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Alibaba Group Holding Limited
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Announcement of Periodic Review:

Moody's announces completion of a periodic review for a group of Consumer Product, Tech, Trading and Other issuers in Asia

21 Sep 2022

New York, September 21, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.

The review was conducted through a portfolio review discussion held on 14 September 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.

"IMPORTANT NOTICE: MOODY'S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS. SUCH USE WOULD BE RECKLESS AND INAPPROPRIATE. SEE FULL DISCLAIMERS BELOW."

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.

Key Rating Considerations

The principal methodology used for the rated entities listed below was Business and Consumer Services published in November 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Business and Consumer Services

Scale:  Scale is considered because larger scale can be an indicator of a company's ability to influence business trends and pricing within its service segments and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in demand, geographic diversity, cost absorption, R&D capabilities and of greater bargaining strength with customers, labor, and vendors. Revenue is an indicator of scale.

Business Profile:  The business profile of a company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. The business and consumer service industry comprises a vast array of business models encompassing a multitude of identifiable customer bases worldwide. We consider the underlying demand characteristics of a company's service offerings and their relative breadth, strength, and endurance of demand. Companies that have established a long history of strong demand for a diverse range of service offerings that are critical to customer needs generally entail lower risk compared to those that offer a single line of service which have less importance for customer needs or have a limited history of success.

Profitability:  Profits matter because they are necessary to maintain a business's competitive position, including sufficient reinvestment in marketing, research, facilities, and human capital. Sustained high profitability is generally a strong indicator of substantial competitive advantages, particularly if combined with evidence of a stable or rising market share. EBITA Margin is an indicator of profitability.

Leverage and Coverage:  Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environment within the segments in which it operates. Indicators of leverage and coverage include ratios such as: Debt / EBITDA, EBITA / Interest Expense, and Retained Cash Flow/ Net Debt.

Financial Policy:  Management and board tolerance for financial risk is a consideration because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Rating Considerations:  Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.

• Alibaba Group Holding Limited

• Amplify Finco Pty Limited

• ANI Technologies Pvt Ltd

• APOG Bidco Pty Ltd

• Aristocrat Leisure Ltd

• Australian Technology Innovators Pty Limited

• Baidu Inc.

• Brambles Limited

• CA Magnum Holdings

• China Dili Group

• CITIC Group Corporation

• CITIC Limited

• Computershare Ltd

• Country Garden Services Holdings Company Ltd

• Genesis Care Finance Pty Ltd

• Grab Holdings Inc

• Infosys Limited

• Legal Search Holdings Pty Ltd

• Li & Fung Limited

• Meinian Onehealth Healthcare Hldg. Co., Ltd.

• Meituan

• NAVER Corporation

• New Oriental Education & Technology Grp Inc.

• Oravel Stays Limited

• Tata Consultancy Services Limited

• Tencent Holdings Limited

• Tencent Music Entertainment Group

• Thevelia Holdings Limited

• Titan AcquisitionCo New Zealand Limited

• United Tractors Tbk (PT)

• Vistra Group Holdings (BVI) I Limited

• Wanda Commercial Properties (HK) Co. Limited

• Weibo Corporation

• WuXi AppTec Co Ltd.

The principal methodology used for the rated entity listed below was Business and Consumer Services (Japanese) published in November 2021. Please see the Rating Methodologies page on https://ratings.moodys.com/japan/ratings-news for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Business and Consumer Services (Japanese)

Scale:  Scale is considered because larger scale can be an indicator of a company's ability to influence business trends and pricing within its service segments and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in demand, geographic diversity, cost absorption, R&D capabilities and of greater bargaining strength with customers, labor, and vendors. Revenue is an indicator of scale.

Business Profile:  The business profile of a company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. The business and consumer service industry comprises a vast array of business models encompassing a multitude of identifiable customer bases worldwide. We consider the underlying demand characteristics of a company's service offerings and their relative breadth, strength, and endurance of demand. Companies that have established a long history of strong demand for a diverse range of service offerings that are critical to customer needs generally entail lower risk compared to those that offer a single line of service which have less importance for customer needs or have a limited history of success.

