Report Industry Investment Rating - Not provided in the document Core Viewpoints - The high-pressure situation of implicit debt supervision remains unchanged, and emphasis is placed on preventing the "risk of risk disposal." Local governments are accelerating their exit from the list of key debt provinces. The issuance and trading of local government bonds and urban investment bonds have shown certain trends, and the dynamic adjustment of the debt situation and corporate operations need to be continuously monitored [2][4][8] Summary by Directory 1. News Review - **Policy for Inter - city Railways**: The National Development and Reform Commission issued an opinion to regulate inter - city railway construction, focusing on debt risk control from both asset and liability sides. On the asset side, strict access and exit standards are set based on passenger flow density; on the liability side, high - risk areas are restricted from adding new local government debt for inter - city railway construction [5][6][7] - **Exit from Key Provinces**: Jilin officially announced its successful exit from the list of key debt provinces, and Qinghai aims to exit in 2026. After exiting, the provinces may promote infrastructure investment and economic recovery, but risks such as blind transformation of urban investment enterprises should be watched out for [8] - **"Exit from Platform" of Urban Investment Enterprises**: Nine urban investment enterprises declared to become market - oriented business entities or exit the financing platform list this week, mainly in the infrastructure investment and financing industry. Since October 2023, a total of 1012 enterprises have made such declarations, with more in eastern provinces [11] - **Early Redemption of Bonds**: Twenty - three urban investment enterprises redeemed bond principal and interest in advance this week, involving 24 bonds with a total scale of 39.15 billion yuan [13] - **No Postponement or Cancellation of Bond Issuance**: There was no postponement or cancellation of urban investment bond issuance this week [14] 2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds - **Local Government Bonds**: The issuance and net financing scale of local government bonds increased this week, and the stock scale exceeded 55 trillion yuan for the first time. A total of 26 local bonds were issued, with new bonds and refinancing bonds issued. The weighted average issuance term decreased, and the issuance cost decreased [14][15] - **Urban Investment Bonds**: The issuance and net financing scale of urban investment bonds increased this week, with a decrease in issuance interest rate and a narrowing of issuance spread. The issuance was mainly private - placement bonds, with a 5 - year term as the main type. The issuer's main body level was mainly AA +. One overseas urban investment bond was issued [20] 3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - **Market Liquidity**: The central bank conducted net investment in the open market, but due to the approaching Spring Festival and tax - payment period, the capital market was tight, and short - term capital interest rates increased [26] - **Level Adjustment and Credit Events**: There were no urban investment level adjustment events or urban investment credit risk events this week [26] - **Local Government Bonds**: The spot trading volume of local government bonds increased by 3.90%, and the maturity yields of most terms decreased, with an average decline of 2.67BP [26] - **Urban Investment Bonds**: The trading volume of urban investment bonds increased by 0.98%, and the maturity yields of most terms decreased, with an average decline of 2.74BP. The credit spreads of 1 - year, 3 - year, and 5 - year AA + urban investment bonds narrowed [27] - **Abnormal Trading of Urban Investment Bonds**: Thirteen abnormal transactions of 11 bonds of 9 urban investment entities occurred this week, with a decrease in the number of abnormal transactions, entities, and bonds compared with the previous period [27] 4. Important Announcements of Urban Investment Enterprises - Forty - two urban investment enterprises issued announcements on changes in senior management, legal representatives, etc., changes in controlling shareholders and actual controllers, equity/asset transfers, cumulative new borrowings, and name changes [32]

1. Report Industry Investment Rating - No information provided in the content 2. Core Viewpoints of the Report - In 2025, the infrastructure investment and financing (hereinafter "infrastructure investment") industry policies focused on "controlling new debts and resolving existing debts" and "promoting development", further implementing and refining the requirements of the "comprehensive debt resolution" plan. The industry has entered a critical stage of systematic reshaping, with risks being temporarily mitigated and the corporate financing environment showing marginal improvement [3][4][28]. - As implicit debts are gradually replaced, operating debts are expected to become the key area of focus. Debt resolution work will shift from debt replacement to building long - term mechanisms, achieving "full - scope and centralized" debt management. Future fiscal and tax system reforms are expected to deepen, better matching local fiscal powers and responsibilities, and assisting local debt resolution [18][19][28]. - With the continuous decline of land finance and the replacement of implicit debts, in - depth market - oriented transformation has become the main way out for infrastructure investment enterprises. These enterprises can seek transformation opportunities in the balance between debt resolution and development but need to be vigilant against market - related risks and changes in government - enterprise relationships [25][26][28]. 3. Summary by Relevant Catalogs 3.1 Policy Review - **More Active Fiscal Policy and Coordinated Use of Multiple Tools**: In 2025, the fiscal policy was unprecedentedly strong, with the deficit rate exceeding 4% for the first time and the broad deficit scale approaching 14 trillion yuan. Special bonds were used to support the infrastructure investment industry in resolving existing debts. By the end of August 2025, 4 trillion yuan of the one - time increase of 6 trillion yuan in special debt quota had been issued, reducing the average interest cost of debts by over 2.5 percentage points and saving over 450 billion yuan in interest payments. The scope of special bonds was further expanded, and in the second half of the year, 500 billion yuan of local debt balance limits were revitalized, and the new local debt quota for 2026 was advanced. Financial institutions also participated in debt resolution [4]. - **Improved Debt Risk Management Mechanisms**: In 2025, the central and local governments tightened the supervision network for implicit debts, strengthening control from multiple aspects such as debt monitoring, review, and accountability. The Debt Management Department of the Ministry of Finance was officially established, and local governments deepened the construction of monitoring mechanisms. The financing review was tightened, and the Ministry of Finance publicly announced typical cases of implicit debt accountability twice during the year [5]. - **Dynamic Optimization of Debt Risk List Management and Accelerated Exit from Platforms**: The government work report in 2025 emphasized the dynamic adjustment of the list of high - risk debt areas. Ningxia, Inner Mongolia, and Jilin completed their debt resolution tasks and met the conditions for exiting high - risk debt provinces. By the end of 2025, over 70% of financing platforms had exited [6][8][17]. - **Deepened Transformation Policies**: Policies guided infrastructure investment enterprises to transform from traditional infrastructure investment carriers to market - oriented industrial entities. Multiple policies were introduced to support their transformation, and financing support such as science and technology innovation bonds and infrastructure REITs was provided [9]. - **Synergistic Support of Fiscal and Financial Policies**: Policies supported the infrastructure investment industry through four pillars: expanding effective investment, innovating financing mechanisms, optimizing the relationship between the central and local governments, and strengthening macro - coordination, aiming to achieve the goal of "resolving debts in development and promoting development in debt resolution" [10]. 