Moody's downgrades China Automation

Moody's Investors Service said it downgraded China Automation Group Ltd.'s corporate family and senior bond ratings to B1 from Ba3. The outlook is stable.

The downgrade follows the company's profit warning for its 2014 full-year results and primarily reflects China Automation's weaker growth prospects and Moody’s concerns over the quality of its receivables, the agency said.

Moody’s said China Automation's B1 corporate family rating continues to reflect its leading position in providing safety and critical control systems to the Chinese petrochemical and railway sectors.

These strengths are counterbalanced by its small scale and weak and volatile cash flows due to its high working capital requirements, the agency said.

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