S&P turns eHi Car view to negative

S&P said it changed the outlook for eHi Car Services Ltd. to negative from stable but affirmed the B+ ratings on the firm and its senior notes.

“We see a higher risk of pandemic-related disruptions for eHi in 2022.The company's fleet utilization rate and average daily net revenue per available car (RevPAC) were hit by Covid-19 flareups and car acquisitions. The omicron variant of Covid-19 has made operating conditions in China more challenging and unpredictable, given that the variant is significantly more infectious than previous variants,” the agency said in a press release.

S&P noted China enforces a zero-Covid-19 policy. “This means an outbreak will trigger aggressive administrative measures, including requirements to stay in place and quarantine across the community. This can seriously dampen people's desire to travel as we saw in the third quarter of 2021.”

The agency said it does forecast eHi’s EBIT interest coverage ratio will probably improve slowly to 1.1x in 2023.

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