3.2 Policy Impact - **Accelerated Implementation of Local Government Replacement Bonds and Mitigated Short - term Debt Risks**: By December 31, 2025, 2 trillion yuan of refinancing bonds for replacing existing implicit debts were issued, and the new local government bonds reached 5,361.69 billion yuan, exceeding the annual limit. The replacement of implicit debts was accelerated, and short - term debt pressure was relieved [13]. - **Tightened Supply of Urban Investment Bonds**: In 2025, 7,880 urban investment bonds were issued, with a total issuance of 5,181.873 billion yuan and a net financing of - 238.187 billion yuan. The total issuance decreased by 13.26% year - on - year. The net financing was negative for most months, and the supply of urban investment bonds continued to tighten [14]. - **Adjusted Financing Channels and Decreased Bond Financing Costs**: Infrastructure investment enterprises adjusted their financing channels, with an increase in the proportion of credit financing and a decrease in the proportion of bond financing. The bond financing costs decreased significantly, and the comprehensive financing costs also dropped to some extent [15]. - **Differentiated Negative Public Opinions**: In 2025, the number of new bond - issuing infrastructure investment enterprises on the continuous overdue list and the number of newly defaulted non - standard products decreased significantly, but the number of enterprises with multiple historical bill overdue cases showed regional differences. The long - term fundamental improvement of infrastructure investment enterprises' refinancing still requires time, and issues such as operating debts, interest payment pressure, and capital occupation need attention [16]. - **New Stage of Debt Resolution and Phased Achievements in "Exiting Platforms" and Transformation**: Policies promoted the transformation of infrastructure investment enterprises, and by the end of 2025, nearly 750 enterprises declared themselves as market - oriented operating entities, accounting for about 19% of bond - issuing infrastructure investment enterprises. Local debt management entered a new stage [17]. 3.3 Industry Development Outlook and Opportunities - **Operating Debts Becoming the Key Focus**: As implicit debts are gradually resolved, operating debts will become the key area of focus. Future resolution methods may be more market - based, and local governments have already introduced policies to promote the resolution of operating debts [18][19][20]. - **Continuous Implementation of the "Comprehensive Debt Resolution" Policy**: Currently, debt resolution mainly relies on financial means, and substantial repayment is insufficient. Future fiscal and tax system reforms are expected to deepen, and debt resolution methods will become more refined and region - specific [21][22][24]. - **Transformation Opportunities for Infrastructure Investment Enterprises**: Infrastructure investment enterprises can participate in areas such as urban renewal, smart cities, and green infrastructure construction. However, they need to be vigilant against risks such as market - related and compliance risks and changes in government - enterprise relationships during the transformation process [25][26][27].

1. Report Industry Investment Rating No information about the report industry investment rating is provided in the content. 2. Core Viewpoints of the Report - Jining City has prominent resource endowments, continuously optimized industrial structure, and its economic development ranks in the upper - middle level in Shandong Province. However, there is an obvious differentiation in economic development among districts and counties. The fiscal self - sufficiency ability is average, with a high degree of dependence on land finance, and the debt risk of urban investment enterprises is worthy of attention. [7][8][11][14] - Since 2024, Jining has taken multiple measures to promote debt resolution, improved the government debt management mechanism, and achieved phased results in debt resolution, such as slowing down the growth rate of urban investment debt, optimizing the debt structure, and reducing the financing cost. [7][27][31] - The issuance of urban investment bonds in Jining tends to have a longer term, and the interest rates and spreads in the primary and secondary markets have decreased. However, the urban investment bond financing was a net outflow in 2024, and the pressure of existing bond repayment is relatively concentrated. [7][34][35] - The commercial paper overdue events in Jining were concentrated from 2022 to 2024 and have converged since 2025. The scale of urban investment lease financing has been continuously decreasing since 2023, and the existing lease financing is still concentrated in economically strong districts. [7][37][40] - The bonds of Jining's industrial investment companies are closely related to national strategies, with short approval time and fast issuance rhythm. However, all are private placements, most bond items are guaranteed, and the issuance costs of some district - level industrial investment companies are relatively high. [7][44][45] - There are many industrial investment enterprises in Jining's urban investment transformation, mainly at the district - county level, with diversified businesses and AA - AA+ as the main credit ratings. [7][49][54] 3. Summary According to Relevant Catalogs Regional Overview - **Geographical and Population Information**: Jining is a central city in the Huaihai Economic Zone, covering an area of 11,187 square kilometers, with a permanent population of 8.1873 million by the end of 2024. However, the population has shown a net outflow trend. [8] - **Resource and Industry**: It has four major resource advantages: minerals, water transportation, agriculture, and culture. The industrial pattern is "coal - power - chemical industry as the foundation, manufacturing as the support, and the service industry accelerating development". It is transforming from "resource - dependent" to "innovation - driven". [9] - **Economic Development**: In 2024, Jining's GDP ranked sixth in Shandong Province, with a growth rate slightly higher than the provincial average. The district - county economic development is uneven, showing a pattern of "strong core areas and weak peripheral areas". [11][13][14] - **Fiscal Situation**: The general public budget revenue in 2024 was 4.9626 billion yuan, ranking fifth in Shandong. The fiscal balance rate was 62.02%, and the comprehensive financial resources were 12.8422 billion yuan, with a high degree of dependence on government fund income. The fiscal development among districts and counties is unbalanced. [16][17][19] - **Debt Risk**: The legal debt risk of the Jining government is relatively controllable, but the interest - bearing debt of urban investment enterprises is prominent. The debt ratio after the superposition of the two exceeds 300%, and the debt is highly concentrated in economically strong districts. [21][22] Debt Resolution Progress - **Measures**: Jining promotes