Profitability:  Profits matter because they are necessary to maintain a business's competitive position, including sufficient reinvestment in marketing, research, facilities, and human capital. Sustained high profitability is generally a strong indicator of substantial competitive advantages, particularly if combined with evidence of a stable or rising market share. EBITA Margin is an indicator of profitability.

Leverage and Coverage:  Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environment within the segments in which it operates. Indicators of leverage and coverage include ratios such as: Debt / EBITDA, EBITA / Interest Expense, and Retained Cash Flow/ Net Debt.

Financial Policy:  Management and board tolerance for financial risk is a consideration because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Rating Considerations:  Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.

• Recruit Holdings Co., Ltd.

The principal methodology used for the rated entities listed below was Consumer Durables published in September 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Consumer Durables

Scale:  Scale is an  indicator of the overall depth of a company's business and its success in attracting a variety of customers. Larger companies may be able to achieve greater economies of scale and be better positioned to leverage fixed costs and the advertising spend to promote consumer awareness of brands and products. Size may also be an indicator for a consumer durable company's resilience to changes in product demand and its clout with suppliers and customers. Broad scale will likely reduce a company's exposure to business disruption caused by a problem with a single plant. Total sales are an indicator of scale.

Business Profile:  The business profile of a consumer durables company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a consumer durables company's business profile are its competitive position and brand strength. A company's competitive position includes its stability of cash flows, overall market position, product and geographic diversity, barriers to entry, and cost structure characteristics.

Profitability:  Profitability matters because it is needed to generate sustainable cash flow and maintain a competitive position. Profitability on a long-term multi-year basis helps companies attract capital and make ongoing investments in research and development to maintain a technological edge. The EBIT margin is an indicator of profitability.

Leverage and Coverage:  Leverage and coverage measures provide important indications of a company's financial flexibility and long-term viability. Measures of leverage and coverage include Debt/ EBITDA, Retained Cash Flow/ Net Debt and EBIT/ Interest Expense.

Financial Policy:  Management and board tolerance for financial risk is considered because it directly affects leverage levels, credit quality, and the risk of adverse changes in financing and capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the company's ability to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Rating Considerations:  Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.

• LG Electronics Inc.

• Midea Group Co., Ltd.

The principal methodology used for the rated entity listed below was Consumer Packaged Goods published in June 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Consumer Packaged Goods

Scale:  Scale is considered because it is an indicator of the overall depth of a company's business and its success in attracting a variety of customers, as well as its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Large-scale companies generally have more flexibility to allocate capacity and absorb expenses under different demand and cost scenarios than small-scale companies. Larger companies are also typically in stronger positions to negotiate with distributors and retailers. Revenue is an indicator of scale.

Business Profile:  The business profile of a consumer packaged goods company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a consumer packaged goods company's business profile is its geographic and segmental diversification, its market position and its category and product portfolio. Companies in the consumer packaged goods industry typically have experienced low revenue growth, and they rely on strong market positions and brand strength to increase profits through higher pricing, lower costs, and favorable margins.

Profitability:  Profits are considered because they are needed to generate sustainable cash flow and maintain a competitive position. Profit margins are an important indicator of a consumer packaged goods company's overall brand strength, its efficiency in marketing products through distribution channels, and in particular its ability to control costs. A consumer packaged goods company with a strong competitive position and high relevance to consumers, based on its brands or the types of products it sells, often has high consumer loyalty, generally leading to more recurring sales and stronger profit margins than a company with a weaker competitive position and less relevance to consumers. EBITA Margin is an indicator of profitability.

Leverage and Coverage:  Leverage and cash flow coverage measures provide important indications of a consumer packaged goods company's financial flexibility and long-term viability. Indicators of leverage and coverage include ratios such as: Debt/ EBITDA, EBITA/ Interest Expense, and Retained Cash Flow/ Net Debt.

