction and engineering, asset operation, and other activities. CCXI describes the company as Henan Province’s investment and financing platform for affordable housing and urbanisation, a major recipient of shantytown redevelopment funding from policy banks such as China Development Bank, and a provincial-level industrial guidance investment company.

Henan Province’s support capacity is meaningful, but not unconstrained. According to CCXI, Henan Province’s 2024 GDP was RMB6,358.999bn, with growth of 5.1%; general public budget revenue was RMB439.891bn; government fund revenue was RMB185.690bn; and the local government debt balance was RMB2,130.608bn. Henan has a large economic scale within China and advantages in transport and population, but its fiscal self-sufficiency, government fund revenue, and exposure to the property and land markets cannot be ignored. HNYUZI’s support expectation depends on this policy, fiscal, and financial environment in Henan Province.

There is identifiable evidence of support. CCXI states that in 2024 the company received a RMB250mn capital injection from Henan SASAC, RMB582mn of government special-purpose funds, and RMB616mn of government subsidies. In the FY2025 annual report, government subsidies recognised in profit or loss were RMB371mn, while government subsidies included in deferred income at period-end were RMB740mn. These are concrete pieces of support evidence backing the company’s policy execution, and it is a strength that the support story does not rely solely on ownership.

At the same time, the quality and timing of support require caution. The support identified to date is not a direct guarantee for debt repayment, but capital injections, subsidies, special-purpose funds, and support for policy projects. In terms of scale, the aggregate RMB1.45bn of capital injections, special-purpose funds, and government subsidies in 2024 cited by CCXI is only about 0.8% of CCXI-adjusted total debt of RMB182.42bn. The FY2025 government subsidy of RMB371mn is also small relative to total liabilities of RMB205.04bn. Support expectations are strong, but one should not assume that liquidity support of the same amount and at the same timing will be provided before bond maturities.

Therefore, the appropriate conclusion on government support is that support expectations are strong, but they are not a legal guarantee. Henan Province has a strong incentive to support the company. Dysfunction at a provincial-level policy platform could affect affordable housing, urbanisation, industrial funds, credit enhancement, and policy funding flows to counties and municipalities. However, support may take the form of project-level support, capital-type support, subsidies, or refinancing coordination. For bondholders, the key question is not only whether support exists, but which legal entity receives the support, at what time, and for which obligations.

3. Segment and Asset Assessment

Zhongyuan Yuzi’s business is easier to analyse by asset function rather than by a single sector label. Broadly, it consists of policy receivables and urbanisation funding, financial services such as guarantees and credit enhancement, funds and equity investments, construction and engineering, gas and coal-to-gas conversion, asset operation, commodity sales, and other businesses. These activities broaden the company’s policy importance and funding channels, but they also make standalone profitability, asset liquidity, and the location of risk harder to assess.

In the FY2025 annual report, revenue was RMB8.25bn and operating costs were RMB4.83bn. By nature, the main items were interest income of RMB1.70bn, asset operation revenue of RMB1.34bn, guarantee and consulting revenue of RMB1.14bn, engineering construction revenue of RMB1.10bn, commodity sales of RMB0.92bn, high-standard farmland revenue of RMB0.57bn, lease income of RMB0.44bn, and credit enhancement business revenue of RMB0.43bn. These categories do not fully align with CCXI’s analytical segmentation for 2024, but under either approach, revenue is diversified, policy-oriented, and materially dependent on financial activities, investments, fair-value items, and government subsidies.

The most important asset item is long-term receivables. At FY2025 year-end, long-term receivables were RMB104.99bn after deducting amounts due within one year, while the gross amount before deduction exceeded RMB110bn. The notes show that these include province-wide affordable housing and settlement projects, government-purchased services, shantytown redevelopment and resettlement housing, the “百城提质” programme, the “双百亿计划”, and PPP project receivables. This asset supports the policy mandate, but it is not cash. For credit purposes, the key questions are who repays, from which funding source, and on what schedule. Recovery depends on land transfer revenue, local fiscal resources, government-purchased services, project progress, and collateral and impairment conditions.

