Moody’s assigns Guangzhou Asset Baa3

Moody’s Investors Service said it assigned a Baa3 long-term foreign currency and local currency issuer ratings to Guangzhou Asset Management Co., Ltd. This is the first time Moody’s has assigned ratings to Guangzhou AMC. The outlook on Guangzhou AMC is stable.

Guangzhou AMC’s Baa3 long-term issuer rating incorporates the company’s standalone assessment of ba3, a notch uplift on the assumption of a high level of support from parent Guangzhou Yue Xiu Holdings Ltd. and a two-notch uplift based on the assumption of a high level of support from the Chinese government.

The company’s profitability is good, with its average return on assets at around 2% both for 2018 and the first nine months of 2019. The results were mainly driven by high returns from its distressed asset management business; and cheap funding, owing to its state-owned background.

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