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Fundamental View
AS OF 11 Mar 2026While Toyota raised its FY26 operating profit guidance for the second straight quarter based primarily on a revised currency forecast along with lower material costs and expense/cost reduction initiatives, the margin forecast is well below its 10% FY25 result. Toyota’s lower profitability is primarily related to tariff impacts that are expected to be a 290 bp drag on its profit margin this year. While the FY26 operating margin forecast is also below Moody’s 10% downgrade trigger, we expect Moody’s and rating agencies to remain patient owing to the fact tariff mitigation initiatives take years to implement in the capital-intensive automotive industry.
Business Description
AS OF 11 Mar 2026- Toyota Motor Corp. (TMC) engages in the manufacture and sale of motor vehicles and parts. It operates through the following segments: Automotive, Financial Services, and All Other. The Automotive segment designs, manufactures, assembles and sells passenger cars, minivans, trucks, and related vehicle parts and accessories. Toyota is also involved in the development of intelligent transport systems. The Financial Services segment offers purchase or lease financing to Toyota vehicle dealers and customers. It also provides retail leasing through lease contracts purchased by dealers. The company was founded by Kiichiro Toyoda on August 28, 1937, and is headquartered in Toyota, Japan.
- Toyota Financial Services Corporation (TFSC), a wholly owned subsidiary of TMC, oversees the management of Toyota's finance companies worldwide. Toyota Motor Credit Corporation (TMCC) is the company’s principal financial services subsidiary in the United States. Under terms of the credit support agreement between TFSC and TMCC, TFSC agrees to: (1) maintain 100% ownership of TMCC; (2) cause TMCC and its subsidiaries to have a tangible net worth of at least $100,000; (3) make sufficient funds available to TMCC so that it will be able to service the obligations arising out of its own bonds, debentures, notes and other investment securities and commercial paper. The terms of the credit support agreement between TMC and TFSC are very similar to the terms of the TFSC and TMCC credit support agreement.
Risk & Catalysts
AS OF 11 Mar 2026Toyota lowered its FY26 vehicle production and consolidated vehicle sales targets by 50k units (0.5%) each to 9.95 million, with lower production volumes anticipated in Japan because of delays in quality inspections, weather-related interruptions, and equipment challenges; targets still represent growth versus FY25 (+3% production, +4% sales).
Management boosted its FY26 sales revenue forecast by 2% to ¥50.0 tn and raised the FY26 operating income forecast by 12% to ¥3.8 tn based primarily on its revised currency forecast, along with cost reduction initiatives, lower material costs, and slightly lower costs for labor, R&D, and depreciation; FY26 operating income is still 21% lower than FY25.
Management maintained its FY26 tariff cost at ¥1.45 tn (the biggest driver of lower FY26 operating income) while currency is expected to represent a headwind; Effective April 1, 2026, CEO Koji Sato will assume the position of Vice Chairman and Chief Industry Officer, while CFO Kenta Kon will become President and CEO. We view these changes favorably as they reflect a recognition of the fast-changing competitive landscape of the global automotive industry.
Key Metric
AS OF 11 Mar 2026| JPY bn | FY22 | FY23 | FY24 | FY25 | LTM F3Q26 |
|---|---|---|---|---|---|
| Automotive Revenue | 28,606 | 33,777 | 41,081 | 42,996 | 44,828 |
| EBIT | 2,519 | 2,486 | 4,890 | 4,047 | 3,400 |
| EBIT Margin | 8.0% | 6.7% | 10.8% | 8.4% | 7.1% |
| EBITDA | 3,526 | 3,671 | 6,159 | 5,408 | 4,770 |
| EBITDA Margin | 11.2% | 9.9% | 13.7% | 11.3% | 9.8% |
| Total Liquidity | 15,864 | 10,090 | 12,401 | 11,595 | 11,595 |
| Net Debt | (1,719) | (2,825) | (4,025) | (3,355) | (3,355) |
| Total Debt | 2,580 | 2,724 | 2,868 | 2,736 | 2,736 |
| Gross Leverage | 0.7x | 0.7x | 0.5x | 0.5x | 0.6x |
| Net Leverage | -0.5x | -0.8x | -0.7x | -0.6x | -0.7x |
CreditSight View Comment
AS OF 20 Mar 2026We reiterate our Underperform recommendation on notes of Toyota Motor Co. and Toyota Motor Credit Corporation based primarily on relative value, although we consider the Toyota bond complex to be a relatively safe haven for long-term investors.