debt resolution through five measures: using bond tools precisely, implementing fiscal revenue expansion and expenditure reduction, promoting urban investment transformation, deepening government - finance - enterprise cooperation, and strengthening supervision. [27][28][29] - **Results**: Since 2024, the growth rate of urban investment debt has slowed down, the debt structure has been optimized, and the financing cost has decreased. However, the financing cost is still high, and the short - term debt repayment pressure remains. The issuance of urban investment bonds has become more long - term, and the interest rates and spreads in the primary and secondary markets have decreased. But the urban investment bond financing was a net outflow in 2024, with concentrated existing bond repayment pressure. The commercial paper overdue events have converged since 2025, and the scale of urban investment lease financing has been continuously decreasing. [7][31][34] Urban Investment Transformation - **Bond Issuance of Industrial Investment Companies**: As of November 2025, 8 bonds of industrial investment companies in Jining have been issued for the first time, with a total issuance scale of 3.22 billion yuan. The bond labels are closely related to national strategies, with short approval time and fast issuance rhythm. But all are private placements, most bond items are guaranteed, and some district - level companies have relatively high issuance costs. [44][45][48] - **Industrial Investment Enterprises in Transformation**: There are 8 industrial investment enterprises in Jining's urban investment transformation, mainly at the district - county level. The transformation models include setting up new platforms, newly established platforms, and new platforms under urban investment companies. The business is diversified, and the main credit ratings are AA - AA+. [49][53][54]

Core Insights - Guizhou Province is facing significant local debt issues, with a total local government debt balance projected to reach 17,537.09 billion yuan by the end of 2024, and urban investment enterprise debt around 9,000 billion yuan, indicating a heavy debt burden compared to national averages [1][7][10] - The province has implemented a multi-faceted debt resolution strategy, supported by central government policies, which has led to a gradual reduction in urban investment enterprise debt and improved financing structures [2][20][43] Debt Characteristics - The local debt scale in Guizhou has been continuously increasing, with local government debt expected to reach 17,537.09 billion yuan and urban investment enterprise debt around 9,000 billion yuan by the end of 2024 [7][10] - There is a significant regional disparity in debt distribution, with urban investment enterprise debt concentrated in Guiyang and Zunyi, accounting for approximately 60% of the province's total [10][16] - Some cities are experiencing liquidity pressure, with cash assets insufficient to cover short-term debts, particularly in Zunyi and Guiyang [14][16] Debt Resolution Measures - Guizhou has limited self-resources for debt resolution but has received substantial support from central policies, forming a multi-dimensional debt resolution system [2][20] - Financial support includes loan extensions, interest rate reductions, and bond financing, with provincial banks providing over 1 trillion yuan in credit to issuing enterprises [2][30] - The province has issued special refinancing bonds and special new bonds, with cumulative issuance amounts ranking among the top in key provinces since 2024 [40][41] Debt Resolution Outcomes - The debt scale of issuing urban investment enterprises has been significantly reduced since the end of 2022, with a net repayment scale exceeding 350 billion yuan annually for 2023-2024 [2][44] - The concentration of repayment pressure has notably decreased, with the distribution of maturing bonds becoming more balanced [48] - Credit spreads for urban investment bonds have narrowed significantly, although they remain at a high level compared to other key provinces [50][53] Future Outlook - In the short term, liquidity risks are manageable under the current debt resolution policies, but repayment pressures for urban investment enterprises persist [3][20] - Long-term growth is expected in sectors such as liquor, mineral processing, digital economy, and new energy, which may help gradually resolve debt issues through economic development [3][20]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In recent years, Guizhou Province's local debt has shown characteristics such as continuous growth in scale, heavy regional debt burden, differentiated debt pressure among cities, liquidity pressure on some urban investment enterprises, concentrated redemption of urban investment bonds, and persistent negative public opinions. Despite relatively weak debt - resolution resources, with strong policy support from the central government and increasingly diverse debt - resolution means, certain achievements have been made in debt resolution. However, issues such as high credit spreads of urban investment bonds and continuous short - term liquidity pressure on urban investment enterprises still need attention. - In the short term, with the continuous implementation of a package of debt - resolution and incremental debt - resolution policies, Guizhou, as a key province, will continue to benefit, and the liquidity risk is generally controllable within the policy protection period, but the principal and interest repayment pressure on urban investment enterprises remains high. - In the long run, debt resolution depends on the self - development of local governments and urban investment enterprises. Guizhou has obvious advantages in industries such as liquor, mineral deep - processing, digital economy, new energy, characteristic agriculture, and cultural tourism. With the construction of a modern industrial system and the improvement of high - quality development levels, Guizhou is expected to resolve its debt during development [4]. 3. Summary by Relevant Catalogs 3.1 Introduction - Guizhou is an important area in China's regional coordinated development, but due to factors such as terrain, transportation, and industrial structure, its economic aggregate ranks in the middle and lower reaches nationwide, with weak fiscal strength, heavy dependence on central subsidies, and a heavy local government debt burden. Since 2018, negative public opinions in Guizhou have attracted market attention. Under the support of policies such as the "package of debt - resolution", Guizhou has actively explored debt resolution [5]. 