Moody's puts Kangde Xin on downgrade review

Moody's Investors Service said it placed Kangde Xin Composite Material Group Co., Ltd. (KDX)'s B1 corporate family rating on review for downgrade, along with Top Wise Excellence Enterprise Co., Ltd.'s backed B1 senior unsecured bond rating.

The downgrade review follows the continued trading suspension of KDX's shares and news of an investigation by the China Securities Regulatory Commission into potential information disclosure violations by the company and its two largest shareholders, Moody's explained.

The review reflects the uncertainty resulting from the continued suspension of trading in KDX's shares, the elevated share pledge ratio of its largest shareholder and the regulatory investigation, which will weaken the company's ability to access funding, the agency said.

Amid an increasingly challenging operating environment, a weakening in KDX's ability to refinance could reduce its cash buffer and increase liquidity risks, Moody's said.

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