'A-' Rating to Shougang Group Co., Ltd.; Outlook Stable

Corporate China

Pengyuan International Assigns ‘A-’ Rating to Shougang Group Co., Ltd.; Outlook Stable

Ratings Overview

Issuer Rating ▪ Pengyuan International has assigned its first-time global scale long-term LT Issuer Credit Rating A- issuer credit rating (LTICR) of ‘A-’ to Shougang Group Co., Ltd. (Shougang). The outlook is stable. Outlook Stable ▪ Shougang is the sixth largest steel producer in China and the tenth largest

steel producer in the world, measured by crude steel production. Shougang’s issuer credit rating is based on a ‘b+’ standalone credit profile and our assessment that the Beijing government will provide strong support for the Contents Company in the event of a financial distress. Shougang takes the leading role as a diversified public-service provider in accordance with the coordinated development strategy of Beijing-Tianjin-Hebei (Jingjinji), the biggest Key Rating Drivers ...... 2 urbanised megalopolis region in North China with strong backing from the Business Profile ...... 3 Beijing government. The rating of the Company is constrained by its high leverage due to ongoing capex needs. Financial Profile ...... 5 Government Support ...... 6 Rating Outlook Liquidity...... 7 ▪ The stable outlook reflects our view that the Company’s operations will remain Company Background ...... 7 stable amid the recovery of China’s economy. The stable outlook on Peer comparison ...... 7 Shougang also reflects a similar outlook on the Beijing government and our expectations that the Beijing government’s willingness to support the Rating Scores Summary ...... 9 Company in the event of financial distress remains unchanged. Related Criteria ...... 9 ▪ We would consider a rating downgrade if 1) substantial evidence shows that the Beijing government’s willingness to support the Company weakens; 2) we downgrade our credit rating of the Beijing government.

▪ We would consider a rating upgrade if we upgrade our credit rating of the Beijing government, given that there is no material change in the Beijing government’s willingness to support.

Contacts Financial Summary

Primary Analyst Table 1: Financial Ratios 2018A 2019A 2020F 2021F 2022F Name Winnie Guo Title Director Debt/EBITDA 12.1x 10.3x 12.8x 12.1x 11.3x Direct +852 3615 8344 EBITDA Interest Coverage 1.5x 1.7x 1.4x 1.6x 1.7x Email [email protected] Gross Debt/Capitalisation 70.8% 73.3% 74.0% 74.4% 74.8%

Secondary Analyst FFO/Debt 4.1% 5.8% 3.2% 3.2% 3.2% OCF/Debt 2.4% -3.0% -0.7% 0.1% 0.0% Name Leon Li FCF/Debt -4.3% -7.1% -5.2% -3.0% -2.8% Title Analyst Direct +86 755 2348 3867 EBITDA Margin 9.5% 11.7% 10.2% 10.8% 11.4% Email [email protected] ROIC 3.8% 2.1% 2.1% 2.7% 3.2%

Sources: Company, Pengyuan International’s estimates

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Key Rating Drivers

Credit Strengths Strong support from the Beijing government. Wholly owned by the Beijing State-Owned Capital Operation and Management Centre （BSCOMC） and ultimately controlled by the Beijing SASAC, Shougang has a strong linkage to the Beijing government. The Beijing government controls the board and senior management appointment, and has provided capital injection and subsidies over the past few years. Shougang has taken the lead in serving as a diversified public-service provider based on the coordinated development strategy of Beijing-Tianjin-Hebei (Jingjinji) region, undertaking the construction of state-level projects of New Shougang Beijing and Caofeidian economic zone. We expect the Company to continuously receive government support, in the forms of industrial investment fund injection, subsidies and direct capital injection, in light of the importance of the projects to the state.

High business diversification. Shougang has a better business diversification compared to the other steel producers in China, with non-steel related businesses contributed 27% to its revenue in 2019. We expect the Company to further diversify into non-steel related businesses in the next three years, including city infrastructure, real estate and financial service. We expect Shougang’s non-steel related businesses to generate synergies with its core business, which will continue to enhance its competitiveness. In addition, by increasing its business diversification, Shougang has diversified its cash flow and reduced its exposure to the Chinese steel industry’s cyclicality.

