Standard & Poor’s downgrades China Shanshui Cement, China

Standard & Poor’s downgrades China Shanshui Cement, China
Published: 02 August 2013


Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on China-based cement producer China Shanshui Cement Group Ltd to 'BB-' from 'BB' due to a weakening of the company’s financial strength against a backdrop of challenging operating conditions. The outlook is negative.

The agency also downgraded the company's outstanding senior unsecured notes to 'B+' from'BB-'. At the same time, S&P lowered its long-term Greater China regional scale rating on Shanshui to 'cnBB' from 'cnBB+' and on the notes to 'cnBB-' from 'cnBB'.

S&P anticipates that Shanshui's financial performance in the first half of 2013 will be significantly below our expectation, and it does not forecast any material improvement over the next 12 months.

The credit rating firm believes Shanshui's pricing power in the company's core market of Shandong is weakening because of rising competition amid softening demand.

S&P expects Shanshui to continue its aggressive debt-funded growth in selected regions to enhance its market share and consolidate its presence in core markets.