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S&P revises Yuexiu Transport view to negative
S&P said it revised the outlook for Yuexiu Transport Infrastructure Ltd. to negative from stable but affirmed the company’s BBB- rating.
“We revised the outlook on YXT to negative to reflect the expected severe deterioration of the company's credit metrics in 2020 due to the new coronavirus outbreak in China. We forecast a 50% drop in revenue in 2020, given the combined impact of travel restrictions in Hubei province, the overall decline in economic activity since the Lunar New Year holiday, and the nationwide moratorium on toll collection. These factors will significantly affect YXT's financial performance in 2020,” said S&P in a press release.
S&P said it expects traffic recovery in Wuhan to lag other regions after the containment of the virus outbreak in the second half of 2020. As of the end-2019, YXT has five of its 10 consolidated toll road assets in Hubei, the epicenter of the outbreak. These five toll roads contribute to about 44% of the company's revenue.
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