Financial Policy:  Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is considered because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.

Other Rating Considerations:  Other considerations may include but are not limited to:  financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends are also considered.

• Snacking Investments BidCo Pty Limited

The principal methodology used for the rated entities listed below was Consumer Packaged Goods (Japanese) published in September 2022. Please see the Rating Methodologies page on https://ratings.moodys.com/japan/ratings-news for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Consumer Packaged Goods (Japanese)

Scale:  Scale is considered because it is an indicator of the overall depth of a company's business and its success in attracting a variety of customers, as well as its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Large-scale companies generally have more flexibility to allocate capacity and absorb expenses under different demand and cost scenarios than small-scale companies. Larger companies are also typically in stronger positions to negotiate with distributors and retailers. Revenue is an indicator of scale.

Business Profile:  The business profile of a consumer packaged goods company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a consumer packaged goods company's business profile is its geographic and segmental diversification, its market position and its category and product portfolio. Companies in the consumer packaged goods industry typically have experienced low revenue growth, and they rely on strong market positions and brand strength to increase profits through higher pricing, lower costs, and favorable margins.

Profitability:  Profits are considered because they are needed to generate sustainable cash flow and maintain a competitive position. Profit margins are an important indicator of a consumer packaged goods company's overall brand strength, its efficiency in marketing products through distribution channels, and in particular its ability to control costs. A consumer packaged goods company with a strong competitive position and high relevance to consumers, based on its brands or the types of products it sells, often has high consumer loyalty, generally leading to more recurring sales and stronger profit margins than a company with a weaker competitive position and less relevance to consumers. EBITA Margin is an indicator of profitability.

Leverage and Coverage:  Leverage and cash flow coverage measures provide important indications of a consumer packaged goods company's financial flexibility and long-term viability. Indicators of leverage and coverage include ratios such as: Debt/ EBITDA, EBITA/ Interest Expense, and Retained Cash Flow/ Net Debt.

Financial Policy:  Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is considered because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.

Other Rating Considerations:  Other considerations may include but are not limited to:  financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends are also considered.

• Japan Tobacco Inc.

• Shiseido Company, Limited

The principal methodology used for the rated entities listed below was Diversified Technology published in February 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Diversified Technology

Scale:  Larger scale can be an indicator of a company's ability to influence business trends and pricing within the industry and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in product demand, geographic diversity, cost absorption, R&D capabilities and bargaining strength with customers and suppliers. Total revenue and reported EBIT are indicators of scale.

Business Profile:  Business profile provides an indication of the likely stability and sustainability of the company's cash flows. End-market diversification is viewed positively because it mitigates the risk that a change in any individual industry or vertical market will significantly impair profitability and cash flow. Market share is an important component of business profile as it can indicate the level of competitive success, the depth of customer relationships and likely prospects for future performance.  We assess market position, product differentiation and expected volatility in results.

Profitability and Efficiency:  This rating factor assesses the level of control that a company has over its profit margins and management's effectiveness in using the levers available to it to preserve competitive profit margins in a way that creates strong and sustainable relationships with customers and consumers. EBITDA margin and Operating Income Return on Assets are indicators of profitability and efficiency.

Leverage and Coverage:  Leverage and cash flow coverage measures provide indications of how much financial risk a diversified technology company is willing to undertake. These metrics are also indicators of a company's ability to sustain its competitive position, invest in growth opportunities and service debt. Measures of leverage and coverage include Debt/EBITDA, EBIT/Interest and Free Cash Flow/Debt.

Financial Policy:  Management and board tolerance for financial risk is a rating determinant as it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Rating Considerations:  Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends could also be considered.

