Report Industry Investment Rating - Not provided Core Viewpoints - In 2025, Sichuan Province's implicit debt resolution progress exceeded the scheduled progress, with the resolution progress by the end of 2025 not less than 65%. In 2026, the scale of "fiscal debt resolution" by the Sichuan provincial government may decline, and the focus of debt resolution will shift to the resolution of operating debt risks [4][5][6]. Summary by Directory 1. Estimation of the Province-wide Debt Resolution Progress - By leveraging the central special debt resolution policy and local self - debt resolution, Sichuan Province's implicit debt resolution progress exceeded the scheduled progress in 2025. As of the end of 2023, the national implicit debt balance was 14.3 trillion yuan. Based on the one - time implicit debt replacement refinancing special bond quota obtained by Sichuan Province (344.4 billion yuan), the implicit debt scale in Sichuan Province at the end of 2023 was estimated to be about 820 billion yuan [4]. - Besides issuing government bonds to replace implicit debts, Sichuan Province also resolved implicit debts through various means such as fiscal budgets and asset revitalization. By estimating based on Chengdu, as of the end of 2025, Sichuan Province's implicit debt scale did not exceed 287.8 billion yuan, and the implicit debt resolution progress was not less than 65%. By the end of 2025, Chengdu's implicit debt was nearly 80% resolved, and the reduction rate of financing platforms reached 86% [5]. 2. Key Points of Debt Resolution in Sichuan Province in 2026 - As the debt resolution work achieved certain results, in 2026, the scale of "fiscal debt resolution" by the Sichuan provincial government may decline, and the focus of debt resolution will shift to the resolution of operating debt risks. The prevention and resolution of operating debt risks formed during the market - oriented operation of urban investment companies will become the key point of local debt resolution in the next stage [6]. - Sichuan Province will "take multiple measures to resolve the operating debt risks of local government financing platforms and strictly prohibit the illegal addition of implicit debts" as the key work of debt risk resolution in 2026 [7]. - From 2023, Sichuan's urban investment companies have made useful attempts in resolving operating debt risks. The operating debt scale of Sichuan's urban investment companies is relatively high in cities such as Chengdu (about 50% of the province), Mianyang (4.3%), Yibin (3.7%), Meishan (3.2%), and Luzhou (2.7%). The resolution of operating debts can be achieved through introducing strategic investors, market - oriented debt - to - equity swaps, using operating income, and revitalizing existing assets [9].