Reuters: S&P text summary – Winsway Coking Coal Holdings Ltd.

Mongolian coking coal producers have a cost advantage in China, in our view. Winsway has expanded its logistic centers and processing plants over the past year to improve handling capacity. We expect that competition for end customers and for railway capacity will intensify as more players start importing coal from Mongolia. However, we believe that potential competition from state-owned enterprises would decrease if Aluminum Corp. of China Ltd. (foreign currency BBB/Negative/–; cnA-) completes its planned acquisition of Winsway. Winsway’s financial risk profile is “aggressive”, in our view. We believe the company can maintain good financial strength for the rating level, although its debt leverage has increased after the GCC acquisition. We expect Winsway’s Mongolian coking coal import business to continue to perform satisfactorily in the next 12 months. We forecast the company’s ratio of total debt to EBITDA at 3x-3.5x, and the ratio of funds from operations to total debt at or slightly more than 20% in the next 12 months. However, the coal mining business and an uncertain global economy could weaken Winsway’s cash flow. To read the full article, click hereS&P text summary – Winsway Coking Coal Holdings Ltd.

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