Recommendation Reviewed: March 20, 2026
Recommendation Changed: May 09, 2025
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Republic of the Philippines
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Fundamental View
AS OF 11 Mar 2026Nissan trimmed FY25 guidance for Japan and Europe while maintaining North America forecasts and raising China projections. Operating profit outlook increased on stronger Re: Nissan cost savings and favorable currency revisions. Despite near-term automotive losses and negative F1H26 free cash flow, management targets sustainable automotive profit by FY27, supported by increased NEV mix in China and US hybrid launches.
Nissan’s bonds outperformed HY and BB indices by 18bp and 13bp respectively. Trading 30bp wide to BB but 70bp tight to HY, spreads could tighten towards BB on sustained momentum. We upgrade to Outperform on solid Re: Nissan execution, US reshoring, and improving fundamentals.
Business Description
AS OF 11 Mar 2026- Nissan, with headquarters in Yokohama, Japan, is a leading global automotive manufacturer with a market presence in many countries around the globe. The company’s growth investments are focused primarily on Japan, North America, and China, core markets with large profit pools in which Nissan has a meaningful market share. The company’s business in China is conducted through a joint venture with Dongfeng Motor Corporation.
- Nissan’s Sales Financing segment supports the sale of its vehicles by providing financing solutions to its customers and dealers. To enhance their creditworthiness, Nissan maintains keepwell (support) agreements with its wholly owned financial subsidiaries including Nissan Motor Acceptance Corporation (NMAC) in the United States and Nissan Financial Services (NFS) in Japan.
- The Renault-Nissan-Mitsubishi Alliance was established in 1999 to enhance member company scale in product development and raw material purchasing. The alliance includes equity participation, which led to Nissan holding ownership stakes in Renault (15% non-voting) and Mitsubishi (34%) and Renault holding an ownership stake in Nissan (43%). The Alliance’s automobile production volume is the third largest globally behind Toyota and Volkswagen.
Risk & Catalysts
AS OF 11 Mar 2026Management lowered FY25 retail sales and production volume outlooks by 1.5% and 3.0% due to weaker than expected performance in Japan and Europe, but maintained its North America forecast and raised its China forecast—its two biggest profit drivers.
Management initiated FY26 net loss guidance at ¥650 bn, predominantly from non-cash accounting changes, owing to the evolving tariff environment. Management expects positive automotive free cash flow in F4Q25 and F2H25, although full-year automotive free cash flow is expected negative.
Management raised its FY25 operating loss forecast from ¥(275) bn to ¥(60) bn driven by cost reduction actions and manufacturing efficiencies (¥105 bn improvement in Monozukuri initiatives), partially offset by weaker sales performance (-¥50 bn) and currency headwinds (¥80 bn).
Key Metric
AS OF 11 Mar 2026| JPY bn | FY21 | FY22 | FY23 | FY24 | LTM F3Q25 |
|---|---|---|---|---|---|
| Revenue | 7,393 | 9,573 | 11,524 | 11,371 | 10,776 |
| EBIT | (78) | 218 | 394 | (78) | (360) |
| EBIT Margin | (1%) | 2% | 3% | (1%) | (4%) |
| EBITDA | 211 | 535 | 745 | 286 | (77) |
| EBITDA Margin | 2.9% | 5.6% | 6.5% | 2.5% | (1.6%) |
| Total Liquidity | 3,601 | 3,658 | 4,196 | 4,272 | 2,749 |
| Net Debt | (728) | (1,213) | (1,546) | (1,498) | (959) |
| Total Debt | 973 | 687 | 468 | 661 | 1,191 |
| Gross Leverage | n/m | 1.3x | 0.6x | 2.3x | n/a |
| Net Leverage | -3.4x | -2.3x | -2.1x | -5.2x | 12.5x |
CreditSight View Comment
AS OF 20 Mar 2026We upgrade our recommendation on Nissan Motor and Nissan Motor Acceptance Co. notes from Market perform to Outperform based on relative value, the company’s weak but improving near-term automotive profit and free cash flow outlook, solid Re: Nissan cost savings execution, and improved retail sales trends in the US and China.
Recommendation Reviewed: March 20, 2026
Recommendation Changed: February 13, 2026
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Hyundai Motor
Republic of the Philippines
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Fundamental View
AS OF 10 Mar 2026HCA’s volume metrics and EBITDA margins consistently best industry peers, primarily due to strong operational efficiency and an inpatient/outpatient focus within large, healthy markets.
HCA’s credit metrics have improved in recent years and leverage sits near the low end of management’s target net leverage range of 2.75-3.75x.