3.2 Debt Characteristics - **Continuous growth in local debt scale and heavy regional debt burden**: As of the end of 2024, Guizhou's local government debt balance was 1753.709 billion yuan, and the debt scale of urban investment enterprises was about 900 billion yuan. Its government debt ratio and broad - based government debt ratio rank in the upper - middle level nationwide, indicating a heavy regional debt burden [7]. - **Differentiated regional debt burden, with heavier debt burdens in Guiyang and Zunyi**: As of the end of 2024, the provincial - level government debt and urban investment enterprise debt in Guizhou accounted for less than 15% and about 11% respectively, while the debt of city (prefecture) - level, district - county - level, and park - level urban investment enterprises accounted for about 48%, 22%, and 18% respectively. The urban investment enterprise debt is mainly concentrated in Guiyang and Zunyi. Guiyang, Zunyi, and Liupanshui rely more on urban investment enterprise financing, and their broad - based government debt ratios are relatively high [9]. - **Large liquidity pressure on urban investment enterprises in some cities (prefectures)**: Although the debt structure of Guizhou's urban investment enterprises is relatively reasonable, urban investment enterprises in some areas such as Qiannan, Qiandongnan, and Tongren have small cash - like assets and large short - term debt repayment pressure [12]. - **Concentrated redemption of urban investment bonds**: The issuance of urban investment bonds in Guizhou is concentrated in Guiyang and Zunyi. The redemption scale of urban investment bonds in Guizhou increased year by year from 2021 to 2023 and then decreased significantly. However, the redemption scale of due bonds in Guiyang and Zunyi is still large [14]. - **Persistent negative public opinions**: Since 2018, non - standard negative events in Guizhou's urban investment enterprises have been the highest in the country, mainly concentrated in Zunyi and Qiannan. The number of urban investment enterprises with bill overdue in Guizhou ranked third in the country from 2022 - 2024, and as of the end of October 2025, there were still 16 enterprises in the continuous overdue list, mainly concentrated in Zunyi, Guiyang, and Liupanshui [16]. 3.3 Debt - Resolution Achievements 3.3.1 Debt - Resolution Resources - **Fiscal resources**: In 2024, Guizhou's comprehensive financial resources ranked 14th in the country, with general public budget revenue of 217 billion yuan (ranked 21st) and government - funded revenue of 231.528 billion yuan (ranked 8th). Its fiscal self - sufficiency rate is less than 35%. Although the scale of state - owned land transfer income has declined since 2021, the government - funded revenue has continued to grow. The coverage of government - funded revenue for government debt interest is at a medium - upper level in the country. As of the end of 2024, Guizhou's debt space exceeded 280 billion yuan, ranking first among key provinces [22][25]. - **Financial resources**: Since 2020, the balance of local financial institutions' deposits and loans in Guizhou has continued to grow rapidly. As of the end of 2024, the balance of local financial institutions' loans and deposits ranked 19th and 25th in the country respectively, and the loan - to - deposit ratio was the highest in the country. As of November 16, 2025, the total credit line of banks for bond - issuing enterprises in Guizhou exceeded 1 trillion yuan, and the credit lines of Guizhou Bank and Guiyang Bank accounted for more than 90% of the total. The total assets and deposits of Guizhou's city commercial banks rank 16th in the country, and their coverage of urban investment enterprise debt is at a medium level in the country [27][29]. - **Local state - owned enterprise resources**: Although the number of listed companies in Guizhou ranks relatively low in the country, the total market value is at a medium level. As of the end of September 2025, the total market value of Kweichow Moutai exceeded 1.8 trillion yuan, accounting for nearly 85% of the total market value of listed companies in Guizhou. The market value of listed companies held by local state - owned enterprises in Guizhou has a relatively high coverage of urban investment enterprise debt, but the reduction of Kweichow Moutai's equity is restricted [33]. 3.3.2 Debt - Resolution Measures - **Financial support for debt resolution**: It mainly includes debt restructuring, non - standard discounted repayment, and "unified borrowing and repayment". For example, in 2022, Zunyi Road and Bridge Construction (Group) Co., Ltd. carried out loan extension and interest - rate reduction restructuring; since 2023, there have been cases of non - standard discounted repayment in many cities in Guizhou; in February 2024, Guizhou first practiced "unified borrowing and repayment" nationwide, involving a bond amount of about 3.6 billion yuan [37][38]. - **Special refinancing bonds and special new special bonds**: In 2024, Guizhou was allocated a quota of 352.8 billion yuan for special refinancing bonds, and 800 billion yuan was arranged from new local government special bonds for five consecutive years starting from 2024 for debt resolution. Since 2024, the cumulative issuance amount of special refinancing bonds and special new special bonds in Guizhou ranks among the top in key provinces, and the early redemption amount of urban investment bonds exceeds 30 billion yuan [39]. - **Activating state - owned enterprise resources for debt resolution**: "Moutai debt resolution" is a typical case, which includes equity transfer and reduction of Kweichow Moutai, bond issuance by Moutai Group to acquire the equity of Guizhou Expressway, and financing and capital operation by the finance company to relieve the liquidity pressure of state - owned platforms [41]. - **Other methods**: These include setting up emergency funds, arranging various fiscal funds, transferring the right to state - owned asset income, and using operating income. Provincial state - owned platforms also provide support such as emergency loan transfer, credit support, and credit enhancement for urban investment enterprises [42]. 3.3.3 Debt - Resolution Performance - **Significant reduction in the debt scale of bond - issuing urban investment enterprises and improvement in the financing structure**: Since the end of 2022, the debt scale of bond - issuing urban investment enterprises in Guizhou has continued to decline. The scale of bank loans and bond financing has decreased, and the proportion of bank loans and other financing has increased to about 67% and 14% respectively, while the proportion of bond financing has decreased to about 19% [44]. - **Continuous net repayment of urban investment bonds and reduced concentrated redemption pressure**: Since 2021, urban investment bonds in Guizhou and most of its cities (prefectures) have been in a state of net repayment, with an annual net repayment scale of over 35 billion yuan from 2023 - 2024. As of the end of September 2025, the scale of outstanding urban investment bonds in Guizhou was about 138 billion yuan, and the maturity scale in the next four years is relatively balanced [47]. - **Significant narrowing of the credit spread of urban investment bonds**: Since the implementation of the package of debt - resolution plans, the credit spread of urban investment bonds in Guizhou has narrowed significantly since the end of 2023, but it is still at the highest level among key debt - resolution provinces. As of the end of October 2025, the credit spread has decreased by more than 300BP compared with the beginning of 2021. However, the cash - like assets' coverage of short - term debt has decreased, and the short - term liquidity of bond - issuing urban investment enterprises is still under pressure [49][51]. 3.4 Debt - Resolution Outlook - **Short - term outlook**: With the continuous implementation of the package of debt - resolution and incremental debt - resolution policies, Guizhou will continue to benefit, and the liquidity risk is generally controllable within the policy protection period. However, the principal and interest repayment pressure on urban investment enterprises is still large due to factors such as the contradiction between debt resolution and development, restrictions on new financing, and insufficient coverage of interest by current debt - resolution policies [55][56]. - **Long - term outlook**: Debt resolution depends on the self - development of local governments and urban investment enterprises. Guizhou has obvious advantages in industries such as liquor, mineral deep - processing, digital economy, new energy, characteristic agriculture, and cultural tourism. By building a modern industrial system and promoting high - quality development, Guizhou is expected to resolve its debt during development [57].