• Lenovo Group Limited

• Xiaomi Corporation

The principal methodology used for the rated entities listed below was Diversified Technology (Japanese) published in March 2022. Please see the Rating Methodologies page on https://ratings.moodys.com/japan/ratings-news for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Diversified Technology (Japanese)

Scale:  Larger scale can be an indicator of a company's ability to influence business trends and pricing within the industry and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in product demand, geographic diversity, cost absorption, R&D capabilities and bargaining strength with customers and suppliers. Total revenue and reported EBIT are indicators of scale.

Business Profile:  Business profile provides an indication of the likely stability and sustainability of the company's cash flows. End-market diversification is viewed positively because it mitigates the risk that a change in any individual industry or vertical market will significantly impair profitability and cash flow. Market share is an important component of business profile as it can indicate the level of competitive success, the depth of customer relationships and likely prospects for future performance.  We assess market position, product differentiation and expected volatility in results.

Profitability and Efficiency:  This rating factor assesses the level of control that a company has over its profit margins and management's effectiveness in using the levers available to it to preserve competitive profit margins in a way that creates strong and sustainable relationships with customers and consumers. EBITDA margin and Operating Income Return on Assets are indicators of profitability and efficiency.

Leverage and Coverage:  Leverage and cash flow coverage measures provide indications of how much financial risk a diversified technology company is willing to undertake. These metrics are also indicators of a company's ability to sustain its competitive position, invest in growth opportunities and service debt. Measures of leverage and coverage include Debt/EBITDA, EBIT/Interest and Free Cash Flow/Debt.

Financial Policy:  Management and board tolerance for financial risk is a rating determinant as it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Rating Considerations:  Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends could also be considered.

• Fujitsu Limited

• Sony Group Corporation

The principal methodology used for the rated entities listed below was Guarantees, Letters of Credit and Other Forms of Credit Substitution Methodology published in July 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Guarantees, Letters of Credit and Other Forms of Credit Substitution Methodology

Third-party credit support:  The goal of third-party credit support is to substitute the credit risk of the support provider for the credit risk of the issuer. For credit substitution to be achieved, investors must be insulated from the risk of payment default by the underlying obligor. Generally, the long-term ratings on credit-supported transactions track the long-term rating assigned to the credit provider.

Additional Considerations:  Credit substitution requires more than just the presence of a credit support instrument from a third-party credit provider. The transaction documentation provides clear instructions to ensure that payments under the credit support facility are made when due and that there are no impediments to the timely payment of debt service. The key elements evaluated include: mitigation of bankruptcy risk of issuer; sufficiency of credit support; structural provisions which provide for the timely payment of debt service; bondholders to be paid in full if credit support expiration or termination will result in a change.

• Computershare Trust Company, N.A.

• Minor International Public Company Limited

The principal methodology used for the rated entities listed below was Government-Related Issuers Methodology published in February 2020. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Government-Related Issuers Methodology

Assigning a Baseline Credit Assessment (BCA):  The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) – its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.

Government uplift:  The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance.  Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.

GRIs without a BCA:  In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating.

• CITIC Group Corporation

• CITIC Limited

The principal methodology used for the rated entity listed below was Government-Related Issuers Methodology (Japanese) published in February 2020. Please see the Rating Methodologies page on https://ratings.moodys.com/japan/ratings-news for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Government-Related Issuers Methodology (Japanese)

Assigning a Baseline Credit Assessment (BCA):  The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) – its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.

Government uplift:  The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance.  Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.

GRIs without a BCA:  In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating.

• Japan Tobacco Inc.

The principal methodology used for the rated entities listed below was Semiconductors published in September 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Semiconductors

Scale:  Scale is a consideration because it is an indicator of the overall breadth and depth of a company's business, its pricing power, and its success in attracting a variety of customers, as well as its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Scale also can be an indicator of a semiconductor company's research and development capabilities and its negotiating leverage with customers and suppliers. Scale is measured using total reported revenue.

Business Profile:  The business profile of a semiconductor company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Key aspects of a semiconductor company's business profile include its revenue stability and its visibility, or insight into demand; the diversity or concentration of its end markets, customers, and products; its market position; and barriers to entry into a market or a business segment.

