Wingtech's credit rating downgraded amid business shift

China Chengxin International Credit Rating Co., Ltd. (CCXI) has downgraded Wingtech Technology's (SSE:600745) issuer rating to AA- from AA, with a stable outlook, and its "Wingtech Convertible Bonds" rating to AA. The downgrade reflects the disposal of the product integration business, reducing diversification and future revenue. The company's focus shifts to the semiconductor business, centered around acquired subsidiary Nexperia Holding B.V. The rating agency noted concerns about managing Nexperia, industry cyclicality, inclusion on entity lists, and potential goodwill impairment related to the acquisition of Nexperia. Despite the downturn, CCXI acknowledges Nexperia's industry position and semiconductor capabilities. The company posted a net loss of -CNY2.86B for 2024. Proceeds from the sale of the integration business are expected to reduce debt and leverage. CCXI believes Wingtech's credit profile will remain stable over the next 12-18 months.