Report Industry Investment Rating - There is no information provided regarding the report industry investment rating. Core Viewpoints of the Report - Since the first stage of the current round of debt resolution, the orders and revenues of sample construction enterprises related to local government projects have decreased, and the collection and turnover efficiency have deteriorated. Especially, local construction state - owned enterprises with a high proportion of local government projects face relatively large short - term solvency pressure. - In the second stage of the current round of debt resolution, under the background of optimizing the central - local debt structure and establishing a long - term mechanism for preventing and resolving local government debt risks, it is expected that the overall demand structure of the construction industry will continue to adjust, and the credit levels of construction enterprises will diverge more significantly. [2] Summary According to Relevant Catalogs "One - Package" Debt Resolution Policy Review - Since 2014, China has promoted multiple rounds of local government debt resolution. The first round from 2014 - 2018 mainly included incorporating existing debts into budget management and "explicitizing" them through the issuance of replacement bonds, with a total issuance of about 12.2 trillion yuan of local government replacement bonds. The second round from 2019 - 2020 focused on the debts of counties and districts with weak fiscal strength, using replacement bonds to resolve the implicit debts of pilot counties, issuing 157.9 billion yuan of local government replacement bonds. The third round from 2020 - July 2023 used special refinancing bonds to replace local implicit debts, and some regions carried out pilot projects to eliminate implicit debts, with a cumulative issuance of 612.8 billion yuan of special refinancing bonds for implicit debt replacement and over 500 billion yuan issued in Beijing, Shanghai, and Guangdong for implicit debt elimination. - The current round of debt resolution started in July 2023. The central government put forward a "one - package debt resolution plan" with the core idea of "preserving the stock and controlling the increment". A series of policies such as "Document 35", "Document 47", "Document 14", "Document 134", and "Document 150" were successively introduced, covering aspects such as defining support policies, tightening bond - issuing policies for urban investment enterprises, controlling government investment projects, and guiding the orderly exit of financing platforms. - In 2024 - 2025, policies such as increasing the local government debt limit to replace existing implicit debts, emphasizing compliance in debt resolution, and clarifying the specific path for urban investment entities in key areas to exit the government financing platform were introduced. The policy framework involves four key dimensions: differential control of new financing, restriction of project investment scope and scale of urban investment platforms, specification of bond - issuing approval processes, and standardization of the mechanism for lifting financing restrictions after the exit of urban investment entities from the government financing platform. The debt resolution policy has shifted from emergency response to systematic governance. [4][5][8] Impact Path of the Current Round of Debt Resolution on Construction Enterprises Demand Side - Construction enterprises are highly dependent on local governments on the demand side. Local government - related projects, including infrastructure projects, urban renewal projects, and public service projects under the PPP model, have long accounted for a major share of construction enterprises' contract amounts. As of the end of June 2025, among 74 sample bond - issuing construction enterprises, 26 had an average proportion of local government - related projects in new contracts over the past three years of more than 70%, and from 2022 - 2024, the proportion of new local government - related contracts in the total new contracts of sample enterprises was between 36% - 43%. - The current round of debt resolution has led to a significant decline in construction demand in areas related to local government investment. It has imposed dual constraints of hierarchical control and policy regulation on local government investment, and squeezed the traditional infrastructure funding sources of local governments. In high - risk debt areas, new government investment projects are restricted, the approval cycle of some projects is extended, and some projects are suspended or postponed. For PPP projects, relevant policies have restricted project promotion. In addition, the decline in land transfer income, the adjustment of the use structure of special bonds, and the restart of land reserve special bonds have all affected traditional infrastructure funding. [12][13] Cash Flow Side - Construction enterprises are highly dependent on local governments on the cash flow side. Their accounts receivable are highly concentrated in the government and urban investment platforms, and they often need to advance a large amount of funds for government - related projects. The PPP projects carried out with local governments over the past decade have also occupied a significant amount of funds, and the repayment progress of PPP project financing is related to the government's payment rhythm. - The current round of debt resolution has led to a decline in the payment ability of local governments and the liquidity pressure of urban investment platforms, which has directly affected the collection of construction enterprises' project funds. The settlement and collection cycles of local government - related projects have been extended, and the proportion of progress payment has decreased significantly. In 2024, the issuance scale of urban investment bonds decreased by 17.02% year - on - year to 4.914114 trillion yuan, and the net financing turned from a net inflow of 1.144279 trillion yuan in 2023 to a net repayment of 333.294 billion yuan. In the first half of 2025, the net financing of urban investment bonds was - 178.050 billion yuan, with the net repayment scale expanding significantly year - on - year and narrowing slightly quarter - on - quarter. [16][17] Performance of the Construction Industry in the First Stage of the Current Round of Debt Resolution Newly Signed Contracts - In 2023, the newly signed contract amounts of sample enterprises in key provinces and cities related to local government projects decreased significantly due to debt resolution policies. In 2024, the overall newly signed contracts of sample enterprises related to local government projects decreased significantly, with central enterprises experiencing the largest decline and local state - owned enterprises the smallest decline. However, due to business composition, the year - on - year decline in the total newly signed contract amounts of sample central enterprises was lower than that of local state - owned enterprises. From 2023 - 2024, the year - on - year growth rates of the total newly signed contract amounts of sample enterprises related to local government projects were 2.74% and - 9.58% respectively, significantly lower than the year - on - year growth rates of the total newly signed contract amounts of sample enterprises (8.14% and - 1.07% respectively). [19][20] Revenue - In 2024, the revenues of sample construction state - owned central and local enterprises with a relatively high proportion of local government projects decreased significantly. For sample construction central enterprises from 2023 - 2024, the higher the proportion of local government projects, the lower the year - on - year growth rate of construction revenue, and the revenue growth rate decreased significantly in 2024 compared with the previous year. For sample construction local state - owned enterprises, the median year - on - year growth rates of revenues of sample enterprises with a proportion of local government projects over 70% ranked the highest and lowest in 2023 and 2024 respectively. Sample