CCXI’s project disclosures show recovery performance in some programmes. As of the end of 1Q2025, the “百亿计划” involved 24 projects, total investment of RMB10.259bn, capital of RMB3.142bn, Agricultural Development Bank loan applications of RMB7.117bn, cumulative disbursements of RMB6.417bn, and full recovery of the company’s project capital and on-lending funds. The “双百亿计划” involved 62 projects, total investment of RMB32.004bn, capital of RMB9.364bn, loan applications of RMB22.640bn, cumulative disbursements of RMB19.060bn, and loan recoveries of RMB19.040bn. These are positive as recovery records for specific programmes, but they do not eliminate credit risk across the entire long-term receivables book.

The larger exposure is related to affordable housing. According to CCXI, the “Henan Province public rental housing unified lending and repayment plan” involved 349 projects, total investment of RMB34.833bn, capital of RMB10.927bn, contracted loans of RMB23.906bn, disbursed loans of RMB19.621bn, and loan recoveries of RMB17.487bn. The “province-wide affordable housing and settlement project” involved 134 projects, total investment of RMB142.336bn, capital of RMB32.289bn, loan applications of RMB110.047bn, disbursed loans of RMB92.349bn, and loan recoveries of RMB65.739bn. HNYUZI’s credit risk depends materially on the extent to which these policy assets are converted into cash as scheduled.

Financial and investment assets are also large. At FY2025 year-end, debt investments were RMB12.63bn, long-term equity investments were RMB11.42bn, other equity instrument investments were RMB7.70bn, and other non-current financial assets were RMB17.55bn. These may generate investment income, dividends, disposal gains, and potential liquidity, but they also entail fair-value volatility, exit risk, low returns on policy investments, and additional capital commitment obligations. The fund management scale described in the official profile indicates the strength of the policy franchise, but it does not itself constitute a source of debt repayment.

FY2025 investment income was RMB1.38bn, and fair-value change gains were RMB0.36bn, making them important contributors to earnings. Even so, overall net profit was negative. This indicates that investment assets supplement earnings but have not fully absorbed interest expenses, impairments, and losses from weaker subsidiaries. In future updates, it will be necessary to track whether investment income is recurring dividends and interest, or one-off disposal gains, and the scale of outstanding capital commitments and valuation loss risk.

Guarantees and credit enhancement are an important franchise for the company and, at the same time, a contingent liability risk. CCXI assesses 中豫担保 and 中豫信増 as having strong market competitiveness in Henan Province and states that no subrogated repayments occurred from 2024 through 1Q2025. 中豫担保 had total assets of RMB18.906bn and owners’ equity of RMB13.956bn at the end of 1Q2025, and net profit of RMB627mn in 2024. 中豫信増 had net profit of RMB518mn in 2024, credit enhancement balance of RMB31.992bn at the end of 1Q2025, and a credit enhancement responsibility balance of RMB22.915bn after regulatory conversion.

These financial services increase the company’s importance within Henan’s financial system. However, guarantee and credit enhancement businesses are also businesses in which losses may emerge with a lag during economic downturns or periods of stress among local platforms. CCXI puts the external guarantee balance at RMB11.58bn at end-2024, equivalent to 9.76% of adjusted net assets, and notes that some guaranteed parties have public records such as enforcement proceedings, dishonesty records, and consumption restrictions. Subrogation rates, recovery rates, collateral quality, regional and industry concentration, and exposures to weaker county- and municipal-level platforms or private-sector companies should be checked going forward.

Palm Eco-Town (棕榈股份) is not merely the name of a subsidiary, but a specific earnings and governance risk. According to CCXI, Palm Eco-Town recorded a net loss of RMB1.585bn in 2024 and another loss of RMB0.164bn in 1Q2025, while its asset-liability ratio remained at around 90%. CCXI also points to litigation and arbitration, debt repayment through transfers of equity interests in wholly owned subsidiaries, and letters of concern and regulatory letters from the Shenzhen Stock Exchange. It was one factor behind Zhongyuan Yuzi group’s loss in 2024, and the group as a whole remained loss-making in FY2025.

The Palm shares have potential listed-asset value, but their liquidity should not be overstated. According to CCXI, 豫资保障房 held 540.5874mn shares of Palm Eco-Town at the end of 1Q2025, representing 29.82% of equity and voting rights, with no pledge. Even so, given weak operating performance, litigation, high leverage, and constraints associated with policy and market stability as controlling shareholder, the fact that the shares are listed does not necessarily mean they can be freely and immediately monetised.

