Moody’s on China: Corporate revenue to grow modestly in 2017, but deleveraging to remain slow

The US-based Moody’s Investors Service published its latest report on China's  2017 non-financial corporates sector outlook, noting that corporate revenue is stabilizing, leverage is expected to remain elevated.

Key Quotes:

“The continued robust GDP growth in China in 2017 and stabilizing commodity prices will drive modest revenue growth and improve profitability for the Chinese non-financial corporates”

“Impact will vary by sector”

“Revenue will grow modestly in 2017 from a low base in 2016, but we expect deleveraging will remain slow, especially for overcapacity sectors due to still elevated investment needs" 

"At the same time, refinancing risk is manageable for the sector as a whole for the rated portfolio, because onshore bonds account for the majority of bonds maturing through 2017 and onshore issuance remains a supportive funding channel for Chinese corporates”