enterprises with a proportion of local government projects between 30% - 50% were mainly engaged in housing construction and infrastructure, and their construction revenues in 2024 decreased by more than 10% due to the decline in local government demand and real estate demand. [21][22] Accounts Receivable Turnover and Aging - Since 2022, the turnover speed of accounts receivable of sample construction enterprises has slowed down overall, and the turnover efficiency of local state - owned enterprises decreased significantly in 2024 due to debt resolution. From 2022 - 2024, the turnover efficiency of each group of sample enterprises showed a continuous decline, and the turnover rate of central enterprises was generally better than that of local state - owned enterprises. For sample construction central enterprises, the group with a proportion of local government projects in the range of 30 - 50% had the best performance in turnover efficiency indicators. For sample construction local state - owned enterprises, the turnover rate of the two groups with a proportion of local government projects over 50% decreased significantly, and the turnover rates of the two groups with a proportion of local government projects over 70% and less than 30% were weak in 2024, mainly affected by local debt resolution, the contraction of housing construction demand, and the lag in revenue and collection. - The proportion of accounts receivable within one year of sample central enterprises generally showed an upward trend, while that of sample local state - owned enterprises decreased overall, and the high - proportion group of local government projects decreased significantly in 2024. [23][24] Cash Flow - The sample enterprises as a whole maintained a net cash inflow from operating activities, but the coverage ratio of sales cash collection to current liabilities continued to weaken. Local state - owned enterprises with a high proportion of local government projects faced relatively large short - term solvency pressure. From 2022 - 2024, the operating cash inflow of the group of sample local state - owned enterprises with a proportion of local government projects greater than 70% continued to decline, but except for a few samples, the operating cash flow as a whole remained in a net inflow state. The coverage ratio of sales cash collection to current liabilities of sample construction enterprises continued to weaken, especially for local state - owned enterprises with a high proportion of local government projects, indicating a weakening of their collection situation as a whole. [27][28] Impact Assessment of the Policies in the Second Stage of the Current Round of Debt Resolution on the Construction Industry - The "6 - trillion - yuan" plan is expected to alleviate the squeezing of infrastructure investment funds by debt resolution. However, the decline in government fund revenues and the progress of the issuance and implementation of new special bonds have affected the growth rate of local infrastructure investment. The implementation of subsequent policies is expected to accelerate. The "6 + 4+ 2 - trillion - yuan" debt resolution plan approved in November 2024 is estimated to reduce the total implicit debt of local governments to be digested from 14.3 trillion yuan at the end of 2023 to 2.3 trillion yuan, saving about 600 billion yuan in interest expenses over five years. Although the total amount of newly issued local government special bonds in 2025 increased, the issuance progress of special bonds other than those related to debt resolution was relatively slow, and the decline in land transfer income also affected local infrastructure investment. The cumulative year - on - year growth rate of narrow - sense infrastructure investment in the first three quarters of 2025 slowed down to 1.10%, lower than 4.10% in the same period of 2024. - Under the background of optimizing the central - local debt structure and establishing a long - term mechanism for preventing and resolving local government debt risks, the central government has increased leverage, and the demand structure of the construction industry has continued to adjust. Although local government investment has been affected by debt resolution, the central government has emphasized the use of a more proactive fiscal policy. The issuance of treasury bonds and ultra - long - term special treasury bonds will support large - scale standardized projects, especially "two major" projects (major strategic implementation and key - area security capacity building). It is expected that future infrastructure investment will be more targeted at areas in line with "high - quality development" and "high social benefits", such as "two major" and new infrastructure fields. - As of the end of June 2025, the effect of the arrears - clearing action on alleviating the cash flow of bond - issuing construction enterprises was not significant. It is expected that the arrears - clearing action will accelerate in 2026, which will be beneficial to improving the cash return of the construction industry. A series of policies on arrears - clearing have been introduced, and the scope of key arrears - clearing entities has been defined. The total amount of arrears of four types of units involved in financial arrears - clearing is about 1.8 trillion yuan. Although the cash flow performance of sample construction enterprises has improved to some extent in the first half of 2025, the overall effect of arrears - clearing on cash flow is not significant. In the long run, the accounts receivable of construction state - owned central and local enterprises are expected to be recovered, and their financial statements are expected to improve. [30][34][37] Outlook on the Credit Change Trend of Construction Enterprises under the Background of Debt Resolution - The credit levels of construction enterprises will face differentiation under the background of debt resolution, and enterprises with policy resources, technological barriers, diversified and international layouts, and financial robustness are expected to dominate the market. - Enterprises with complete qualifications and diversified construction capabilities are expected to survive the cycle and develop in the long term. They can reduce risks in a single market and better cope with policy regulation and market uncertainties, and are expected to find new growth points in the field of new - quality productivity. - Enterprises with stable operation and finance are more likely to survive in the downward period of the industry. The traditional high - leverage and large - scale advance payment operation model in the industry is facing challenges, and enterprises with financial stability, sufficient capital reserves, or stable financing channels can better cope with risks and seize market opportunities. - The competition pattern will further differentiate, and regional risk differences will continue. Leading construction central enterprises are expected to maintain their competitive advantages, and state - owned construction enterprises in regions with strong financial resources or with strong competitiveness in niche markets will have better development prospects. Construction central enterprises have advantages in project acquisition, financing costs, and channels, and are expected to participate in major projects in countries and regions along the "Belt and Road". Local state - owned enterprises mainly engaged in housing construction and traditional infrastructure in regions with weak economic strength and high debt pressure will face business contraction pressure, while those in economically active and financially strong regions and enterprises with advantages in new fields will have good development opportunities. [41][42]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Since 2025, the announcements of "zeroing out" implicit debts in various regions have become more frequent, and the pace of urban investment platforms exiting the list has significantly accelerated. As of October 30, 2025, 70 regions across the country have officially announced the achievement of implicit debt zeroing out, with district - and county - level units being the main battlefield for debt resolution [1][7]. - The number of financing platforms has decreased by over 70%. Jiangsu Province has the highest number of exits, mainly district - and county - level non - bond - issuing platforms. The next stage of the "exit list" work may focus on higher - level bond - issuing entities [1][12]. - After exiting the list, the credit evaluation of urban investment platforms has entered a new stage of significant differentiation. In the short term, liquidity is crucial; in the medium term, the focus is on hematopoietic ability; in the long term, the key lies in functional positioning [3]. 