HONG KONG, April 20, 2026. CSPI Ratings has assigned the global scale long-term issuer credit rating (LTICR) of ‘BBB-’ to Zhangzhou Tianyuan Culture and Tourism Co., Ltd. (ZTCT, the company), with a stable outlook.
ZTCT is a state-owned enterprise wholly funded by the Finance Bureau of Zhangzhou High-tech Industrial Development Zone (ZHIDZ). It focuses on the development and operational management of cultural and tourism resources within the region. The company's core future businesses will encompass leisure tourism, tourism development planning, industrial park management, and the construction of educational tourism bases, with plans to gradually expand into areas such as cultural media, promotional planning, and cultural and sports events. ZTCT’s issuer credit rating is derived from a standalone credit profile (SACP) of ‘b-’ and our assessment that the ZHIDZ government has an extremely strong willingness to provide external support to the company in the event of financial distress.
KEY RATING RATIONALES
Credit Strengths
A Company with a Clear Strategic Mandate and Strong Government Support. ZTCT was established on November 3, 2025, and is the key entity focused on comprehensive cultural and tourism development and operational management built by ZHIDZ. The company is tasked with advancing the health and wellness cultural tourism industry in the region and undertaking important resource projects such as “Longjiang Suiyue”. The ZHIDZ government has provided substantial support to the company in terms of asset injections. In January 2026, the ZHIDZ government transferred, free of charge, operating rights assets (such as under-forest economy of commercial forests, river beach lands, parking lots, and advertising boards) and physical assets (including health centre premises and reservoirs) to the company. This increased the company's capital reserve by approximately RMB1.5 billion, significantly enhancing its capital strength. We expect the government will have strong willingness to continue providing support as the company’s business progresses.
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
Substantial capital investment need in the short term will lead to a gradual increase in leverage. ZTCT is in its early development stage, and its overall debt scale is currently small. As the company's business progresses, its planned projects will require significant capital investment. We expect that the scale of the company's interest-bearing debt will rise notably in the short term. We forecast the company's gross debt/total capitalisation ratios for 2026-2028 to be 21.4%, 27.0%, and 31.2% respectively. While these levels remain moderate, the year-on-year trend is upward. Although EBITDA is expected to grow as ZTCT’s operations mature, it is still insufficient to cover debt servicing. The company's weighted average debt/EBITDA ratio for 2026-2028 is estimated at 16.6x.
Weak return on assets and low profitability levels. Currently, ZTCT’s revenue mainly comes from trade and asset leasing businesses. The trade business has a very low gross margin and incurred a small loss in 2025. The asset leasing business relies on various operating rights and assets transferred by the government, some of which are idle, leading to significant uncertainty regarding future leasing conditions. We calculate the company's weighted average return on invested capital (ROIC) for 2026-2028 to be 1.0%, reflecting its overall weak profitability.
Poor liquidity ratio indicators. After considering the quick ratio and cash flow liquidity ratio, we assess the company’s short-term liquidity as “Vulnerable”. The estimated cash flow liquidity ratio for the next 12 months (2027) is 0.38x, indicating that cash inflows are insufficient to cover cash outflows. Additionally, the quick ratio for the next 12 months is low, estimated at 0.88x for 2027, suggesting pressure on its short-term assets in fulfilling short-term liabilities. As of the end of March 2026, the company's available bank credit lines have been fully utilised. Going forward, the company will need to rely on obtaining new bank credit facilities for external financing.
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) ZTCT’s ties with ZHIDZ government loosen from current level; 2) the economic strength and fiscal capacity of ZHIDZ decline significantly; and/or 3) ZTCT’s market position in ZHIDZ declines significantly.
We would consider a rating upgrade if 1) ZTCT’s importance to the ZHIDZ government increases significantly; 2) liquidity in ZHIDZ has improved considerably with a notable easing of debt pressures, or a substantial expansion in budget revenues; and /or 3) there is substantial improvement in ZTCT’s leverage and financial profile.
ANALYSTS CONTACT
Primary Analyst
Elka Zhou
+852 3615 8307
Secondary Analyst
Leon Li
+86 755 2348 3667
leon.li@cspi-ratings.com
Committee Chair
Larissa Wu
+852 3615 8317
MEDIA CONTACT
RATING SERVICE CONTACT
Date of Relevant Rating Committee: 17 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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