The gas and coal-to-gas conversion business combines policy importance with low profitability. According to CCXI, Phase I of Henan Province’s coal-to-gas conversion project planned to cover 4.5mn households across 16 cities and 110 counties and districts. As of the end of 1Q2025, 1.98mn households had been completed, 1.59mn users met the conditions for gas supply, 0.75mn users were actually using gas, and cumulative investment was RMB8.39bn. As a livelihood project, the business is subject to the principles that farmers are not charged initial installation fees and gas prices should not exceed those for urban residential users, limiting cost pass-through. This increases policy support expectations, but pressures standalone earnings.

4. Financial Profile and Analysis

FY2025 financials clearly show the profile of a large but low-return entity. Total assets were RMB321.03bn, down from the FY2024 comparative figure of RMB338.20bn in the FY2025 annual report. Total liabilities declined from RMB219.57bn to RMB205.04bn, while net assets also declined from RMB118.63bn to RMB115.99bn. The audited asset-liability ratio was about 63.9%, but assets include long-term receivables, financial assets, policy investments, and minority interests, so it would be risky to judge repayment capacity based only on accounting equity.

Revenue increased slightly in FY2025, but earnings quality was weak. Against revenue of RMB8.25bn, finance expenses were RMB2.50bn and total interest expense was RMB3.28bn. Investment income of RMB1.38bn, fair-value change gains of RMB0.36bn, and other income including government subsidies of RMB0.37bn supported earnings, but net profit was still a loss of RMB0.17bn and net profit attributable to shareholders of the parent was a loss of RMB0.31bn. This shows that the operating businesses have limited capacity to absorb the debt burden on their own.

Cash flow points to the same conclusion. FY2025 operating cash flow was RMB0.53bn, equivalent to only about 16% of total interest expense of RMB3.28bn and about 21% of finance expenses of RMB2.50bn. Investing cash flow was positive RMB7.16bn, but this reflected substantial turnover between investment recoveries and investment outflows, and should not be treated as recurring operating repayment capacity. Financing cash flow was negative RMB10.22bn, and cash and cash equivalents declined by RMB2.52bn.

Liquidity metrics are weak excluding support expectations. At FY2025 year-end, cash and cash equivalents were RMB12.91bn, equivalent to about 34% of the aggregate RMB37.63bn of short-term borrowings of RMB9.48bn and non-current liabilities due within one year of RMB28.15bn. Total cash and bank balances were RMB27.14bn, but RMB14.23bn of this amount was restricted monetary funds and cannot easily be treated as freely available cash. Total restricted assets were RMB17.45bn.

Looking at liability items in the annual report, short-term borrowings were RMB9.48bn, non-current liabilities due within one year were RMB28.15bn, long-term borrowings after deducting the current portion were RMB101.82bn, bonds payable after deducting the current portion were RMB19.01bn, and long-term payables were RMB16.02bn. A simple sum of these items does not match CCXI’s adjusted total debt, because CCXI calculates total debt after adjusting for debt-like items in other payables, other current liabilities, long-term payables, other non-current liabilities, and minority interests. For credit analysis, CCXI’s adjusted total debt provides a more conservative indication of the debt burden.

CCXI’s time-series data also confirms weak leverage and interest coverage. CCXI-adjusted total debt was RMB189.05bn in 2022, RMB189.31bn in 2023, RMB182.42bn in 2024, and RMB181.75bn in 1Q2025. The total capitalisation ratio was 60.59% in 2024, EBITDA interest coverage was 1.09x, and operating cash flow interest coverage was 0.62x. These may be tolerable for a provincial-level support platform, but they are thin for a standalone company.

The FY2025 annual report shows that both assets and liabilities contracted, but this should not be read simply as clean deleveraging. Current liabilities increased from RMB58.53bn to RMB66.57bn, while non-current liabilities declined from RMB161.05bn to RMB138.47bn. This may include repayments and reclassifications, but it increases the importance of managing near-term maturities. Non-current liabilities due within one year also increased from RMB22.25bn to RMB28.15bn.

Profit attribution also requires attention. FY2025 profit before tax was positive at RMB0.40bn, but income tax expense of RMB0.57bn pushed net profit into a loss. Because minority interests generated positive profit, the loss attributable to shareholders of the parent was RMB0.31bn, larger than the consolidated net loss. When assessing parent-company bonds or offshore bonds, it is necessary to check not only consolidated total assets, but also profit, cash, and capital attributable to the parent.

