Our report on Guangxi urban investment platform (Part I) released on November 29, 2021 It comprehensively combs the economic, financial, debt and debt process of 14 prefecture level cities under the jurisdiction of Guangxi. This report starts from the micro level and makes a detailed analysis on the fundamentals of major cities such as Nanning and Liuzhou and the business division, government support, debt structure and external guarantee of the core platforms in the city.
Nanning is the city with the most concentrated bond issuance and urban investment in Guangxi. (1) From the perspective of regional economy, Nanning is the capital of Guangxi Province, the central city of Beibu Gulf Urban Agglomeration, and the transportation hub connecting the access to the sea in Southwest China. It governs seven districts, four counties and one county-level city. It is the only city in the province with a permanent population of more than 8 million. In 2020, the urbanization rate was 68.9%, ranking the second in the province, second only to Liuzhou. In 2020, the GDP was 472.63 billion, ranking the second in the province Liuzhou is 48.8% higher. In recent years, Nanning’s economic growth has fluctuated. Its total economic output and per capita income level rank in the middle and lower reaches of the national provincial capital cities. The advantageous industries are electronic information, biomedicine, auto parts, etc., among which there are many industries in the economic development zone and the high tech Zone. From 2019 to 2020, Nanning will achieve a general public budget revenue of 37.09 billion yuan and 37.23 billion yuan respectively, an increase of 3.3% and 0.4% at the same time. The financial self-sufficiency rate will be 47.1% and 45.4%. In 2020, Nanning will rank first in the province and 22nd in the provincial capital city. By the end of 2020, the debt balance of Nanning municipal government was 119.01 billion yuan, The debt ratio (excluding hidden debt) is 25.2%, ranking at the middle and lower level in Guangxi. (2) Nanning has many urban investment platforms. This part focuses on the five platforms with the highest amount of existing debt, including Nanning new technology, Weining investment, Nanning green port, Nanning rail and Nanning urban investment. In terms of business, Nanning rail is the only rail transit investment, financing and operation subject in the city; Weining investment and Nanning urban investment are the public utilities operation and infrastructure construction subjects in Nanning Nanjing new technology and Nanning green port are the main development bodies of Nanning high tech Zone and economic development zone respectively. The revenue composition of the five platforms is relatively diversified. In terms of equity structure, Weining investment, Nanning rail transit and Nanning urban investment are 100% owned by Nanning SASAC, and Nanning new technology and Nanning green port are respectively controlled by the Management Committee of high tech Zone and the Management Committee of economic development zone. In terms of external support, Nanning railway received relatively high government subsidies. In terms of debt replacement, according to the disclosure of the rating report, Nanning urban investment had screened the stock debt of 39.77 billion yuan before 2014. Since 2014, government debt replacement has been carried out successively, and 1.2 billion yuan of the stock debt has been included in the government implicit debt. In terms of debt structure, among the five platforms, the proportion of short-term debt of Weining investment is relatively high, reaching more than 40%, and the proportion of short-term debt of Nanning green port, Nanning rail transit and Nanning urban investment is relatively low, all below 25%. In terms of external guarantee, the external guarantee ratio of Nanning green port is slightly higher, which is 18.8% at the end of 2020, and the other platforms are less than 10%.
Other prefecture level cities in Guangxi have higher balance of urban investment bonds and relatively strong comprehensive strength. Liuzhou’s GDP scale and per capita GDP are in the first echelon of the province, with a GDP scale of more than 300 billion yuan and a per capita GDP of 76000 yuan in 2020; The financial self-sufficiency rate is at the medium level in the province, and the horizontal comparison of debt ratio is not high. From the perspective of platform status, debt structure, government enterprise relationship and business attributes in the city, Liuzhou investment and Liuzhou Dongcheng investment are relatively strong.
Risk tips: the adjustment of urban investment and financing policies exceeded expectations, and the macro-economy exceeded expectations
