Fitch Ratings has maintained Yankuang Energy Group's (HKG:1171, SHA:600188) BB+ long-term foreign currency issuer default rating and senior unsecured rating, according to a Monday release.

The company's ratings closely follow the creditworthiness assessment of parent Shandong Energy Group, given its "high" strategic and operational incentives to help its subsidiary, Fitch said.

Yankuang Energy accounted for 67% of the group's EBITDA last year, with Fitch expecting the subsidiary to contribute above 70% of coal sales volume this year with the consolidation of Northwest Mining.

The subsidiary also pays notable dividends to its parent while also sharing the same people in the board.

However, Fitch views the parent as having "low" legal incentives to support the subsidiary as the latter is expected to obtain financing without the former's guarantee.

The subsidiary's profit per ton could drop to 172 yuan in 2025 amid dampened prices and a narrow space for cost reductions, although coal sales volume could i crease to 148mt from 130mt last year, Fitch said.

The company's EBITDA net leverage could jump to 4.3x in 2025 amid a rise in net debt to 134 billion yuan, Fitch said.

Meanwhile, EBITDA could regress to 32 billion yuan from 48 billion yuan in 2024 given a lower margin.

The company's revenue focus on thermal coal, generating high carbon footprint, could subject it to lower medium-term demand, although the near-term rating impact is limited since the decline would likely be slow, Fitch said.

Changes in the parent's credit profile assessment due to shifts in EBITDA net leverage, the parent's funding capacity or likelihood of government support could prompt future rating actions for Yankuang Energy, the rating agency said.