Impairment remains a continuing monitoring item. FY2025 credit impairment losses were RMB0.63bn and included bad-debt losses, impairment of debt investments, and bad-debt losses on factoring receivables. Asset impairment losses included contract assets, long-term equity investments, and fixed assets. The amount is not excessive relative to total assets, but in a structure that includes receivables and weak subsidiaries, the direction of impairment can affect credit assessment.

In conclusion, the financial profile should be viewed in two layers. Including support, the company has meaningful credit strength and refinancing access as a provincial-level policy platform. On a standalone basis, however, interest coverage, operating cash flow, free cash, and near-term maturity coverage are all weak. In assessing HNYUZI, it is necessary to keep these two layers separate and to state explicitly how far support expectations can compensate for standalone weakness.

5. Structural Considerations for Bondholders

HNYUZI-related bonds need to be analysed security by security. The group has domestic MTNs, corporate bonds, bank loans, borrowings from non-bank financial institutions, other interest-bearing debt, and offshore bond access. The issuer, guarantor, ranking, investor protection provisions, governing law, cross-default provisions, remittance conditions, and guarantee registration conditions may differ by security. Issuer-level support expectations are useful, but they are not a substitute for security documentation.

Domestic direct debt is typically a claim against the company itself and is governed by each bond’s contractual terms, ranking, and investor protection provisions. The 20 中原豫资MTN001 and 20 中原豫资债01/20 豫资1 tracked by CCXI are maintained at AAA, and CCXI states that no separate collateral, guarantee, or credit enhancement measures are attached to these bonds. Therefore, the credit strength of these domestic bonds is strongly linked to the company’s own credit profile, refinancing access, and external support expectations.

For the USD500mn offshore sustainable bond issued in 2024, the company news confirms the issuance, size, pricing, and investor demand. However, this report has not reviewed the offering circular or final terms. Therefore, the issuer, guarantor, guarantee registration, ranking, negative pledge, cross-default, change of control, tax gross-up, events of default, presence or absence of keepwell arrangements, governing law, and remittance constraints remain unconfirmed. This report treats offshore bond access as a funding record and does not draw conclusions on security-specific protections.

Structural subordination on the asset side is also important. Much of the company’s value sits in subsidiaries, project companies, long-term receivables, funds, financial assets, and policy investments. Creditors of the parent company or offshore SPV may not have direct access to project cash flows and may instead depend on dividends, repayments, asset disposals, refinancing, and fund transfers through government support. If there are minority interests, restricted cash, pledged assets, or subsidiary-level debt, recovery channels become even more complex.

Therefore, HNYUZI-related bonds are corporate / GRE credits with support expectations; they are not Henan provincial government bonds. Support expectations may support a stronger credit assessment than the standalone financial profile, but documentation risk, refinancing risk, and asset liquidity risk remain.

6. Liquidity, Capital Structure and Funding Access

The liquidity assessment is mixed. On the positive side, the company has a large balance sheet, a domestic AAA rating, a provincial-level policy role, bank relationships, a domestic bond issuance record, and an offshore bond issuance record. According to CCXI, total bank credit lines at the end of 1Q2025 were RMB441.989bn, unused credit lines were RMB145.982bn, and unused credit lines from non-policy banks were RMB111.619bn. CCXI also states that the parent company had available quotas for medium-term notes and private placement bonds.

On the negative side, cash alone does not provide sufficient coverage of near-term debt. At FY2025 year-end, cash and cash equivalents of RMB12.91bn covered only about 34% of the aggregate RMB37.63bn of short-term borrowings and non-current liabilities due within one year. Even total cash and bank balances of RMB27.14bn included RMB14.23bn of restricted monetary funds. Therefore, the company’s liquidity depends more on bank loan rollovers, domestic bond issuance, project recoveries, policy support, and asset recoveries than on free cash.

CCXI’s 2024 debt maturity table provides a directional reference. The table is on the corporate bond annual-report basis and shows total debt of RMB181.14bn, of which RMB29.21bn was due within one year and RMB151.93bn was due after one year. Debt is split into corporate credit bonds, bank loans, loans from non-bank financial institutions, and other interest-bearing debt. The FY2025 annual report also confirms the size of near-term maturities and long-term borrowings. A full 2026-2028 maturity ladder, including put / call terms, offshore bonds, private placement bonds, and non-standard financing, remains a task for future review.

