On 19 January 2024, we downgraded China Huarong Asset Management Co., Ltd. 's (Huarong AMC) ratings to Ba1 and changed its outlook to negative.

The Ba1 long-term issuer rating of Huarong AMC incorporates a standalone assessment of caa1, a one-notch uplift based on our assumption of a moderate level of support from CITIC Group Corporation (CITIC Group, A3 stable) and a five-notch uplift based on our assumption of a very high level of support from the Government of China (A1 negative).

The caa1 standalone assessment of Huarong AMC reflects its thin capital buffer, weak and volatile profitability, and the pressure on its asset quality.

Our support assumptions reflect CITIC Group’s position as the largest shareholder and its participation in Huarong AMC's supervision and management, and the fact that Huarong AMC is indirectly controlled by China’s Ministry of Finance (MOF).