Profitability to improve. We expect Shougang’s revenue to grow at 6.1% and 5.5% in 2021 and 2022 respectively, with EBITDA margin improving to 11.4% in 2022 from 10.2% in 2020, buoyed by the Company’s expanded steel production capacity, improving utilisation and higher prices in steel products. We expect Shougang’s capacity utilisation to increase to 80% in 2022 from 74% in 2019 with the ramp-up of its new capacity in Jingtang production base. Shougang’s steel production capacity increased to 38.4 million tonnes in 2019 from 35.3 million tonnes in 2018, driven by the completion of the one-step project of the second phase of Jingtang Iron & Steel.

China steel demand to pick up. We expect China’s economic recovery to continue to support the recovery of steel industry. Infrastructure and real estate investments are expected to remain robust in 2021, thanks to the economic stimulus backed by the government. In addition, the demand of steel products for automobile and home appliance manufacturing is expected to pick up as domestic consumption increases. We expect Shougang’s cash flows to improve amid the industry recovery.

Credit Weaknesses

High leverage driven by ongoing capex needs. We expect Shougang’s leverage to remain high due to its coming debt redemption requirements and ongoing capex needs in the next two to three years. We expect the Company’s capex to remain high in 2021 and 2022, driven by its committed investment in mining, real estate and industrial park projects.

Project investment risks. In our view, Shougang’s investment risks have arisen with its ongoing investments in new projects. The projects of New Shougang Beijing and Caofeidian economic zone have long investment cash cycle and uncertain payoffs, which might influence the profitability and cash flows of the Company.

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Table 2: Key Credit Metrics (RMB million) 2018A 2019A 2020F 2021F 2022F Financials and Profitability Revenue 205,742 202,235 198,403 210,495 222,028 EBITDA 19,638 23,591 20,310 22,642 25,252 EBITDA margin 9.5% 11.7% 10.2% 10.8% 11.4% Return on assets (ROA) 2.4% 2.5% 2.5% 3.0% 3.5% Return on invested capital (ROIC) 3.8% 2.1% 2.1% 2.7% 3.2% Cash Flow Measures Funds from operations (FFO) 9,711 14,185 8,398 8,727 9,132 Operating cash flows (OCF) 5,675 -7,225 -1,782 153 95 Free cash flow (FCF) -10,286 -17,276 -13,587 -8,168 -7,880 Discretionary cash flow (DCF) -10,411 -17,713 -13,804 -8,392 -8,131 Capital expenditure 15,961 10,052 11,805 8,321 7,976 Balance Sheet Measures Cash and liquid investments 46,965 54,256 51,566 52,781 59,369 Excess cash 32,577 41,760 39,114 40,037 46,361 Total debt 270,328 285,042 300,048 313,908 331,007 Adjusted debt 237,751 243,282 260,933 273,871 284,646 Total capitalization 381,634 388,635 405,222 421,838 442,487 Leverage Measures Debt/EBITDA 12.1x 10.3x 12.8x 12.1x 11.3x EBITDA/Interest expense 1.5x 1.7x 1.4x 1.6x 1.7x Gross debt/Capitalization 70.8% 73.3% 74.1% 74.4% 74.8% OCF/Debt 4.1% 5.8% 3.2% 3.2% 3.2% FCF/Debt 2.4% -3.0% -0.7% 0.1% 0.0% FFO/Debt -4.3% -7.1% -5.2% -3.0% -2.8% DCF/Debt -4.4% -7.3% -5.3% -3.1% -2.9% Debt/Equity 214% 235% 248% 254% 255% FFO/Cash interest expense 0.8x 1.1x 0.6x 0.6x 0.6x * EBITDA and EBITDA margin include cash dividends from equity investment Sources: Company, Pengyuan International’s estimates Business Profile

Revenue to increase thanks to better production efficiencies

Shougang is the sixth largest steel manufacturer in China with a steel production capacity of over 30 million tonnes. The Company’s key products include hot-rolling coils, cold-rolling coils, electric steel, heavy plates and long steel products.

We expect the Company’s revenue to increase, driven by the upgrade and expansion of the capacities in the recent years. The production capacity of steel products increased to 38.4 million tonnes, as the Jingtang project initiated its pilot production after completion of construction in 2019. With the new capacity ramp-up, we expect Shougang’s capacity utilisation to increase to 80% in 2022 from 74% in 2019.

Through production sites relocation and restructuring over the past decade, Shougang has optimised and upgraded its iron and steel capacity and extended its production capacity layout to coastal and resource-enriched areas. Meanwhile, the Company has shifted its product mix to more competitive products, such as high-end long sheet steel products.