HCA benefits from substantial financial flexibility provided by strong FCF generation and easy access to the capital markets. The company also maintains sufficient liquidity with a well-laddered maturity schedule.
Business Description
AS OF 10 Mar 2026- HCA operates more than 190 hospitals with ~50k beds and 121 freestanding surgery units (as of YE25). The company operates in 19 states and England, but ~50% of its hospitals are located in Texas and Florida. HCA is the largest for-profit hospital operator in the US by revenue. HCA also purchased 41 urgent care centers in Texas from FastMed for an undisclosed amount.
- HCA has gone private twice since its initial public offering in 1969, most recently in 2006. During periods of private ownership the company has engaged in debt-financed special dividends. HCA returned to public ownership in 2011.
- HCA has been an active consolidator in the industry, acquiring General Health Services, Columbia Healthcare, Hospital Affiliates, and Healthcare Corp, among others. In rationalizing its offering of services and market focus, HCA has sold or spun-off hospital groups such as LifePoint, Triad, and HealthTrust.
Risk & Catalysts
AS OF 10 Mar 2026We see some risk of choppy operating performance tied to an unwind of acuity and payor mix benefits experienced through COVID.
HCA is exposed to certain provisions in the Big Beautiful Bill which could result in insured losses and lower supplemental payments.
HCA guides to strong FY26 growth, including revenue growth of 3.5% and adjusted EBITDA growth of 2.8% (at the midpoints).
HCA’s board recently authorized an additional $10 bn share repurchase program. The company has ~$750 mn of share repurchase authorization remaining (as of YE25). Management expects to complete the majority of their existing programs in 2026.
Key Metric
AS OF 10 Mar 2026| $ mn | Y20 | Y21 | Y22 | Y23 | Y24 | LTM 4Q25 |
|---|---|---|---|---|---|---|
| Revenue | 51,533 | 58,752 | 60,233 | 64,968 | 70,603 | 75,600 |
| SWB | 23,874 | 26,779 | 27,685 | 29,487 | 31,170 | 32,859 |
| Supplies | 8,369 | 9,481 | 9,371 | 9,902 | 10,755 | 11,367 |
| Adj. EBITDA | 10,037 | 12,644 | 12,067 | 12,726 | 13,882 | 15,566 |
| Total Debt | 31,004 | 34,579 | 38,084 | 39,593 | 43,031 | 46,492 |
| Gross Leverage | 3.1x | 2.7x | 3.2x | 3.1x | 3.1x | 3.0x |
| Interest Coverage | 6.2x | 8.4x | 7.3x | 6.7x | 7.2x | 7.1x |
CreditSight View Comment
AS OF 27 Jan 2026We maintain an Outperform recommendation on HCA. HCA remains the strongest hospital operator in the for-profit space, exhibiting operational stability and strong FCF generation. These strengths should help the company weather policy-related headwinds in the years ahead. We see HCA as a good alternative to some of the widest BBB-rated credits in our IG pharma universe, namely Biogen and Viatris.
Recommendation Reviewed: January 27, 2026
Recommendation Changed: May 02, 2018
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Fundamental View
AS OF 10 Mar 2026Pfizer has ample financial resources, strong ability to de-lever, and adequate M&A capacity at current ratings.
Pfizer faces meaningful losses of exclusivity come the middle part of the decade. Management has guided to a ~$17 bn negative revenue impact from patent losses in 2025-30, including for drugs such as Xeljanz (2025), Eliquis (2026), Ibrance (2027), and Xtandi (2027).
Management expects to offset this impact with growth from pipeline development and contributions from newer acquisitions.
Business Description
AS OF 10 Mar 2026- Pfizer is a research-based, global biopharma company with focuses in immunology, metabolic disease, oncology, vaccines, neuroscience, and rare disease.
- PFE has completed a number of major acquisitions and divestitures in recent years. In 2009, the company acquired Wyeth for $68 bn, increasing its size by approximately 50%. Subsequently, PFE completed the acquisitions of Hospira ($17 bn), Biohaven ($12 bn), Arena ($6 bn), Medivation ($14 bn), Seagen ($43 bn), and Metsera ($7 bn), among others.
Risk & Catalysts
AS OF 10 Mar 2026Pfizer has been active with portfolio repositioning, executing the separations of its Consumer Healthcare and Established Brands (Upjohn) businesses in recent years. These transactions have resulted in weaker diversification and greater exposure to patent expirations.
Due to upcoming patent losses, Pfizer has been extremely active with M&A. The company completed the $43 bn acquisition of Seagen in December 2023, which resulted in well over a turn of leverage deterioration. More recently, PFE acquired Metsera for $7 bn.
