[ET Net News Agency, 16 December 2019] Moody's Investors Service has assigned a Baa1
long-term issuer rating and a Prime-2 short-term issuer rating to China Merchants
Securities Co., Ltd. (CMS)(06099).
The entity-level outlook on CMS is stable.
This is the first time that Moody's has assigned ratings to CMS.
Moody's said CMS' Baa1 long-term issuer rating incorporates (1) its standalone
assessment of Ba1; (2) a one-notch uplift, based on Moody's assumption of a very high
level of support from and a high level of dependence on its parent, China Merchants Group
Limited (CMG), in times of need; and (3) a two-notch uplift, based on Moody's assumption
of a high level of support from the Chinese government (A1 stable) via its parent, in
times of need.
The Ba1 standalone assessment reflects CMS' (1) long track record in China's securities
industry; (2) ample liquidity on the balance sheet; (3) good profitability; and (4) low
leverage when compared with global peers.
Offsetting these credit strengths are the risks arising from the rapid increase in its
fixed-income securities investments and the company's rising leverage. CMS' standalone
assessment also takes into account the challenging operating environment for securities
companies in China.
Established in 1991, CMS has set up a national network and solid franchise in brokerage,
investment banking and asset management. (KL)