The funding base is likely stronger than that of weaker municipal- or county-level LGFVs. Provincial ownership, policy importance, domestic AAA rating, bank credit lines, and domestic and offshore issuance records are favourable for refinancing. However, if the funding environment deteriorates, the company would find it difficult to roll over debt using operating cash flow alone. If domestic policy becomes stricter on platform refinancing or investors increase differentiation among provincial-level platforms, support expectations would be tested.

The interest burden is also not light. FY2025 interest expense was RMB3.28bn, and finance expenses were RMB2.50bn. With operating cash flow of only RMB0.53bn, higher refinancing costs or shorter tenors would quickly affect credit metrics. The domestic AAA rating and provincial-level policy role are economically important for maintaining access to low-cost funding.

7. Rating Agency View

In its 2025 surveillance rating, CCXI maintained Zhongyuan Yuzi’s issuer rating at AAA with a Stable outlook and maintained the relevant domestic bonds at AAA. The rating logic is support-driven. CCXI emphasises Henan Province’s economic and fiscal strength, the company’s position as a provincial-level state capital operation company, its role as an investment and financing platform for affordable housing and urbanisation, its function as a recipient of policy-bank funds, and its close relationship with the Henan provincial government.

At the same time, CCXI clearly identifies constraints. These include the impact of the land market and policy, differences in county and municipal land markets, losses, litigation, and regulatory issues at Palm Eco-Town, contingent liabilities from external guarantees, the large debt scale, leverage, and weak cash-flow interest coverage. CCXI’s downgrade triggers also focus on deterioration in the regional economic environment, decline in the company’s status, weaker support willingness, clear deterioration in financial indicators, deterioration in the refinancing environment, and a reduction in backup liquidity.

The domestic AAA rating is important for confidence in domestic funding markets, but it is not equivalent to an international rating. Domestic ratings reflect China’s domestic comparison framework and support assumptions, and differ in scale from the recovery prospects, enforceability of offshore guarantees, and cross-border remittance risk assessed by international investors for foreign-currency bonds. This report does not use unverified international rating levels from Fitch or other agencies as a basis for credit assessment.

The rating-agency view should therefore be read as follows. Domestic support expectations and domestic refinancing access are strong, and the domestic rating is high. However, standalone earnings, liquidity, and debt coverage are thin, and the credit view could change materially if support assumptions weaken. Offshore bond investors should not translate the domestic AAA rating directly into an international rating or legal protection, and should separately verify the OC, guarantee, maturity, and foreign-currency liquidity.

8. Credit Positioning

HNYUZI should be positioned not as a standalone operating company, but as a Henan provincial-level support-expectation credit. Compared with lower-tier municipal- and county-level LGFVs, support expectations are relatively strong because of provincial ownership, a broad policy mandate, financial service functions, bank and domestic bond access, and its official position as a state capital operation company. At the same time, compared with operating GREs such as toll roads, railways, power, or gas utilities, the company has receivables, funds, financial assets, guarantees, and loss-making subsidiaries, which makes the standalone cash-flow outlook more complex.

Conceptual comparables within Henan Province could include Henan Railway Construction & Investment Group, Henan Investment Group, Henan Transport Investment, and major Zhengzhou-related platforms. A railway platform such as HNRAIL has asset characteristics more tilted toward transport infrastructure, but also faces the burden of long-term investment recovery and railway economics. HNYUZI is more tilted toward policy finance, capital operation, funds, and affordable housing; its support importance is high, but the transparency of repayment sources is lower.

CCXI compares HNYUZI with Jiangxi Railway Aviation Investment and Hebei Construction & Investment, noting that HNYUZI has a large asset and equity base, but weaker EBITDA interest coverage and higher financial leverage. This comparison captures HNYUZI’s credit profile well. Scale and policy role are strong, but the debt repayment cushion is thin.

For offshore investors, HNYUZI is a credit where “Henan provincial-level support expectations” coexist with “unverified security documentation risk”. If the investment thesis is that Henan Province will maintain domestic and offshore market access for major provincial-level platforms, HNYUZI fits that thesis. However, on a standalone basis, it is weak for investors seeking stable EBITDA, free cash flow, simple asset backing, or a clear legal government guarantee.