Exhibit 1: Capacity and utilisation Exhibit 2: Shougang is the tenth largest steel producer worldwide (2019)

Million tonnes % Shougang Group 29 45 75.2 76 38.4 Tata Steel Group 30 40 36.1 35.3 75 35 75 Jianlong Group 31 28.4 30 26.2 26.5 74 Ansteel Group 39 25 74 Shagang Group 41 73.8 20 73 POSCO 43 15 72.5 73 HBIS Group 47 10 72 Nippon Steel Corporation 52 5 72 China Baowu Group 95 0 71 ArcelorMittal 2017 2018 2019 97 Steel production capacity Steel production 0 50 100 150 Capacity utilisation (RHS) Million tonnes Sources: Company, Pengyuan International Sources: Worldsteel Association, Pengyuan International

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Non-steel related businesses continue to expand

Shougang has a high degree of business diversity among steel producers in China, characterised by a relatively crucial level of non-steel related business contribution. In 2019, steel business as the major driver contributed 58.4% to the Company’s revenue, while mining resource business made up 14.4%, and the remaining 27.2% came from other non-steel related businesses.

We expect the Company to continue to expand its non-core businesses to reduce the exposure to the steel industry’s cyclicality. The Company has been actively participating in non-steel businesses, which include urban comprehensive service, real estate and financial service. Its non-core businesses are expected to bring in synergies and in turn, improve competitiveness in Shougang’s core business.

Exhibit 3: Revenue breakdown (2019) Exhibit 4: Urban service business continues to grow

Other RMB billion Real Estate, Comprehensive 25 18% 3.9% Service, 10.3% 17% Financial 20 Service, 1.6% 16%

15 15% Urban Comprehensive 14% Service, 11.4% 10 13% Steel, 58.4% 12% 5 Mining 11% Resource, 14.4% 0 10% 2016 2017 2018 2019 Revenue Gross profit Gross margin (RHS) Sources: Company, Pengyuan International Sources: Company, Pengyuan International Urban service is gradually becoming the third revenue contributor for Shougang with about 11% compounded annual revenue growth and increasing gross margins between 2017 and 2019. The total amount of newly signed construction contracts and backlog on hand has been increasing year by year. The new contract and backlog totalled RMB10.82 billion and RMB10.12 billion at the end of 2019 respectively. In addition, New Shougang Beijing and Caofeidian development projects, which are considered as the extension of the Company’s urban service business, are still under construction. We believe the revenue proportion of urban comprehensive service business will increase substantially once the construction of these projects is completed and put into operation in the future.

Exhibit 5: Abundant construction contracts in hand Exhibit 6: High self-sufficiency of iron ore (2019)

RMB billion 12 10.8 Shandong Steel Group 7 10.1 10 HBIS Group 12 8.6 8.0 8.2 Bao Steel 20 8 6.9 Bengang Group 36 6

Shougang Group 54 4 Pangang Group 61 2 Ansteel Group 73 0 2017 2018 2019 0 10 20 30 40 50 60 70 80 New contracts Backlog % Sources: Company, Pengyuan International Sources: Company, Pengyuan International High self-sufficiency level of raw materials and effective cost management

The Company has relatively strong operating efficiency considering its high level of self-sufficiency of iron ore and effective cost management. After relocating its capacity, the major production sites of the Company are located in coastal areas or resource abundant regions, which helps to save the transportation cost. In addition, the Company owns 7 iron mines both in the domestic and overseas countries with a total iron resource reserve of about 3.5 billion tonnes. The iron ore self-sufficiency rate was at 48%, 51% and 54% in 2017, 2018 and 2019 respectively, which was high compared to the other domestic steel producers. High level of iron ore self-sufficiency indicates that the Company has a stronger control over material costs and less sensitivity to iron ore price volatility.

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Financial Profile

Leverage remains high with on-going capex needs

We expect Shougang’s Debt/EBITDA ratio to increase to 12.8x and EBITDA interest coverage to decrease to 1.4x in 2020, as the earnings of the Company slowed and profit margin came off due to the economic fallout caused by the coronavirus pandemic’s outbreak and soaring iron ore prices. We estimate its debt to EBITDA ratio to maintain within 10x-12x with marginal improvement during 2021-2022, mainly driven by an improvement in the EBITDA margin in view of the recovery of the steel business. We expect gross debt to continue to widen driven by the high debt redemption requirements between 2021 and 2023 and large investments for the Machen Mining, New Shougang Beijing and Caofeidian projects.

