West China Cement (02233) upgraded to "BB-"; outlook stable

    S&P Global Ratings raised its long-term issuer credit rating on West China Cement Ltd. (WCC)(02233) to 'BB-' from 'B+'.
  It raised the ratings because WCC has significantly improved EBITDA and reduced debt in recent years under favorable cement industry fundamentals in China. The company no longer faces significant maturity pressure after refinancing its U.S. dollar-denominated senior unsecured notes in September 2019; the notes were due 11 September 2019.
  S&P expects WCC to maintain low leverage, given its robust operating cash flows and disciplined capital expenditure (capex).
  WCC will continue to benefit from robust cement industry fundamentals. Overall EBITDA will remain strong, thanks to continued off-peak season production, which has significantly lifted cement prices in recent years.
  The average selling price (ASP) has further increased by 9% in the first half of 2019 on a year-on-year basis. In addition, ongoing high-speed railway construction will keep demand growth stable in Shaanxi province. The agency expects unit gross profit to decline slightly, owing to fast-increasing production costs, but it should remain high.