HONG KONG, May 13, 2026. CSPI Ratings has affirmed the global scale long-term issuer credit rating (LTICR) of ‘BBB-’ to Zhangzhou Yuanxin Investment Co., Ltd. (ZYXI, the company), with a stable outlook.
The company operates as the industrial investment and urban operation entity under Zhangzhou Yuanxin Construction Group Co., Ltd. ("Yuanxin Construction"), focusing on regional industrial investment and related asset management. Yuanxin Construction holds 100% equity of the company. ZYXI’s actual controller is the Finance Bureau of Zhangzhou High-tech Industrial Development Zone (“ZHIDZ Finance Bureau”). ZYXI’s issuer credit rating is based on a standalone credit profile (SACP) of ‘b-’ and our assessment that ZHIDZ government has extremely strong willingness to provide external support to the company in the event of financial distress.
KEY RATING RATIONALES
Credit Strengths
Sustained and robust support from the ZHIDZ government.
ZYXI is wholly owned by Yuanxin Construction, which is fully held by the ZHIDZ Finance Bureau, its ultimate controller.
ZYXI has historically benefited from robust support by the ZHIDZ government, particularly through asset transfers and capital contributions. In 2023–2024, the ZHIDZ government made gratuitous asset transfers to the Company, raising its capital surplus by CNY 2.5 billion, together with a shareholder capital injection of CNY 140.0 million in the reporting period, which substantially reinforced the Company’s capital position. In 2025, Yuanxin Construction, the controlling shareholder, continued to inject cash capital of CNY 450 million into the Company. Given the Company’s critical role in driving industrial investment, asset operations, and engineering construction within ZHIDZ, and its strategic alignment with regional development priorities, the ZHIDZ government is expected to maintain necessary support as the Company continues to execute its operational mandate.
Stable credit profile of the ZHIDZ government. ZHIDZ is one of the four key economic growth engines of Zhangzhou City. Leveraging advantages such as abundant land resources and proximity to the main urban area, the zone has been promoting the construction of “three major areas” in recent years, driving strong industrial development momentum and robust economic growth. Although the budgetary revenue scale of ZHIDZ is relatively small, the government has managed fiscal balance effectively in recent years, and it is likely that budget surpluses will remain at a favourable level in the future. While the debt pressure of ZHIDZ poses a significant burden on its fiscal revenue, and we estimate that its fiscal deposit scale is relatively limited, the strong budget surplus indicates a robust liquidity coverage ratio, suggesting overall sound liquidity conditions.
Credit Weaknesses
Relatively high financial leverage and low liquidity. As ZYXI continues to undertake core responsibilities for regional industrial investment and relevant asset operation businesses, it will maintain substantial capital funding requirements, which will necessitate continued debt expansion in the medium term. However, with the steady advancement of its market-oriented businesses, enhanced internal capital generation capacity, and the diversification of financing channels, the pace of debt growth is likely to moderate. Overall, during 2025–2027, the company’s Debt/EBITDA ratio is projected to remain around 25.0x.
Despite the notable improvement in leverage metrics compared with historical levels, the company’s elevated leverage position will keep exerting substantial financial pressure on its operations.
In terms of liquidity, taking into account its undrawn bank credit facilities as well as projected future cash inflows and outflows, the cash flow liquidity ratio is likely to remain below 1.0x over the next 24 months, indicating sustained tight overall liquidity conditions.
Low Profit Contribution and Working Capital Cycle Mismatch of the Trading Business. ZYXI’s trading business is confronted with persistent pressures on profitability and capital turnover. For the period from 2023 to 2027, revenue generated by the trading segment is projected to account for more than 90% of the company’s total revenue, while its gross margin will remain below 0.5%, reflecting the inherently weak profit-generating capacity of its business model.
Meanwhile, mismatched procurement and sales settlement arrangements between upstream suppliers and downstream customers have resulted in sustained working capital advance pressures for the company’s operations. Such persistent capital occupation will further constrain ZYXI’s cash flow turnover efficiency, and its profitability quality remains highly dependent on the timely collection of accounts receivable. We will continue to monitor relevant risk factors, including the stability of cooperation with core customers, accounts receivable collection progress, and adjustments to supplier settlement policies.
Challenges to income generation and market-oriented operational efficiency for certain injected assets. A portion of assets integrated into ZYXI includes infrastructure and public service facilities designed to support regional development. Due to their functional nature, these projects typically exhibit long payback periods and relatively low operating returns. Risks such as future regional planning adjustments, shifts in government support policies, or delays in development timelines could adversely affect the asset profitability and capital turnover efficiency of ZYXI. While the company has enhanced its operational self-sufficiency through measures like expanding market-oriented operations and optimizing asset portfolios, the proportionate weighting of such assets in total holdings necessitates ongoing monitoring of their long-term implications on overall financial performance.
RATING OUTLOOK
The Stable rating outlook reflects our expectation that the ZHIDZ government will maintain a stable credit profile and that the company is expected to continue to receive significant external support from the ZHIDZ government.
We would consider a rating downgrade if 1) ZYXI’s ties with ZHIDZ government loosen from current level; 2) the economic strength and fiscal capacity of ZHIDZ decline significantly; and/or 3) ZYXI’s market position in ZHIDZ declines significantly.
We would consider a rating upgrade if 1) ZYXI’s importance to the ZHIDZ government increases significantly; 2) the fiscal revenue scale of the ZHIDZ government has significantly increased, with a notable improvement in liquidity conditions and a substantial reduction in debt pressure; and /or 3) there is substantial improvement in ZYXI’s leverage and financial profile.
ANALYSTS CONTACT
Primary Analyst
Elka Zhou
+852 3615 8307
Secondary Analyst
Siqi Lin
+86 755 8321 0225
siqi.lin@cspi-ratings.com
Committee Chair
Winnie Guo
+852 36158344
MEDIA CONTACT
RATING SERVICE CONTACT
Date of Relevant Rating Committee: 30 April 2026
Additional information is available on www.cspi-ratings.com
Related Criteria
General Corporate Rating Criteria (15 March 2018)
Corporate Financial Adjustments and Ratio Definitions (7 May 2018)
Government-Related Entities Rating Criteria (31 August 2018)
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