Pfizer recently reorganized its hospital and biosimilar businesses, potentially leading to a formal separation. We suspect that divestiture proceeds would be used primarily for business development.
Key Metric
AS OF 10 Mar 2026| $ mn | Y20 | Y21 | Y22 | Y23 | Y24 | LTM 4Q25 |
|---|---|---|---|---|---|---|
| Revenue | 41,651 | 81,288 | 101,175 | 59,553 | 63,627 | 62,579 |
| Gross Profit | 33,167 | 50,467 | 66,831 | 34,599 | 45,776 | 46,512 |
| R&D | (8,709) | (10,360) | (11,428) | (10,679) | (10,822) | (10,437) |
| SG&A | (11,597) | (12,703) | (13,677) | (14,771) | (14,730) | (13,794) |
| Adj. EBITDA | 18,027 | 33,354 | 46,153 | 22,904 | 25,781 | 26,317 |
| Total Debt | 39,836 | 38,436 | 35,829 | 71,888 | 64,351 | 64,795 |
| Gross Leverage | 2.2x | 1.2x | 0.8x | 3.1x | 2.5x | 2.5x |
| Interest Coverage | 13.1x | 26.6x | 46.8x | 39.2x | 10.1x | 12.7x |
CreditSight View Comment
AS OF 03 Feb 2026We prefer Abbvie at modestly tighter spreads given its more obvious organic growth trajectory and similar net leverage. That said, we would take Pfizer over Merck (U/P) at similar spreads given the latter’s product concentration risk and more sizeable M&A needs.
Recommendation Reviewed: February 03, 2026
Recommendation Changed: September 15, 2025
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.Bank of Philippine Islands
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: BPIPM 5 30
- Indicative Yield-to-Maturity (YTM): 4.40%
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Fundamental View
AS OF 05 Mar 2026Bank of the Philippine Islands (BPI) is the 3rd largest bank in the Philippines by assets.
We view the bank as too big to fail given its systemic importance in the country. There is also a strong probability of support from the government in addition to its main shareholder, the Ayala Corporation if needed.
BPI has a long history, and we view it as a fundamentally sound bank with strong and improved profitability, and comfortable liquidity. Capital management however has become less conservative, and while asset quality is largely kept in check, we are keeping an eye on strong growth in the non-wholesale book.
Business Description
AS OF 05 Mar 2026- The history of the Bank of the Philippine Islands traces back to 1851. It is the oldest bank in the Philippines and South East Asia. It was first listed on the Philippine Stock Exchange in 1971, and became a universal bank in 1982.
- Ayala Corporation, one of the biggest conglomerates in the country, became BPI's dominant shareholder in 1969. Ayala Corp still holds a 49% stake in the bank.
- BPI has been acquisitive across the years. It merged with Far East Bank and Trust Company and acquired Ayala Insurance Holdings Corp in 2000. It acquired DBS Bank Philippines in 2001 and Prudential Bank Philippines in 2005. DBS was a shareholder of BPI but exited its position in 2013. More recently in January 2024, it completed the acquisition of the Gokongwei conglomerate's Robinsons Bank.
- The bank is predominantly a corporate bank with 70% of its loan book outstanding to corporates, and the balance to MSME and retail as of 4Q25. Management is keen to skew the loan mix further towards MSME and retail.
Risk & Catalysts
AS OF 05 Mar 2026Direct impact from US tariffs is limited given that the Philippines is not a major goods exporter, but there will be second order effects from a slowdown in regional and global growth.
The recent flood controls graft scandal has dampened public infra spending and business sentiment, and private investment, which will weigh on GDP and corporate loan growth at least through 1H26. A prolonged hit to sentiment would exacerbate these effects and strain asset quality.
BSP rate cuts to support growth will pressure the NIM, but BPI’s NIM has been more resilient, driven by a stronger pivot toward higher-yielding retail/MSME lending, RRR reductions, and reduced liquidity drag. We see asset quality risks from the strong unsecured retail and MSME expansion, but BPI’s wholesale-focused book (70% of total loans) provides comfort and provisioning capacity is strong.
Any rating downgrade of the Philippine sovereign would negatively impact BPI.