3. Summary According to the Table of Contents 3.1 "One - Package Debt Resolution" Anniversary with Remarkable Achievements and Many Regions Announcing Zero Implicit Debts - Since the introduction of the "one - package debt resolution plan" in November 2024, the local debt resolution work has advanced for nearly a year. By October 30, 2025, 70 regions announced zero implicit debts, including 11 prefecture - level and 59 district - and county - level units [1][7]. - Other regions have also disclosed clear goals for zeroing out implicit debts, such as Shandong aiming for zero implicit debts by the end of 2028 and Shaoxing, Zhejiang achieving zero implicit debts by the end of 2025 [7]. 3.2 Over 70% Reduction in the Number of Financing Platforms and Their Characteristics 3.2.1 Jiangsu Province Has the Most Announced Exit - List Entities, Mainly District - and County - Level Non - Bond - Issuing Entities - As of September 2025, the number of national financing platforms and the scale of outstanding operating financial debts decreased by 71% and 62% respectively compared to March 2023. Among the 447 "exit - list" urban investment entities officially disclosed since 2022, Jiangsu accounted for nearly 70%, followed by Henan with 36, Chongqing with 29, and Qinghai with 13 [12]. - District - and county - level urban investment entities were the main body, and non - bond - issuing entities accounted for 94% [12]. 3.2.2 The Next Stage of the "Exit - List" Work May Focus on Higher - Level Bond - Issuing Entities - The current debt resolution path is to prioritize cleaning up platforms with simple debt relationships and small market impacts. Based on the fact that over 70% of financing platforms have exited, it is estimated that the implicit debts of district - and county - level urban investment in some provinces may have been mostly resolved, and the next stage may focus on higher - level bond - issuing entities [19]. 3.3 Insights into the Transformation Direction of Urban Investment from Asset - Liability Changes 3.3.1 Limited New Bond Issuance after Exiting the List, with Marginal Improvement in Bank Liquidity Support - Among the 447 entities that announced exiting the financing platform list, 420 were non - bond - issuing entities. Focusing on the 27 bond - issuing entities, as of June 30, 2025, only 4 of the 18 entities with outstanding bonds increased their bond scale compared to June 30, 2024 [23]. - According to the semi - annual report data in 2025, the short - term borrowing balance of these exit - list bond - issuing entities increased by 40.61% year - on - year, the bond balance increased slightly by 6%, and the long - term borrowing decreased slightly by 0.72%. The liquidity support from commercial banks for "exit - list" entities has improved [23]. 3.3.2 Changes in Assets and Liabilities of Urban Investment after Exiting the List - **Asset Side**: The pace of project construction has slowed down, and the asset management function has been enhanced. Urban investment enterprises have become more cautious in new project investments. The significant increase in fixed assets may be due to the injection of operating assets by local governments, aiming to enhance the platform's hematopoietic ability [2][29]. - **Liability Side**: Short - term liquidity support is prominent, and the long - term financing function needs to be restored. The growth of long - term borrowing is low. Local governments prioritize liquidity safety, and new project investments are more cautious. Special bonds have replaced some bank medium - and long - term loans to some extent [2][32]. 3.4 How to Evaluate the Credit of Urban Investment after Exiting the List 3.4.1 Market Perception Has Matured, and Valuation and Credit Qualifications Are Becoming More Differentiated - The market reaction has gone through stages from significant initial divergence and limited pricing differentiation to subsequent convergence of expectations and finally entered a new stage of significant differentiation based on individual qualifications. The future market will conduct more refined credit evaluations of exit - list entities [33]. 3.4.2 Reconstruction of the Credit Framework - Short - Term Focus on Liquidity, Medium - Term on Hematopoietic Ability, and Long - Term on Functional Positioning - **Short - term**: The key is to evaluate the thickness of the liquidity safety cushion, including the coverage of short - term debts by monetary funds, available bank credit lines, and the scale of high - quality realizable assets [37]. - **Medium - term**: The core is to examine the transformation effectiveness and independent survival ability of the platform, mainly looking at the proportion of operating business income, profit quality, and net inflow of operating cash flow [38]. - **Long - term**: The key is to determine the platform's irreplaceability in the local economic ecosystem and the sustainability of its business model. Its credit foundation will shift from "implicit government guarantee" to "endogenous value" [38].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report In Q3 2025, the infrastructure investment and financing (hereinafter referred to as "base investment") industry policies continued to develop in depth on the basis of the dual - track approach of "controlling new debts and resolving existing ones" and "promoting development". The "package debt - resolution" policy was further refined, the debt management became more standardized and transparent, the process of platform exit accelerated, and a series of policies were introduced to support the base investment enterprises in expanding effective investment and promoting transformation. The implementation of these policies effectively mitigated local government debt risks, but challenges such as the management of operating debts of base investment enterprises still remained [3][4]. Summary by Relevant Catalogs Policy Review - **"Package Debt - Resolution" Policy Deeply Refined**: As of August 2025, 4 trillion yuan of the one - time increase of 6 trillion yuan in special debt quota had been issued, and the 2 trillion yuan quota for implicit debt replacement in 2025 was basically used up. 800 billion yuan was allocated from new local government special bonds to support debt resolution. Financial debt - resolution also accelerated, and measures to clean up arrears to enterprises were strengthened. Debt management was more standardized, with stricter new bond issuance review and upgraded debt monitoring [4][6]. - **Dynamic Adjustment of High - Risk Debt Areas and Accelerated Platform Exit**: As of June 2025, over 60% of financing platforms had exited. Some provinces such as Inner Mongolia and Ningxia had achieved or were applying to exit high - risk debt areas [7]. - **Support for Base Investment Enterprises to Expand Effective Investment**: In 2025, the new special bond quota was increased to 4.4 trillion yuan, a year - on - year increase of 12.8%. As of September 30, 2025, 3.6 trillion yuan of new special bonds had been issued, completing 82% of the annual quota. A new policy - based financial instrument of 500 billion yuan was arranged, and policies to support the construction and operation of PPP stock projects were introduced [8][10]. - **Accelerated Stock Asset Revitalization and Strengthened Transformation Policy Guidance**: A series of policies were introduced to guide the industrial transformation of base investment