Shougang had seen a significant leverage reduction between 2016 and 2018 amid China’s supply side structural reform. In 2019, an increase of EBITDA offset the increase of gross debt, which realised in a rise of gross debt to capitalisation ratio and decline in the debt to EBITDA ratio. Despite its past effort in deleveraging, Shougang’s leverage level remained high with its gross debt to capitalisation ratio remained over 70% and its debt to EBITDA ratio remained over 10x since 2016.

Exhibit 7: Leverage level remains high Exhibit 8: Bond due repayment pressure remains high during 2021-2023

RMB billion 77% 20x 30 76% 18x

75% 16x 25 74% 14x 73% 12x 20 72% 10x 71% 8x 15 70% 6x 10 69% 4x 68% 2x 5 67% 0x 2016A 2017A 2018A 2019A 2020F 2021F 2022F 0 Gross debt/Capitalisation Debt/EBITDA (RHS) 2020 2021 2022 2023 2024 2025 2026

Sources: Company, Pengyuan International’s estimates Sources: Company, Pengyuan International’s estimates

Robust profitability

Shougang’s profitability is expected to remain robust in both 2021 and 2022, with an EBITDA margin of 10-12%. We expect the Company’s revenue from steel production to recover in anticipation of an increase of steel production volume and steel prices. We expect the steel capacity utilisation rate to increase to 80% in 2022 from 73.8% in 2019 and an annual compounded growth of steel price of 2.5% from 2020 to 2022.

The Company’s gross margin and EBITDA margin were relatively stable between 2017 and 2019 thanks to its diversified operation and high self-sufficiency rate of raw materials. We estimate the gross margin and EBITDA margin to drop to 11% and 10% respectively in 2020 as the high iron ore prices eroded the profitability. However, from 2020 onwards, we expect the profitability of the Company to recover gradually in anticipation of a rebound in the profitability of steel business as both steel production volume and steel prices increase, and an increase in the profitability of urban services business, driven by a rising number of projects under construction that are going to be implemented in the pipeline. However, we also note that the 2021 to 2022 EBITDA could be largely affected by the construction progress of the New Shougang Beijing and Caofeidian projects.

Shougang’s mining resource business revenue has been decreased since 2017, and we expect it to fall further over the next few years, based on our estimated figures of the external sale and internal use of iron ore, to take into account the Jingtang project, which is going to be put into production. Benefitting from the increase of iron ore price from 2019, the gross margin of the mining resource business increased substantially in 2019, but we expect it to reverse to contraction over the next two to three years due to the transition of external sale to internal use of its iron ore.

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Exhibit 9: Steel business is expected to pick up Exhibit 10: Mining resource business is expected to shrink

RMB billion RMB billion

140 14% 35 20% 18% 120 12% 30 16% 100 10% 25 14% 12% 80 8% 20 10% 60 6% 15 8%

40 4% 10 6% 4% 20 2% 5 2% 0 0% 0 0% 2016A 2017A 2018A 2019A 2020F 2021F 2022F 2016A 2017A 2018A 2019A 2020F 2021F 2022F Revenue Gross profit Gross margin (RHS) Revenue Gross profit Gross margin (RHS) Sources: Company, Pengyuan International’s estimates Sources: Company, Pengyuan International’s estimates

Urban service business is expected to grow in accordance with the Company’s new development strategy, which aims at realising the coordinated development between its steel business and urban integrated service business through a new capital operation platform. While we estimate the revenue growth and gross margin of urban service business to drop to 7% and 14.5% in 2020 due to the economic fallout caused by coronavirus pandemic’s outbreak, we continue to expect the growth and gross profit to maintain at around 15% and 17% respectively over the next two to three years, given abundant new construction contracts and contracts in hand.

Exhibit 11: Urban comprehensive service business continues to grow Exhibit 12: Profitability remains robust in recent years

RMB billion 14% 35 18% 12% 30 17% 16% 10% 25 15% 8% 20 14% 6% 15 13% 4% 10 12% 2% 5 11% 0% 0 10% 2017A 2018A 2019A 2020F 2021F 2022F 2016A 2017A 2018A 2019A 2020F 2021F 2022F Gross margin Adjusted EBITDA margin ROIC Revenue Gross profit Gross margin (RHS)

Sources: Company, Pengyuan International’s estimates Sources: Company, Pengyuan International’s estimates

Government Support

Shougang has a strong linkage to the Beijing government. We believe that the Beijing government has a very strong willingness to provide support to the Company in the event of financial distress.