Key Metric
AS OF 05 Mar 2026| PHP mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| PPP ROA | 2.01% | 2.41% | 2.52% | 2.78% | 6.22% |
| Reported ROA (Cumulative) | 1.10% | 1.59% | 1.93% | 1.98% | 2.00% |
| Reported ROE (Cumulative) | 8.4% | 13.1% | 15.4% | 15.1% | 14.5% |
| Net Interest Margin | 3.30% | 3.59% | 4.09% | 4.31% | 4.59% |
| CET1 Ratio | 15.8% | 15.1% | 15.3% | 13.9% | 13.9% |
| Total Equity/Total Assets | 12.1% | 12.2% | 12.4% | 13.0% | n/a |
| NPL Ratio | 2.49% | 1.76% | 1.84% | 2.13% | 2.18% |
| Provisions/Loans | 0.91% | 0.58% | 0.22% | 0.32% | 1.59% |
| Liquidity Coverage Ratio | 221% | 195% | 207% | 159% | 148% |
| Net Stable Funding Ratio | 155% | 149% | 154% | 146% | 134% |
Our View
AS OF 06 Mar 2026BPI is the third largest bank in the Philippines with a long history. Its traditionally conservative approach has led to a loss of loan market share in the past, as well as a lower NIM than BDO and MBT. Recent brisk expansion in higher yielding retail and MSME loans has strongly improved profitability levels and driven NIM expansion despite rate cuts. While asset quality has slipped with the loan mix shift, it remains acceptable. However, we are watchful of risks from the strong growth in the non-wholesale book as provision reserves have been pared down to lower levels than peers. Still, we are overall comfortable with BPI given the large wholesale book (70% of loans), strong provisioning capacity and comfortable liquidity. We have BPI on U/P from an RV standpoint.
Recommendation Reviewed: March 06, 2026
Recommendation Changed: May 21, 2025
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Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.Commonwealth Bank of Australia
- Sector: Financial Services
- Sub Sector: Banks
- Region: Australia
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Fundamental View
AS OF 05 Mar 2026CBA has a very strong franchise in Australia; it is the leader in the retail market and is making good progress in challenging NAB in business banking.
It has been the best managed of the Australian banks for many years, outperforming peers. It lost some of its luster in the latter part of the 2010s due to regulatory and compliance lapses amid charges of complacency, but has since improved into a better institution.
Its capital and liquidity position is robust, and asset quality is strong.
Business Description
AS OF 05 Mar 2026- Originally established by the Australian government in 1911, CBA functioned for some time as Australia's central bank until the establishment in 1959 of the Reserve Bank of Australia. It remained under government ownership until the early 1990s, after which it underwent a transformation from a bureaucratic public sector bank into a widely respected commercial organisation.
- Over the past couple of decades, CBA consolidated its position as the leading bank in Australia with a 24-28% share in household deposits and lending, helped by its acquisition of Bank of Western Australia during the 2008 crisis.
- In New Zealand it owns ASB Bank, but otherwise has been selling non-core assets, including its life insurance business.
Risk & Catalysts
AS OF 05 Mar 2026CBA’s financial health is closely linked to the Australian economy, in particular retail credit quality, mainly housing loans. Rate hikes, to reduce inflation resulting from growth and a tight labour market, will temper growth, but it is still expected to be higher by recent Australian standards, at 2.3% in 2026 and 2.1% in 2027; unemployment is expected to be flat at 4.4%. The bank expects one more rate hike to 4.10%, and for RBA to hold steady at that rate to end-2027.
Earnings/NIMs are under pressure from strong mortgage market and deposit competition, but the bank anticipates continued tailwinds from a higher replicating rate which would hopefully provide sufficient offset.
Business banking growth continues to be stellar and highly profitable. Overall credit growth is expected to continue at 6-8% p.a. over this and next calendar years.
Key Metric
AS OF 05 Mar 2026| AUD mn | Y23 | Y24 | Y25 | 1H26 |
|---|---|---|---|---|
| Return on Equity | 14.0% | 13.6% | 13.5% | 14.0% |
| Total Revenues Margin | 2.2% | 2.2% | 2.2% | 1.1% |
| Cost/Income | 43.7% | 45.0% | 45.7% | 45.9% |
| APRA CET1 Ratio | 12.2% | 12.3% | 12.3% | 12.3% |
| International CET1 Ratio | 19.1% | 19.1% | 20.9% | 18.3% |
| APRA Leverage Ratio | 5.1% | 5.0% | 4.7% | 4.7% |
| Impairment Charge/Avg Loans | 0.1% | 0.1% | 0.1% | 0.0% |
| Gross Impaired Loans/Total Loans | 0.8% | 1.0% | 1.1% | 1.0% |
| Liquidity Coverage Ratio | 131% | 136% | 130% | 132% |
| Net Stable Funding Ratio | 124% | 116% | 115% | 117% |
CreditSight View Comment
AS OF 11 Feb 2026CBA operates as a well-oiled machine in the Australian banking market and is our preferred name in the space. It has the leading position in mortgages and deposits, and is challenging NAB in business banking. An AUSTRAC penalty in 2018 damaged its reputation and remediation costs impacted earnings for a couple of years. The bank sold a number of its non-bank business and equity investments to simplify and focus on its core domestic businesses. It has the highest NIM amongst the Aussie banks. Business banking growth has been stellar and highly profitable. Asset quality is comfortable. Its seniors trade tight but at an acceptable level, while its Tier 2s trade fair. It had a recent dip in performance in 1Q26 but 2Q26 was strong.