9. Key Credit Strengths

The first strength is provincial-level policy importance. Zhongyuan Yuzi is an issuer responsible for Henan Province’s state capital operation, urbanisation, affordable housing, policy investment and financing, industrial funds, and financial services, and the support incentive is stronger than for a small local platform. If these functions became unstable, Henan’s policy execution and financial market confidence could also be affected.

The second strength is clarity of ownership and control. The FY2025 annual report states that Henan SASAC holds 100% ownership and 100% voting rights. Government ownership alone does not create sufficient credit strength, but in HNYUZI’s case, ownership is combined with policy mandates, evidence of support, and a role in the financial system.

The third strength is identifiable support and funding access. The 2024 capital injection, government special-purpose funds, government subsidies, and FY2025 government subsidies and deferred government subsidies are concrete evidence of the support relationship. The domestic AAA / Stable rating, bank credit lines, domestic bond issuance, and 2024 USD500mn offshore bond issuance also support refinancing channels.

The fourth strength is asset scale and diversity. The company holds long-term receivables, financial assets, funds, equities, guarantee and credit enhancement subsidiaries, project assets, and operating assets, and does not depend on a single business. These assets are not all highly liquid, but having multiple routes through policy, funding, and asset recovery is a credit positive.

The fifth strength is proximity to Henan’s financial resources. CCXI notes that Henan Province has financial institutions and financial platforms such as Zhongyuan Bank, Zhengzhou Bank, Central China Securities, Zhongyuan Asset, Henan Asset, 中豫担保, and 中豫信増. HNYUZI is positioned close to this provincial financial ecosystem and is more likely to be included in coordinated refinancing and risk management.

The sixth strength is a degree of portfolio optionality. The company holds listed shares, financial assets, investments, project assets, and real estate. These should be valued with substantial haircuts, but they may provide broader recovery, disposal, and collateral options than a platform holding only unfinished infrastructure or receivables from weaker local governments.

10. Key Credit Constraints

The largest constraint is weak standalone debt repayment capacity. FY2025 operating cash flow was only RMB0.53bn, equal to about 16% of total interest expense of RMB3.28bn. Net profit and profit attributable to shareholders of the parent were both negative. It is difficult to view the issuer as one that can repay debt from operating businesses alone.

The second constraint is debt scale and near-term maturities. CCXI-adjusted total debt was large at RMB182.42bn at end-2024 and RMB181.75bn in 1Q2025. The FY2025 annual report also shows large short-term borrowings, non-current liabilities due within one year, long-term borrowings, bonds payable, and long-term payables. The credit profile assumes that refinancing markets remain open.

The third constraint is liquidity quality. Of cash and bank balances of RMB27.14bn, RMB14.23bn was restricted. Cash and cash equivalents, which are closer to free cash, were RMB12.91bn, covering only about 34% of short-term borrowings and non-current liabilities due within one year. Headline cash is not enough to provide comfort.

The fourth constraint is the liquidity of long-term receivables and policy assets. FY2025 long-term receivables were RMB104.99bn and represented the single largest asset item. Repayment of affordable housing, government-purchased services, shantytown redevelopment, PPP, and regional projects depends on local fiscal resources, the land market, government settlement, and project progress. These assets are policy-important, but provide limited immediate liquidity under stress.

The fifth constraint is subsidiary and contingent liability risk. Palm Eco-Town’s losses, litigation, regulatory issues, and high asset-liability ratio are earnings and governance concerns. The guarantee and credit enhancement business is a revenue source in normal times, but may require loss absorption during downturns in the economic or credit cycle.

The sixth constraint is unverified offshore bond documentation. Even if support expectations are strong, security-specific recovery prospects cannot be assessed if the issuer, guarantor, guarantee registration, ranking, covenants, EOD, and remittance constraints for offshore bonds are unknown.

The seventh constraint is the broadening strategic scope. State capital operation, strategic emerging industries, technology commercialisation, and fund investments increase policy importance, but they also have long monetisation periods and may involve investments with policy objectives beyond financial returns. This reduces visibility on standalone cash flow.

11. Downside Scenarios and Monitoring Triggers

The first downside scenario is weakening support from Henan Province. If fiscal conditions deteriorate, government fund revenue weakens, the provincial refinancing environment deteriorates, the company’s policy status declines, or support is delayed, the support-inclusive credit view would change. For HNYUZI, policy status and support timing are more important than small increases or decreases in revenue.