• The Company is wholly owned by the BSCOMC and ultimately controlled by the Beijing SASAC. The Beijing government controls the board and senior management appointment. As the Company is the only pilot company of Beijing’s deepening reforms of state-owned enterprises, it plays a vital role in propelling local industrial upgrades and fuelling the city’s development. • There are proven track records of the government’s support to the Company’s transition to a diversified public-service provider in accordance with the regional development plan, in terms of industrial investment fund injection, subsidies and direct capital injection. • The Company is currently conducting two primary projects, namely New Shougang Beijing and Caofeidian development projects, which are considered the core parts of China’s Coordinated Development Plan for the Jingjinji region. A default by the Company would result in significant delays in these projects and affect Beijing and even the Jingjinji region’s economic development.

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Liquidity

In our view, the Company’s overall liquidity risk is low over the next 12 to 24 months, mainly credited to abundant banking facilities and positive funds from its operations. As of the end of June 2020, the Company was granted with total banking facilities of RMB538.4 billion, with unutilised banking facilities of RMB354.9 billion. The majority of banks with which the Company has business connections are mainly large state-owned banks, policy banks and large-scale joint-stock banks. We believe such banking facilities will remain in sight given the Company’s impact on the industry and against the backdrop of strong support from the government. We believe that the Company will hold a sufficient cash balance and banking facilities to cover its short-term debt balance over the next 12 to 24 months.

The following key assumptions were made when assessing the Company’s liquidity:

• Estimated cash and short-term investments of around RMB54.2 billion and RMB51.5 billion in FY2020 and FY2021. • Projected funds from operations to be about RMB8.3 billion and RMB8.7 billion in FY2020 and FY2021. • Projected net working capital changes of about RMB-8.2 billion and RMB-4.8 billion in FY2020 and FY2021. • Estimated short-term debt payment of around RMB138.5 billion and RMB143 billion in FY2020 and FY2021 • Estimated cash interest payment of about RMB14 billion and RMB14.2 billion during FY2020 and FY2021. Company Background

Established in 1919 and headquartered in Beijing, Shougang Group Co., Ltd is the sixth largest steel-producer in China. The Company is a state-owned enterprise wholly controlled by the Beijing SASAC. With the guidance of the Beijing government, the Company has been stepping into a transition phase to become a diversified public-service provider, which is part of the coordinated development plan of the Jingjinji Region. At present, the Company covers multiple sectors including steel producing, mining resource, urban comprehensive service, financial service, real estate, etc., with total assets worth around RMB498 billion in 2019. Peer comparison

Four domestic participants and two international participants were selected based on the consideration of similar operating scale and revenue to conduct a comparison with the Company. The companies selected are among the global top 10 steel producers. Baowu Group (A/Stable), HBIS Group, Jiangsu Shagang Group and Ansteel Group are among the companies selected within the Chinese domestic market. The two major competitors selected outside China are ArcelorMittal and Nippon Steel Corporation (NSC).