Recommendation Reviewed: February 11, 2026
Recommendation Changed: October 05, 2016
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.Security Bank (PH)
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: SECBPM 5.5 29
- Indicative Yield-to-Maturity (YTM): 4.694%
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Fundamental View
AS OF 04 Mar 2026Security Bank has historically been a wholesale focused bank. Rapid retail expansion pre-pandemic led to a large asset quality hit when COVID-19 struck. The bank completed revamping its underwriting processes at end-2021 and has resumed brisk growth in the retail book since.
The bank had a less well-established deposit franchise than most peers, resulting in a heavy hit to NIMs when rates rose this cycle. This has led it to focus aggressively on growing the higher yielding retail and MSME segments, the latter via forming a new business banking segment in 2022.
Previously high capital ratios have hence fallen; the CET1 ratio is a low 12-13%.
MUFG is a 20% shareholder of Security Bank.
Business Description
AS OF 04 Mar 2026- Security Bank was established in 1951 and obtained its universal banking license from the BSP in 1994. It is today the 9th largest bank in the Philippines.
- The bank is majority-owned by longtime owner Frederick Y. Dy (23.7%) and MUFG Bank (20%), which acquired its stake in April 2016.
- SB Finance, a joint venture between Security Bank and Thailand's Bank of Ayudhya (Krungsri), a consolidated subsidiary of MUFG, was launched in 2019. The unit is a consumer finance company formed to engage in the unsecured loans business in the Philippines, focusing on the lower mass retail segment.
- Security Bank's loan portfolio is 32% consumer, 4% MSME and 64% wholesale at 4Q25. The consumer and MSME book is roughly split mortgages (44%), auto loans (23%), credit card (23%) and small business loans (10%).
Risk & Catalysts
AS OF 04 Mar 2026Any rating downgrade of the Philippine sovereign would have a negative impact on Security Bank.
RRR cuts and rates coming down, along with brisk growth in higher yielding but riskier retail and MSME (business banking), are supporting the NIM well. Asset quality indicators however have unsurprisingly started to weaken with a jump in credit costs. We remain cautious given the relatively thin reserve cover and capital buffer. Management is now exercising some prudence in retail loan growth after the emergence of stress in credit cards.
Capital ratios have fallen due to brisk RWA growth and now trail peers. We view current levels as low, but do not rule out capital support from MUFG if needed.
A prolonged hit to sentiment from the flood controls scandal would exacerbate the slowdown in GDP and credit growth, and pressure asset quality.
Key Metric
AS OF 04 Mar 2026| PHP mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Net Interest Margin | 4.43% | 4.23% | 4.49% | 4.73% | 4.66% |
| ROA | 1.0% | 1.4% | 1.1% | 1.1% | 1.0% |
| ROE | 5.6% | 8.4% | 7.0% | 8.1% | 7.9% |
| PPP ROA | 2.30% | 2.17% | 1.97% | 2.18% | 2.38% |
| CET1 Ratio | 19.1% | 16.1% | 15.3% | 12.9% | 12.3% |
| Total Equity/Total Assets | 17.88% | 14.94% | 15.62% | 12.50% | 12.91% |
| Gross NPL Ratio | 3.94% | 2.95% | 3.36% | 2.85% | 2.89% |
| Net LDR | 85.7% | 83.0% | 88.8% | 84.6% | 74.9% |
| Liquidity Coverage Ratio | 150% | 144% | 158% | 178% | 200% |
| Net Stable Funding Ratio | 138% | 122% | 131% | 130% | 146% |
CreditSight View Comment
AS OF 06 Mar 2026Security Bank has historically been a wholesale focused bank. Rapid retail expansion leading up to the pandemic led to a large asset quality fallout. It was conservative for a few years, but resumed aggressive growth in higher yielding but riskier retail and MSME segments to counter NIM pressure. This along with improving funding costs from a declining rate environment has supported margins. Asset quality however is showing stress from the brisk growth in riskier segments as we had anticipated, leading it to start exercising prudence in retail loan growth starting 2H25. We remain cautious about asset quality strains given the relatively thin capital buffer (12.3% CET1 ratio).
