OREANDA-NEWS. S&P Global Ratings today affirmed its 'BB+' long-term corporate credit rating on Kingboard Chemical Holdings Ltd. with a stable outlook. At the same time, we affirmed our 'cnBBB+' long-term Greater China regional scale rating on the company. We then withdrew all the ratings at Kingboard's request. Kingboard is a China-based manufacturer of laminates, printed circuit boards, and chemical products, and also engages in property development.

The affirmed rating prior to the withdrawal reflected our view that Kingboard will maintain its market position in the laminate and printed circuit board segments. The company's low cost base and diversified product offerings in these segments should partly offset the weakening chemical business due to sluggish commodity prices and China's slowing economy.

In addition, Kingboard's financial leverage will likely be stable in the coming 12 months. This is because the company has been prudent in acquiring land bank over the past two years and has had strong contracted sales of newly developing property projects in the first half of 2016. We expect Kingboard to use the proceeds from property sales to repay its outstanding debt and lower its debt.

The stable outlook at the time of the withdrawal reflected our view that Kingboard will maintain its market position and profitability over the next 12 months. We anticipate that the company's debt leverage will improve moderately as it recognizes sales from property development and maintains its prudent capital expenditure and debt-funded land bank acquisition strategy. This should result in Kingboard's ratio of funds from operations to debt staying at 20%-30% over the next 12 months.