Moody’s lowers Beijing Automotive view to negative

Moody’s Investors Service said it changed to negative from stable the outlook for Beijing Automotive Group Co., Ltd.’s (BAIC Group) A3 issuer rating, along with the A3 senior unsecured rating assigned to the bonds issued by BAIC Inalfa HK Investment Co., Ltd.

Moody’s also said it affirmed both ratings.

The outlook change reflects an expectation that the pace of the group’s de-leveraging will be slower than originally anticipated, given weaker than expected profitability at Beijing Hyundai Motor Co., Ltd and the group’s own brand business, Moody’s said.

BAIC Motor Corp. Ltd., which is the group’s 44.98%-owned subsidiary and represents the key profit contributor for the group, recently issued a profit warning, the agency said.

The company expects its net profit to fall by about 26.5% year-on-year for year-end 2015, Moody’s said.

Industry challenges also are expected to continue the company’s operations over the next several years, the agency said.

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