Moody’s Downgrades China Tourism Group Credit to Baa1, Outlook Stable

Moody’s Downgrades China Tourism Group’s Credit Rating

Moody’s Investors Service has downgraded the corporate family rating of China Tourism Group Duty Free Corporation Limited (China Tourism Group) to Baa2 from Baa1. The rating outlook remains stable.

The downgrade reflects Moody’s assessment of a sustained weakening in the company’s credit profile. This weakening is primarily attributed to challenges in its core duty-free operations, particularly in Hainan, and an expected increase in financial leverage.

Moody’s anticipates that the company’s revenue and earnings will remain under pressure in the near to medium term. This is due to factors such as the ongoing restructuring of the duty-free industry in Hainan and intensified competition.

The rating agency forecasts that China Tourism Group’s debt-to-EBITDA ratio will likely remain elevated in the next 12-18 months. This is a key factor influencing the downgrade.

The stable outlook indicates that Moody’s does not expect further rating downgrades in the immediate future, provided the company’s credit metrics stabilize within the expected range.

Key Points

• Corporate family rating downgraded to Baa2 from Baa1.
• Rating outlook remains stable.

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