Guangzhou City Construction Investment Group Co., Ltd 's (Guangzhou City Construction) A3 issuer rating is based on the Guangzhou government's capacity to support (GCS) score of a2 and Moody's assessment of how Guangzhou City Construction's characteristics affect the Guangzhou government's propensity to support, resulting in a one-notch downward adjustment from the GCS score.

Our assessment of Guangzhou's GCS score reflects Guangzhou's status as the provincial capital of Guangdong, one of the most developed regions in China (A1 stable); its relatively strong economic and financial profiles; and relatively low contingent liability risks compared with other regions.

Guangzhou City Construction's A3 issuer rating also reflects the Guangzhou government's propensity to provide support to Guangzhou City Construction, which is based on the Guangzhou government's ownership of Guangzhou City Construction; the company's status as the second-largest quasi-welfare state-owned enterprise (SOE) by asset size; its role as the designated platform for infrastructure development and industrial upgrade, and dominant water utilities service provider in Guangzhou; its strong access to funding through major state-owned banks and the domestic bond market; and its low contingent risk related to external guarantees and third-party lending.

However, the one-notch downward adjustment from Guangzhou's GCS score reflects the company's fast debt growth related to public policy-driven investments, and its substantial exposure to and investments in commercial businesses, in particular, equity investments and property development.