XiangJiang Group rating affirmed at BBB with stable outlook

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XiangJiang Group BBB rating affirmed

Highlights

Fitch Ratings affirmed Hunan XiangJiang New Area Development Group's BBB rating with stable outlook, citing continued strong support from the Changsha municipal government.
Ownership shifted in September 2026 to Hunan Xiangjiang New Area Management Committee with a 92.8% stake, but Fitch expects no material change to governance or operations.
Fitch projects operating revenue dropping to CNY9.0 billion in 2026 before rebounding to CNY13.2 billion by 2030, with net adjusted debt rising from CNY67.0 billion in 2025 to CNY79.1 billion in 2030.

Support assessment and ownership change

As reported by Fitch Ratings, the agency has affirmed Hunan XiangJiang New Area Development Group Co., Ltd.'s long-term foreign- and local-currency Issuer Default Ratings at BBB, with a stable outlook, citing expected continued support from the Changsha municipal government.

Fitch says the rating reflects XiangJiang Group's unchanged policy role as a government-related entity responsible for primary land development, infrastructure construction and related investment in Xiangjiang New Area, a national-level district in Changsha. In September 2026, the company's controlling shareholder shifted from Changsha SASAC to Hunan Xiangjiang New Area Management Committee, which now holds 92.8% of the shares.

The agency assesses extraordinary government support as very likely if needed, with a support score of 30 out of 60 under its government-related entities criteria. It says the management committee already oversaw the company's operations under delegation from the Changsha government, and therefore does not expect the shareholding change to materially affect governance or day-to-day operations.

Fitch also points to a record of financial backing, including capital injections and operating subsidies. Paid-in capital rose by CNY16.5 billion over the past five years, equal to 40.1% of total paid-in capital at the end of 2025, while the government approved an increase in registered capital to CNY50 billion from CNY36 billion in September 2025, with further injections expected over the following five years.

Leverage outlook and market impact

XiangJiang Group remains strategically important to Changsha because it supports urban development in Xiangjiang New Area, which Fitch describes as a growth engine for the municipality. The agency says a default could disrupt public services, weaken implementation of local development strategy and temporarily impair financing access for other local government-related entities.

Fitch assesses the company's standalone credit profile at b, based on a midrange risk profile and a b financial profile. The agency expects liquidity coverage of about 5.2x in 2026 to help offset high leverage, while noting the company had CNY95.1 billion in undrawn uncommitted credit lines and CNY7.1 billion in unrestricted cash at the end of 2025.

The rating case assumes operating revenue falls to CNY9.0 billion in 2026 from CNY11.1 billion in 2025 because of lower project deliveries and revenue recognition, before recovering to CNY13.2 billion by 2030. Fitch projects net adjusted debt to rise to CNY79.1 billion by 2030 from CNY67.0 billion in 2025, with leverage around 66x, as capital spending on urban development continues alongside moderate revenue and EBITDA improvement.

Fitch says negative rating action could follow if its view of Changsha's ability or willingness to support the company weakens, including if the support score falls to 25 or below. An upgrade would require stronger perceived government capacity or incentive to support XiangJiang Group, lifting the support score to 35 or above.

Our earlier coverage of Fitch’s rating on China Hainan Rubber’s proposed subordinated perpetual securities explained how the instrument’s junior ranking and coupon-deferral features drove a BBB- rating below the issuer level. We also outlined Fitch’s rationale for factoring in strong group/state-linked support, alongside the company’s high leverage and liquidity position as it sought to refinance offshore debt.

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