HONG KONG, April 28, 2026. CSPI Ratings has assigned the global scale long-term issuer credit rating (LTICR) of ‘BBB’ to Emeishan Modern Agricultural Development Group Co., Ltd. (EMADG, the Issuer), with a stable outlook. We have also assigned issuance rating of ‘A+’ to the 7.0% USD40 million offshore bonds due on March 20, 2028, issued by EMADG, unconditionally and irrevocably guaranteed by Sichuan Development Financing Guarantee Co., Ltd. (the Guarantor); and 7.0% USD40 million offshore bonds due on April 24, 2028, issued by EMADG, unconditionally and irrevocably guaranteed byTianfu Bond Insurance Co., Ltd. (the Guarantor). The outlook is stable.
The Bonds will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer, and shall at all times rank pari passu and without any preference among themselves. The obligations of the Guarantor under the guarantee shall, save for such exceptions as may be provided by applicable laws and regulations and subject to the terms and conditions of the bonds, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.
EMADG is a key entity responsible for infrastructure and indemnificatory housing construction in Emeishan city. It is mainly engaged in the development of infrastructure and indemnificatory housing projects related to rural revitalisation within Emeishan’s administrative area, as well as the construction of cultural tourism, medical and educational infrastructure, excluding the southern district. In addition, EMADG also operates commodity sales and house leasing business lines. EMADG’s issuer credit rating is derived from a standalone credit profile (SACP) of ‘b-’ and our assessment that the local government has an extremely strong willingness to provide external support to the company in the event of financial distress.
KEY RATING RATIONALES
Credit Strengths
Core entity for regional engineering construction. As one of the most critical state-owned enterprises in the region, EMADG is primarily engaged in the construction of rural revitalisation-oriented infrastructure and affordable housing within Emeishan city, alongside cultural tourism, medical and educational infrastructure projects covering areas excluding the southern district. EMADG also runs businesses such as commodity sales and property leasing. EMADG plays a vital role in advancing local infrastructure development for rural revitalisation and the construction of affordable housing. In addition, EMADG has developed market-oriented businesses, including agricultural product trading. EMADG’s functional positioning in rural revitalisation and agricultural development is highly aligned with the competitive industries of Emeishan city, underpinning its lasting significance in driving local economic growth. We believe that the local government will take necessary measures to ensure its sustainable development in the event of operational difficulties, providing essential support during financial challenges to avoid any adverse impact on regional economic growth.
Sustained and strong support from the Emeishan city government. Emeishan Municipal State-owned Assets Supervision and Administration Bureau wholly owns EMADG. Over the past few years, EMADG has received strong, ongoing support from the local government, including capital injections, asset allocation, and fiscal subsidies. From 2022 to 2024, it received government subsidies of RMB68.4 million, RMB195.1 million and RMB188.3 million, respectively, which substantially boosted its profitability. The local government has also strengthened EMADG’s capital base through capital increase, equity injection and debt restructuring fund transfer. As of the end of September 2025, the company’s paid-in capital and capital reserve rose by RMB200.0 million and RMB905.6 million compared with the end of the previous year. In addition, the core senior management of the company is appointed and assessed by the local government. The government has authorised Emeishan New Development & Investment Group Co., Ltd. to exercise unified administration over key local state-owned enterprises, including EMADG. Overall, the Emeishan city government maintains high-level control and substantial influence over the company, providing solid fundamental support for its sustainable operation and development.
Sound economic fundamentals and stable credit profiles of Leshan city and Emeishan city. Leshan is a core city of the Chengdu-Chongqing Urban Agglomeration in the Chengdu Plain. Its pillar economy relies on non-metallic mineral products such as cement, glass and new building materials, alongside a full photovoltaic industrial chain from silicon materials to modules. In 2025, Leshan’s regional GDP reached RMB250.2 billion, up 3.1% year on year. As a county-level city administered by Leshan, Emeishan is located in southern Sichuan with a profound cultural heritage and rich tourism resources. It has three leading industries: cultural tourism & wellness, food & beverage, and green materials. In 2025, Emeishan’s regional GDP stood at RMB43.5 billion, rising 6.6% year on year with robust economic growth. Its per capita GDP was about RMB105.0 thousand in 2025, reflecting a sound economic development level. From 2023 to 2025, Leshan’s overall fiscal revenue grew at an average annual rate of 4.8%, showing strong growth resilience. Its average budget balance to revenue ratio was -18.7%, with stable fiscal balance capacity. Emeishan has maintained sound fiscal operations and mild deficit pressure, with a three-year average budget balance to revenue ratio of -0.7% during 2022–2024. Driven by higher land transfer expenditures, the ratio fell to -26.9% in 2025. Still, Emeishan’s overall liquidity is expected to remain healthy in the long term.
Credit Weaknesses
Financial leverage is relatively high and growing rapidly. From 2023 to 2024, EMADG's gross debt-to-capitalisation ratios were 35.5% and 43.6%, respectively, showing a rapid upward trend; as of the end of 2024, the company's total interest-bearing debt reached RMB5.3 billion. Given EMADG’s ongoing capital expenditure needs, its debt scale is expected to expand in the coming years, with the debt-to-capitalisation ratio likely to stay above 46%. EMADG’s EBITDA remains relatively limited relative to its debt size. Based on estimates, the weighted average debt-to-EBITDA ratio for 2023-2027 is 38.9x, and the EBITDA interest coverage ratio is 0.7x. Overall, EMADG’s leverage ratio is expected to remain elevated in the coming years, which may exert certain pressure on the stability of its cash flow and its solvency.
Operating efficiency is mediocre, and the return on capital is relatively weak. Influenced by its industry and business model, EMADG’s operating efficiency is on the low side. In 2024, the company’s accounts receivable turnover days and inventory turnover days were 941.6 days and 2,699.2 days, respectively, resulting in a lengthy cash conversion cycle. The company's inventory primarily consists of development costs incurred by engineering construction projects. Since such businesses involve long construction and investment return periods, the company’s capital turnover efficiency is low. This prolonged capital turnover cycle puts pressure on operating cash flow, making its ability to service debt relatively weak. We estimate that the company’s weighted average return on capital (ROIC) for 2023–2027 will be approximately 1.8%, reflecting a profitability level that is significantly low relative to the scale of capital investment. Therefore, continuous attention should be paid to the EMADG’s business transformation and earnings performance of self-operated projects going forward.
RATING OUTLOOK
The rating outlook is stable, which reflects our expectation that the credit profile of the Emeishan city government will remain stable and that EMADG will be able to maintain its strategic role in the development of Emeishan city going forward.
We would consider a rating downgrade to the issuer rating if 1) EMADG's ties with the Emeishan city government loosen from the current level; 2) Emeishan’s economic strength weakens, fiscal deficit rises considerably, or its liquidity position deteriorates significantly; and/or 3) EMADG’s business connection with the Emeishan city government weakens, and its market position in Emeishan city declines significantly.
We would consider a rating upgrade to the issuer rating if 1) Emeishan’s debt burden decreases significantly, or its budget revenue growth rises notably, and budget revenue scale expands substantially; and/or 2) EMADG’s importance to the Emeishan city government increases significantly.
ANALYSTS CONTACT
Primary Analyst
Jameson Zuo
+852 3615 8341
Secondary Analyst
Sherlock Liang
+86 755 2348 3690
sherlock.liang@cspi-ratings.com
Committee Chair
Larissa Wu
+852 3615 8317
MEDIA CONTACT
RATING SERVICE CONTACT
Date of Relevant Rating Committee: 20 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)
Corporate Issuance Rating Criteria (11 March 2022)
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