The second downside scenario is refinancing pressure. Warning signals would include failed domestic bond issuance, contraction in bank credit lines, shortening of borrowing tenors, rising dependence on non-bank or non-standard funding, widening offshore spreads, and insufficient pre-funding before maturities. In particular, if free cash declines further relative to near-term debt and the coverage of the aggregate of short-term borrowings and non-current liabilities due within one year by cash and cash equivalents moves clearly below 30%, the liquidity view should be reassessed.

The third downside scenario is weaker recovery of long-term receivables and policy assets. If receivables become overdue, impairments increase, terms are modified, local governments or project companies delay payments, land transfer revenue remains weak, or settlement of government-purchased services is delayed, the company’s asset liquidity and refinancing credibility would decline.

The fourth downside scenario is subrogated repayments in guarantees and credit enhancement. If large subrogated repayments occur at 中豫担保 or 中豫信増 and expected recoveries or counter-guarantees are weak, this would affect capital, liquidity, and market confidence. The quality of guaranteed parties, counter-guarantees, and post-subrogation recoveries are more important than the guarantee balance itself.

The fifth downside scenario is expanded additional support for Palm Eco-Town. Additional losses, worsening litigation and arbitration, asset impairments, funding support to maintain listing status or process debt, or guarantee performance would pressure group earnings and liquidity.

The sixth downside scenario is valuation losses or weak exits in financial and fund assets. Equities, funds, and financial assets generate investment income and fair-value gains, but in a market downturn they may lead to valuation losses, additional capital contributions, and policy-driven loss absorption. Particular caution is needed if investment income depends on one-off disposal gains and recurring income such as dividends and interest is weak.

Conditions for improvement in the credit view include clearer evidence of support, lower short-term debt pressure, increased free cash, sustained improvement in operating cash flow, reduced Palm Eco-Town-related losses, progress in long-term receivables recovery, lower guarantee exposure, and disclosure of a detailed maturity ladder. Conversely, failed or shortened domestic bond and bank refinancing, deterioration in free cash relative to near-term debt, guarantee subrogation, additional funding support for Palm Eco-Town, and weaker government support signals are priority reassessment triggers.

12. Credit View and Monitoring Focus

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.

13. Short Summary & Conclusion

Zhongyuan Yuzi Investment Holding is not a standalone operating company that repays debt autonomously, but an issuer supported by support expectations as a Henan provincial-level GRE and state capital operation platform. Henan SASAC’s 100% ownership, policy importance, domestic AAA rating, and track record of government subsidies, capital injections, and special-purpose funds are strengths. However, standalone credit quality is weak because of the FY2025 loss, weak operating cash flow, restricted cash, high debt, long-term policy receivables, and guarantee and Palm Eco-Town risks. The support-inclusive view is stable for now, but refinancing access, free liquidity, long-term receivables recovery, guarantee subrogation, additional support for Palm Eco-Town, and confirmation of offshore bond documentation are the main monitoring items.

Sources

• Shanghai Clearing House, 中原豫资投资控股集团有限公司2025年度报告, published 2026-04-30.
• CCXI, 中原豫资投资控股集团有限公司2025年度跟踪评级报告, dated 2025-06-23.
• Zhongyuan Yuzi Investment Holding Group official website, company profile page, checked 2026-05-22.
• Zhongyuan Yuzi Investment Holding Group official website, 喜报！热烈祝贺中原豫资投资控股集团2024年首期5亿美元境外债发行圆满成功, published 2024-06-14.

Unresolved Items and Limits of Analysis

• The offering circular / final terms for the offshore bond have not been reviewed, and the issuer, guarantor, guarantee registration, ranking, covenants, events of default, governing law, and remittance constraints need to be verified.
• Primary sources and full reports for international ratings from Fitch or other agencies have not been obtained, and this report does not use international rating levels as a basis for credit assessment.
• Live bond prices, yields, OAS, CDS, and same-maturity peer spreads have not been checked.
• A full 2026-2028 maturity ladder has not been prepared, and bank loans, domestic bonds, private placement bonds, non-bank borrowings, offshore bonds, and put / call terms need to be verified.
• The counterparty-level ageing, overdues, collateral, land transfer recoveries, and government settlement schedule for long-term receivables cannot be sufficiently verified from public materials alone.
• The latest earnings, litigation, guarantees, and funding support related to Palm Eco-Town should be rechecked against the latest listed-company disclosures before any security-specific investment decision.