Recommendation Reviewed: March 06, 2026
Recommendation Changed: May 21, 2024
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.Baidu
- Sector: Media and TelecommunicationsTechnology
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 04 Mar 2026We maintain our Underperform recommendation on Baidu following its weak 4Q25 results. Revenues fell amid the continued contraction in online ads, while EBITDA margin fell YoY due to an increased revenue mix of the lower-margin AI cloud segment and weak monetization of its search engine; gross leverage further weakened and net cash narrowed. Baidu trades in-line to Asia A corp and 9 bp tighter than Asia A- corp which we view as rich; this is because we expect its debt metrics to remain weak compared to its historical levels over the next 12-24 months given the challenging outlook of its advertising segment and weak margins of its AI cloud segment. In our view, Baidu should be trading closer to A- corps. We also think Baidu is expensive compared to BABA and TENCNT.
Business Description
AS OF 04 Mar 2026- Founded in 2000, Baidu started out as a search engine business and began its development into artificial intelligent (AI) since 2010.
- Baidu general business is the main revenue driver of the company (79% of 4Q25 revenues); this includes its AI-powered businesses (34% of 4Q25 revenues) through AI cloud infrastructure (ie. enterprise cloud), AI applications (Baidu Wenku, Baidu Drive, automonous ride-hailing via Apollo Go), and AI-native marketing services; the remaining core revenues (45% of total) are derived from its legacy business and others which includes traditional advertising services across Search, Feed and other properties.
- iQiyi accounts for the remaining revenues of Baidu; iQIYI is an online video platform with a content library that includes licensed movies, television series, cartoons, and other programs; it generate revenues through online ads and membership subscription fees.
- Baidu launched ERNIE bot in Mar-23, a generative AI chatbot powered by ERNIE, Baidu's in-house foundation model.
- Baidu has a market capitalization of RMB 284.9 bn as of 4 March 2026.
Risk & Catalysts
AS OF 04 Mar 2026Any regulatory clampdowns abroad and domestically (e.g. potential US investment ban, antitrust rules, data security and personal information protection laws) may adversely affect the business of Baidu. The interpretation of Chinese laws and regulations involves some degree of uncertainty.
There are regulatory risks given the corporate structure which uses variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers (ICPs).
Baidu has made significant investments into long-term AI-related projects, which may take time to turn profitable. A potential escalation of the US chip restriction could have a material negative impact its AI related business (ie. cloud, ernie bot, autonomous driving).
Intense competition in online ads segment may pressure topline and EBITDA margin.
Key Metric
AS OF 04 Mar 2026| RMB bn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 29.7% | 28.5% | 25.0% | 22.5% | 26.0% |
| Debt/Total Equity | 42.2% | 39.8% | 33.4% | 29.0% | 35.1% |
| Debt/Total Assets | 24.1% | 23.4% | 20.8% | 18.5% | 21.6% |
| Gross Leverage | 3.3x | 2.8x | 2.2x | 2.0x | 3.2x |
| Interest Coverage | 8.2x | 11.4x | 12.1x | 13.8x | 10.9x |
| EBITDA Margin | 22.6% | 26.8% | 29.2% | 29.3% | 23.4% |
CreditSight View Comment
AS OF 27 Feb 2026We maintain our Underperform recommendation on Baidu following its weak 4Q25 results. Revenues fell amid the continued contraction in online ads, while EBITDA margin fell YoY due to an increased revenue mix of the lower-margin AI cloud segment and weak monetization of its search engine; gross leverage further weakened and net cash narrowed. Baidu trades in-line to Asia A corp and 9 bp tighter than Asia A- corp which we view as rich; this is because we expect its debt metrics to remain weak compared to its historical levels over the next 12-24 months given the challenging outlook of its advertising segment and weak margins of its AI cloud segment. In our view, Baidu should be trading closer to A- corps. We also think Baidu is expensive compared to BABA and TENCNT.
Recommendation Reviewed: February 27, 2026
Recommendation Changed: August 21, 2025
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Fundamental View
AS OF 04 Mar 2026Stryker benefits from a leading position in orthopedics as well as strong franchises in medical surgery and neurotechnology. The company’s sales and EBITDA growth trajectory bests most of its medical device peers.
