22 Oct., 2019, Fitch Ratings has upgraded the Long-Term Issuer Default Rating (IDR) of China-based Yingde Gases Group Company Limited (Yingde) to ‘BB‘ from ‘BB-’. The Outlook is Stable. The agency has also upgraded the senior unsecured rating of Yingde to ‘BB‘ from ‘BB-’.
The upgrade is driven by an accelerating improvement in Yingde's revenue and business mix combined with better financial metrics since 2016.
The new senior management team put in place in 2017 has helped Yingde to improve revenue and cash flows, contributing to the company's deleveraging. Yingde has also been increasing its efforts to expand in the merchant-gas segment, which generates a higher dollar margin per cubic metre than the onsite segment. Yingde's revenue rose 25% yoy in 2018 from a ramp-up in its production facilities and the increasing sales contribution from the merchant-gas business. Fitch forecasts Yingde's leverage will continue to decline.