Tianrun Dairy's credit rating maintained at AA with stable outlook

China Chengxin International Credit Rating Co., Ltd. (CCXI) has maintained its AA credit rating for Xinjiang Tianrun Dairy Co., Ltd., with a stable outlook, highlighting the company's leading position as a comprehensive dairy enterprise in Xinjiang, bolstered by increased production capacity, high milk self-sufficiency, and differentiated product offerings. CCXI also notes the supportive role of its shareholders and access to diverse financing channels, including the successful issuance of CNY 990 million in convertible bonds. Despite these strengths, CCXI cautions that the cyclical pressures within the dairy industry have impacted Tianrun Dairy's operating performance and raises concerns about sales and channel expansion, new capacity absorption, financial leverage, and food safety. While Tianrun's revenue increased slightly in 2024, profitability weakened due to market conditions and impairment losses. CCXI affirmed the AA rating for the "Tianrun Convertible Bonds", reflecting the company's overall creditworthiness and the bond's unsecured nature.