Profitability:  Profits are considered because they are needed to generate sustainable cash flow and maintain a competitive position, which includes making sufficient investment in research and development and in capital expenditures to maintain market position through ongoing technological shifts. A semiconductor company's level of profitability, and the sustainability of those profits, may also provide important indications about the value of its products. Indicators of profitability include EBITDA Margin and (EBITDA minus Capex) / Revenue.

Leverage and Coverage:  Leverage and cash flow coverage measures provide important indications of financial flexibility and long-term viability, including a semiconductor company's ability to adapt to changes in the economic and business environment. Key metrics for leverage and coverage are Debt/ EBITDA, Free Cash Flow/ Debt and EBIT/ Interest Expense.

Financial Policy:  Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is an important rating determinant, because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost to investment and capital allocation. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.

Other Rating Considerations:  Other considerations may include but are not limited to:  financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.

• Magnachip Semiconductor Corporation

• Samsung Electronics Co., Ltd.

• Semiconductor Manufacturing Int'l Corp.

• SK Hynix Inc.

• Taiwan Semiconductor Manufacturing Co Ltd

The principal methodology used for the rated entity listed below was Software published in June 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Software

Scale:  Scale tends to be an indicator of success in developing breadth of customers and overall depth of business. It also typically confers economies of scale in research, engineering and development, and corporate overhead. Larger companies with strong cash flows also typically have greater access to capital markets and greater options in making acquisitions. Software companies often rely on acquisitions to obtain critical technology or promising product lines. Scale is measured by Revenue and Free Cash Flow.

Business Profile:  The business profile factor provides an indication of a company's qualitative strength on several measures of diversification and our assessment of market share. Business Profile provides an indication of the likely stability and sustainability of the company's cash flows. To score highly on the factor overall, a company must demonstrate significant product diversity, geographic diversity, end-market diversity and strong market share.  A strong position in one of these areas with weakness in the other can limit long-term stability of cash flows.

Profitability:  Profitability is considered because it drives sustainable cash flow and a strong competitive position.  We assess this using Return on Assets.

Leverage and Coverage:  Leverage and Coverage measures are indicators of a company's financial flexibility and long-term viability. Financial flexibility is critical to software companies to adapt to evolving technology and trends. Software companies need resources to invest in research and development as well as to make strategic acquisitions both to acquire critical technology and to expand product suites to meet shifting customer demands. Ratios such as Debt/ EBITDA, EBITDA minus Capex/ Interest Expense, Free Cash Flow/ Debt and Cash and Marketable Securities/ Debt are indicators of leverage and coverage.

Financial Policy:  Management and board tolerance for financial risk is a rating determinant as it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Factors:  Other factors may include, but are not limited to, financial controls, quality of financial reporting, corporate legal structure, quality and experience of management, assessment of corporate governance as well as environmental and social considerations, exposure to uncertain licensing regimes and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends are also considered.

• MYOB Invest Co Pty Ltd

The principal methodology used for the rated entities listed below was Trading Companies published in June 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Trading Companies

Scale:  Scale, as indicated through revenues and assets (fixed assets and total assets), is typically indicative of business position, ability to influence business trends and pricing, to weather the vagaries of economic cycles, and to support a stable or growing market position. Scale also can be an indicator of resilience to changes in product demand, geographic diversity, cost absorption and bargaining strength with customers and suppliers.

Business Profile:  Business Profile considers the strength of the company's global presence, the diversity of its products, its long-term competitiveness, the stability of its performance, its long-term viability, and its risk profile. Our assessment for Business Profile includes: (i) geographic, operational and product diversity, (ii) competitive advantages, (iii) durability of its market share and customer relationships, (iv) the stability of performance over time, (v) the competitive landscape in each key market, (vi) the threat posed by potential new entrants or technological change, (vii) the degree to which products or services are differentiated, (viii) growth strategy, and (ix) risk profile. The company's risk profile considers a broad range of issues, including the perceived likelihood that the company might undertake sizable or frequent acquisitions in new markets that would raise business risk, exposures to volatile commodity prices and management's policies and practices concerning proprietary trading. The level of vertical integration, the percentage of sales and earnings that arise from merchandising activities and the evolution of the company's business over time might also be considered.

