S&P Global Ratings has changed the outlook on Zhongsheng Group Holdings (HKG:0881) to negative from stable while maintaining the BBB- long-term issuer credit and issue ratings, according to a Thursday release.

The negative outlook stems from a slower rebound in the company's credit metrics due to industry volatility, the shift to electric vehicle stores and operational bottlenecks, S&P said.

S&P believes the company's move toward EV brands would need skillful execution amid challenging conditions.

The rating agency also sees greater (difficulties) in achieving debt leverage that is lower than 3x.

S&P will assess the company's business model in terms of concentration in its income sources given China's changing auto retailing space.