Moody's: China Automation view negative

Moody's Investors Service said it confirmed China Automation Group Ltd.'s Ba3 corporate family rating and senior bond rating, and the outlook is negative. This concludes the review for downgrade that began Nov. 30.

"The rating confirmation reflects our expectation that China Automation will likely benefit from China's resumption of investments in its railway infrastructure and the consideration that cash flow will improve in 2013 because of its better collection of receivables," Alan Gao, a Moody's vice president and senior analyst, said in an agency news release.

Moody's said the outlook is negative because of two key challenges: continued regulatory uncertainty and pressure on new product/project rollouts to support business growth in the medium to long term.

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