S&P alters China Hongqiao view to stable

S&P said it changed the outlook for China Hongqiao Group Ltd. to stable from positive and affirmed its B+ rating.

“We revised our outlook because the Covid-19 pandemic and tough economic conditions globally have cast a shadow on aluminum demand and price. We expect the company's average selling price of aluminum to decline 6.3% by Chinese renminbi (RMB) 800 per ton in 2020 and sales volume to drop by 6%,” said S&P in a press release.

“This will push China Hongqiao's ratio of funds from operations (FFO) to debt down toward 20% in 2020. We expect aluminum prices to revive in 2021 on likely recovered economic conditions both in China and globally, and lead to an improvement in the ratio to close to 30%,” the agency said.

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