Table 3: Shougang Group’s peers

HBIS Group Co., Ltd is China’s largest supplier for home appliance steel, second largest for automotive steel and the leading steel supplier HBIS for marine engineering, bridges and construction. With revenue of RMB354.7 billion and total assets of RMB462.1 billion, HBIS has been on the Fortune Global 500 company list for 11 consecutive years and was ranked 214th in 2019. Jiangsu Shagang Group, whose headquarters is located in Zhangjiagang City, Jiangsu Province, is the largest private steel enterprise with Shagang the biggest electric arc furnace steel production base in China. Shagang Group ranks the 6th in the world’s top 10 steel-makers with a total asset of RMB290 billion. It has more than 40,000 employees, and an annual steel production capacity of over 40 million tonnes. Ansteel was originated from merger and reorganisation of Anshan Iron and Steel Group Corporation and Pangang Group Co., Ltd in May 2020. As one of the state-owned large-sized enterprises, Ansteel currently has 7 production bases with special characteristics in northeast, Ansteel southwest, north China, southeast and south China. Ansteel has rich iron ore resources in China’s Liaoning and Sichuan and Australia’s Karara. Ansteel is the steel enterprise with the most resource advantages in China. Baowu, headquartered in Shanghai city with multiple production bases all over China, is a world leading steel-maker that manufactures and distributes steel products. The company was formed by Baosteel Group, via an absorption of its smaller state-owned peer, Wuhan Iron and Steel Corporation in 2016. The company specialises in producing high value-added steel products with a wide range of production lines Baowu such as strip steels, steel plates, hot rolled steels, cold rolled steels, steel wires. Baowu conducts new materials, modern trade, industrial finance, and urban service businesses. After taking control of Magang Group Holding Co., in FY2019, Baowu’s crude steel production was amounted to 95.47 million tonnes and revenue reached USD79.48 billion, ranking as the second largest steel-producing company of the world. ArcelorMittal S.A. is a Luxembourgish multinational steel manufacturing corporation headquartered in Luxembourg City, with a presence in more than 60 countries and an industrial footprint in 18 countries. It was formed in 2006 via the takeover and merger of Arcelor by Indian- ArcelorMittal owned Mittal Steel. ArcelorMittal is the world's largest steel producer, with an annual crude steel production of 97.31 million tonnes as of 2019. It was ranked 120th in the 2019 Fortune Global 500 list of the world's largest corporations. Nippon Steel Corporation was formed in 2012 by the merger of the old Nippon Steel and Sumitomo Metal. The old Nippon Steel Corporation was established in 1970 by the merger of Fuji Iron & Steel and Yawata Iron & Steel. It operates through the following segments: steelmaking NSC and steel fabrication, engineering and construction, chemicals, new materials, and system solutions. Nippon Steel is the world's third largest steel producer in terms of volume as of 2019 with 51.68 million tonnes crude steel production. Sources: Companies, Pengyuan International

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Table 4: Peer comparison table (with indicators averaged from FY2017-2019) (RMB mn) HBIS Shagang Ansteel Baowu ArcelorMittal NSC Shougang Revenues 332,771 136,446 207,001 494,236 484,662 361,461 197,921 EBITDA 27,164 23,218 26,882 68,979 44,668 32,562 20,093 FFO 16,177 20,961 17,543 60,630 38,805 37,368 10,647 Cash and short-term investments 62,574 28,745 21,608 93,042 28,008 12,369 50,067 Debt 203,516 35,927 147,461 161,845 76,554 136,490 245,437 Equity 98,180 67,443 106,889 381,763 282,332 205,495 103,544 Debt/ EBITDA (x) 7.5x 1.6x 5.6x 2.4x 2.4x 4.2x 12.5x FFO/Debt 8.0% 62.6% 11.8% 37.8% 52.5% 27.5% 4.4% EBITDA interest coverage (x) 1.7x 11.2x 3.5x 7.5x 8.8x 24.0x 1.5x Gross Debt/Total Capitalization 71.5% 46.7% 60.0% 36.1% 24.1% 40.3% 73.2% EBITDA margin 8.2% 17.1% 13.0% 14.1% 9.2% 9.0% 10.1% ROIC 3.9% 26.3% 2.5% 11.4% 6.9% 1.4% 2.7% Receivable days 17.4 29.5 37.5 41.1 19.6 48.6 41.0 Inventory days 38.2 47.2 69.5 80.9 101.4 100.5 84.6 Payable days 50.1 69.1 84.4 73.5 73.4 95.7 119.6 Cash conversion cycle 5.4 7.6 22.6 48.5 47.6 53.5 6.0

Sources: Companies, Pengyuan International’s estimates

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Rating Scores Summary

Business Profile Moderate Industry and Operation Risk Profile Moderate Macroenvironment Risk Low Financial Profile ccc+ Preliminary Leverage Profile ccc+ Cash Flow Variations Neutral Debt Structure and Financial Policy Neutral Financial Volatility Neutral Investment Neutral Final Leverage Profile ccc+ Profitability Medium Indicative Credit Score (ICS) b+ Adjustment Factors Corporate Structure and Governance Neutral Liquidity Moderate Supplementary Analysis Neutral Standalone Credit Profile (SACP) b+ External Support Parental Support NA Government Support Very Strong Issuer Credit Rating (ICR) A- Note: ratings mentioned in this report are unsolicited rating.

Related Criteria

General Corporate Rating Criteria (15 March 2018)

Government-Related Entities Rating Criteria (31 August 2018)

Financial Adjustments and Ratio Definitions (07 May 2018)

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