Group 1 - The "Debt Resolution Policy" has made significant progress, with 2025 replacement bond issuance plans reaching CNY 19,042.34 billion, achieving 95.21% of the annual target [1][14] - Cumulative debt resolution funds since 2024 amount to CNY 63,225.88 billion, representing 51.4% of the hidden debt balance that needs to be resolved before 2028 [1][17] - Several regions, including Guangdong, Beijing, and Shanghai, have declared completion of the "full area hidden debt clearance" goal, with Inner Mongolia being the first to exit the key debt resolution provinces [1][18] Group 2 - The political bureau meeting on July 30 emphasized the need to actively and steadily resolve local government debt risks and strictly prohibit the addition of hidden debts [2] - By the end of 2024, it is expected that 40% of local government financing platforms will have exited the financing platform sequence, with a potential overall exit rate of 70-80% by the end of 2025 [2][10] - The progress in resolving operational debts is linked to the exit of financing platforms, with a projected 25% resolution rate by the end of 2024 [3] Group 3 - The transformation of urban investment is underway, driven by both policy direction and the subjective need for development and financing [4] - The overall progress of the "Debt Resolution Policy" indicates that the debt resolution cycle is in its latter half, with credit risks expected to remain controllable [5] Group 4 - The issuance of special new bonds and replacement hidden debt bonds has been significant, with CNY 8,505.78 billion disclosed for special new bonds in 2025 [1][14] - The "6+4+2" trillion debt resolution plan is the most substantial measure in recent years, aimed at addressing hidden debts and preventing local government debt risks [14][17]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - "One - package debt - resolution policy" has been in place for two years, and debt resolution has entered the second half. The credit risk is expected to remain controllable during the debt - resolution cycle, and more attention should be paid to the creditworthiness development in the post - debt - resolution cycle [2][3] - As of now, the local government's implicit debt resolution work is expected to have passed the halfway mark. By the end of 2025, the overall progress of platform delisting in the country may reach 70 - 80%, and the resolution progress of operating debts is also expected to exceed half by the end of the year [2][3][39] Summary According to the Table of Contents 2024 - present Debt Resolution Actions - Since the "one - package debt - resolution" proposal, a series of policies centered around the "Document 35" have been introduced, including "Document 47", "Document 14", "Document 134", "Document 150", "Document 226", and "Document 99", which have continuously refined and supplemented the debt - resolution requirements [6][7] Implicit Debt Resolution Progress - In 2025, the issuance of replacement bonds continued to advance, with a disclosed issuance plan of 19042.34 billion yuan and an annual progress of 95.21%. The issuance scale of special new special bonds reached 8505.78 billion yuan [2][8] - Since 2024, a total of 63225.88 billion yuan of debt - resolution funds have been implemented, accounting for 51.4% of the implicit debt balance to be resolved before 2028. As of now, Guangdong, Beijing, Shanghai, 22 prefecture - level cities, and 113 counties have announced the achievement of the goal of "zero implicit debt across the region", and Inner Mongolia announced its withdrawal from the key debt - resolution provinces on July 29 [2][9][13] Delisting Progress - As of the end of 2024, 40% of local government financing platforms had exited the financing platform sequence. As Inner Mongolia withdrew from the key provinces, Chongqing, Guangxi, Liaoning and other places are also actively seeking delisting. It is expected that by the end of 2025, the overall delisting progress in the country may reach 70 - 80% [3][15][16] Operating Debt Disposal - By the end of 2024, the scale of operating financial debts of financing platforms was 14.8 trillion yuan, a decrease of about 25% compared with the beginning of 2023. The bond issuance interest rate has significantly decreased, and high - interest debts in bank loans and non - standard debts are mainly reduced through three ways. The proportion of bank loans in the interest - bearing debt structure has increased rapidly, and the non - standard debts have been significantly reduced [20][23][26] - In 2024, the overall interest payment scale of urban investment was 3.05 trillion yuan, with a growth rate of only 2.06%. The comprehensive financing cost of urban investment platforms was 4.72%, a decrease of about 7bp compared with 2023 [29] Industrial Transformation - The ways of establishing industrial platforms include setting up a holding parent company, separating or integrating industrial - attribute subsidiaries, and developing industrial businesses on the original basis of entities with low urban investment attributes [33] - The injected operating assets depend on local resource endowments. Industrial transformation can also be achieved through equity investment and mergers and acquisitions of listed companies [36] Summary - The "one - package debt - resolution policy" continues to advance, and debt resolution has entered the second half. The credit risk is expected to remain controllable during the debt - resolution cycle, and more attention should be paid to the creditworthiness development in the post - debt - resolution cycle [3][41]