enterprises, and local governments continued to deepen the revitalization of state - owned assets [11]. Policy Main Impacts - **Accelerated Implementation of Local Government Replacement Bonds and Mitigated Debt Risks**: As of September 30, 2025, local government new bonds had completed 81.92% of the annual quota, and replacement bonds for implicit debt had completed 99.31% of the annual quota. The scope of special bond investment expanded, which was expected to relieve the investment and financing pressure of base investment enterprises [17]. - **Tightened Supply of Urban Investment Bonds**: In the first three quarters of 2025, the total issuance of urban investment bonds decreased by 9.53% year - on - year, and the net financing was negative. The stock of urban investment bonds decreased by 6.38% compared with the end of 2024 [18]. - **Adjusted Financing Channels and Optimized Debt Structure of Base Investment Enterprises**: Under the influence of policies, the proportion of credit financing of base investment enterprises increased, while the proportion of bond financing and non - standard financing decreased [19]. - **Reduced Number of Risk Events of Base Investment Enterprises, but Attention Needed for Operating Debts and Interest Payments**: The number of non - standard risk events of base investment enterprises decreased compared with 2024, but the operating debts, interest payments, and government - occupied funds of base investment enterprises still needed attention [20]. - **Phased Achievements in "Exiting Platform" and Transformation of Base Investment Enterprises**: Since the implementation of the "package debt - resolution" policy, about 658 base investment enterprises declared themselves as "market - oriented business entities", and more than 110 base investment enterprises announced to exit the platform list in the first three quarters of 2025 [21]. Industry Development Expectations and Opportunities - **Continuous Implementation of "Package Debt - Resolution" Policy with Regional Differences**: The "package debt - resolution" policy will continue to be implemented, but there are regional differences in debt - resolution progress and risks. Future policies are expected to be more refined and differentiated [23]. - **Operating Debts to Become the Key Focus and Support for Enterprise Transformation**: As implicit debts are gradually resolved, operating debts will become the key focus. The "15th Five - Year Plan" will help base investment enterprises open up new investment spaces and promote transformation [26]. - **Accelerated Transformation of Base Investment Enterprises with Risks to Be Alerted and Attention to Government - Enterprise Relationship**: The transformation of base investment enterprises may bring compliance and credit risks. The change in the government - enterprise relationship of base investment enterprises in the post - implicit debt era needs continuous attention [29]. Conclusion The base investment industry policies continued to develop in depth, effectively mitigating local government debt risks. However, the operating debts, interest payments, and government - occupied funds of base investment enterprises still need attention. The "15th Five - Year Plan" will provide opportunities for enterprise transformation, but regional differences exist. Risks in the transformation process and changes in the government - enterprise relationship need to be continuously monitored [30][31].

Core Viewpoint - The gradual exit of local government financing platforms marks the end of an era, necessitating a transformation towards market-oriented operations for these entities [2][10]. Group 1: Exit from Government Financing Platforms - Since 2025, numerous local government financing platforms have announced their exit from government financing, with over 15 platforms making such announcements in October alone [1][2]. - The People's Bank of China and other departments issued a notice in August 2025, mandating the complete exit of local government financing platforms by June 2027 [1][2]. - As of September 26, 2025, 114 local government financing platforms have officially announced their exit, with Shandong leading with 28 exits [2][3]. Group 2: Policy and Market Dynamics - The "One Package Debt Relief" policy has been a driving force behind the structured exit of financing platforms, with clear timelines and standards established [2][3]. - The exit process is influenced by both policy enforcement and the internal need for financing platforms to transition towards market-oriented operations [3][4]. Group 3: Transformation and New Business Models - Financing platforms are encouraged to enhance their self-sustaining capabilities by shifting focus from traditional infrastructure projects to market-oriented businesses that generate continuous cash flow [10][11]. - The restructuring process involves consolidating core business areas, expanding into new market opportunities, and effectively managing existing assets to generate revenue [11][12]. - The transition from reliance on government credit to independent market operations is crucial for the sustainability of these platforms [10][11]. Group 4: Financial Communication and Debt Management - Effective communication with financial institutions regarding existing debts is essential during the exit process, ensuring that all stakeholders are informed and agreements are reached [5][6]. - The management of existing operational debts must be handled carefully, utilizing strategies such as debt restructuring and asset optimization to maintain financial credibility [5][6]. Group 5: Ongoing Relationship with Local Governments - Despite exiting government financing platforms, the relationship between these entities and local governments remains significant, necessitating a clear delineation of responsibilities [6][7]. - The support from local governments is expected to continue, as these platforms still play vital roles in regional development [7][8]. Group 6: Regulatory Environment and Accountability - The regulatory environment has tightened around local government financing, with increased scrutiny on hidden debts and accountability for local officials [9][10]. - Recent cases of hidden debt have highlighted the need for compliance with national policies, reinforcing the urgency for financing platforms to adapt to new operational frameworks [9][10].

Core Insights - The report analyzes the changes in local government financing platforms in the context of a nearly one-year anniversary of the debt replacement policy, highlighting the increase in local government debt limits and the implications for financing resources [3]. Group 1: Local Government Financing - In November 2024, the National People's Congress approved a resolution to increase the local government debt limit by 6 trillion yuan to replace hidden debts, adding to the 8 trillion yuan allocated annually from new local government bonds for five years, resulting in a total increase of 10 trillion yuan in debt resources for local governments [3]. Group 2: Industry Performance - The report provides a performance overview of various industries, with non-ferrous metals leading with a 66.3% increase over the past year, followed by power equipment at 50.1% and steel at 25.0% [1]. - Conversely, the media and social services sectors showed declines of -7.8% and -6.9% respectively over the same period [1]. Group 3: Company-Specific Insights - Ankerui (300286.SZ) is positioned as a leader in microgrid energy management, with projected net profits of 250 million yuan, 320 million yuan, and 420 million yuan for 2025-2027, reflecting growth rates of 45%, 31%, and 30% respectively [5]. - Jiamaojiu (09922.HK) is expected to optimize its store count and improve performance through a new store model, with projected revenues of 5.668 billion yuan, 6.063 billion yuan, and 6.331 billion yuan from 2025 to 2027 [6]. - Xiaogoods City (600415.SH) reported a 100.52% increase in net profit for Q3 2025, with expectations of continued growth in net profits of 4.240 billion yuan, 5.761 billion yuan, and 6.914 billion yuan from 2025 to 2027 [8].