Leverage:  Leverage can indicate a company's financial flexibility, long-term viability, ability to make new investments, to weather the vagaries of the business cycle and respond to unexpected challenges, to access to external funding, and to absorb the negative impact from volatile commodity prices and large shifts in consumer demand.  Some indicators of leverage include: Debt/ Book Capitalization, Net Debt/ EBITDA, and Funds from Operations/ Debt.

Financial Policy:  Management and board tolerance for financial risk is a rating determinant as it directly affects debt levels, credit quality and the risk of adverse changes in financing and capital structure. Considerations can include a company's public commitments in this area, its track record for adhering to commitments, and views on the ability of the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Considerations:  Additional considerations also include but are not limited to: our assessment of the quality of management, corporate governance, financial controls, liquidity management, event risk and seasonality.

• COFCO (Hong Kong) Limited

• PETRONAS LNG Ltd.

The principal methodology used for the rated entities listed below was Trading Companies (Japanese) published in August 2022. Please see the Rating Methodologies page on https://ratings.moodys.com/japan/ratings-news for a copy of this methodology.

Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.

Trading Companies (Japanese)

Scale:  Scale, as indicated through revenues and assets (fixed assets and total assets), is typically indicative of business position, ability to influence business trends and pricing, to weather the vagaries of economic cycles, and to support a stable or growing market position. Scale also can be an indicator of resilience to changes in product demand, geographic diversity, cost absorption and bargaining strength with customers and suppliers.

Business Profile:  Business Profile considers the strength of the company's global presence, the diversity of its products, its long-term competitiveness, the stability of its performance, its long-term viability, and its risk profile. Our assessment for Business Profile includes: (i) geographic, operational and product diversity, (ii) competitive advantages, (iii) durability of its market share and customer relationships, (iv) the stability of performance over time, (v) the competitive landscape in each key market, (vi) the threat posed by potential new entrants or technological change, (vii) the degree to which products or services are differentiated, (viii) growth strategy, and (ix) risk profile. The company's risk profile considers a broad range of issues, including the perceived likelihood that the company might undertake sizable or frequent acquisitions in new markets that would raise business risk, exposures to volatile commodity prices and management's policies and practices concerning proprietary trading. The level of vertical integration, the percentage of sales and earnings that arise from merchandising activities and the evolution of the company's business over time might also be considered.

Leverage:  Leverage can indicate a company's financial flexibility, long-term viability, ability to make new investments, to weather the vagaries of the business cycle and respond to unexpected challenges, to access to external funding, and to absorb the negative impact from volatile commodity prices and large shifts in consumer demand.  Some indicators of leverage include: Debt/ Book Capitalization, Net Debt/ EBITDA, and Funds from Operations/ Debt.

Financial Policy:  Management and board tolerance for financial risk is a rating determinant as it directly affects debt levels, credit quality and the risk of adverse changes in financing and capital structure. Considerations can include a company's public commitments in this area, its track record for adhering to commitments, and views on the ability of the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.

Other Considerations:  Additional considerations also include but are not limited to: our assessment of the quality of management, corporate governance, financial controls, liquidity management, event risk and seasonality.

• ITOCHU Corporation

• Marubeni Corporation

• Mitsubishi Corporation

• Mitsui & Co., Ltd.

• Sumitomo Corporation

• Toyota Tsusho Corporation

This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.

Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.

Please see the Issuer page on https://ratings.moodys.com/japan/ratings-news for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.

This publication does not announce a credit rating action.

For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com

for the most updated credit rating action information and rating history.


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