Stryker has exhibited discipline with capital allocation. Following larger bolt-on deals in 2022 (Vocera, $3.1 bn) and 2020 (Wright Medical, $5.4 bn) management prioritized debt reduction.
We expect SYK to manage leverage in the low- to mid-2x range as it addresses its M&A needs/wants in the aftermath of the Inari purchase.
Business Description
AS OF 04 Mar 2026- Stryker (SYK) is a global manufacturer of implants used in joint replacement & trauma surgeries; surgical equipment & surgical navigation systems; endoscopic & communications systems; patient handling & emergency medical equipment; neurosurgical, neurovascular & spinal devices among other products. Stryker generated $25.1 bn of revenues in 2025 (versus $22.6 bn in 2024).
- SYK maintains two operating segments: MedSurg & Neurotechnology (62% of 2025 consolidated revenues) and Orthopaedics & Spine (38%).
- SYK's recent sizable acquisitions include: Inari Medical ($4.9 bn) in 2025, which increased its exposure to peripheral vascular diseases; Vocera ($3.1 bn enterprise value) in 2022, which increased its digital care coordination and communication categories; Wright Medical ($5.6 bn including debt) in 2020, which increased its exposure to the trauma & extremities end market; and K2M Group ($1.4 bn) in 2018, which boosted the spine portfolio.
Risk & Catalysts
AS OF 04 Mar 2026Stryker is exposed to medical procedure volumes. While volumes have been positive, owing in part to the resumption of procedures deferred during COVID, volatility could result from economic uncertainty in the year ahead.
Stryker’s M&A interest has leaned bolt-on in nature over the past several years, including the acquisitions of Inari in 2025 ($4.9 bn), Vocera in 2022 ($3.1 bn) and Wright Medical in late 2020 ($5.4 bn).
In April 2025, SYK sold its US Spinal Implants business to Viscogliosi Brothers to create a newly formed company (named VB Spine, LLC).
SYK recently held its investor day, which covered expectations for 2026-28. Management expects organic sales growth to be at the ‘high end’ of MedTech and guides to operating margin expansion of ~150 bp through 2028. M&A remains Stryker’s top capital allocation priority.
Key Metric
AS OF 04 Mar 2026| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 4Q25 |
|---|---|---|---|---|---|
| Revenue | 17,108 | 18,449 | 20,498 | 22,595 | 25,116 |
| Gross Profit | 10,968 | 11,578 | 13,058 | 14,440 | 16,065 |
| R&D | (1,235) | (1,454) | (1,388) | (1,466) | (1,623) |
| SG&A | (6,427) | (6,455) | (7,121) | (7,685) | (8,651) |
| Adj. EBITDA | 4,753 | 4,755 | 5,356 | 6,142 | 7,064 |
| Total Debt | 12,479 | 13,048 | 12,995 | 13,597 | 15,859 |
| Gross Leverage | 2.6x | 2.7x | 2.4x | 2.2x | 2.2x |
| Interest Coverage | 14.1x | 14.1x | 15.0x | 15.5x | 12.1x |
CreditSight View Comment
AS OF 13 Mar 2026We maintain our Outperform recommendation on Stryker. SYK exhibits organic growth on strong procedural volumes and relatively healthy capital equipment spending. At current spreads, we like SYK versus more conservative peers, ABT and MDT, both of which carry higher leverage with less impressive organic growth. SYK offers attractive spread pickup versus both comps.
Recommendation Reviewed: March 13, 2026
Recommendation Changed: May 03, 2022
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Search topics about wealth insights and investments.BDO Unibank
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: BDOPM 4.375 30
- Indicative Yield-to-Maturity (YTM): 4.26%
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Fundamental View
AS OF 03 Mar 2026BDO Unibank (BDO) is the largest bank in the Philippines in terms of assets & market share.
Given its size and systemic importance, BDO is considered too big to fail and is strongly likely to be supported by its controlling shareholder SM Investments, as well as the Philippine government in times of stress.
BDO is widely viewed as the soundest bank in the country given its strong fundamentals, well-diversified businesses, and good management.
Business Description
AS OF 03 Mar 2026- BDO Unibank was established as Acme Savings Bank in 1968, and was then acquired by SM Investments in 1976. It became a commercial bank in 1994 and a universal bank in 1996.
- BDO was listed in May 2002. SM Investments remains the bank's largest shareholder with a 41% stake.
- BDO has expanded through a series of M&As. Among its key transactions, it merged with Dao Heng Bank Philippines in 2001, Banco Santander Philippines in 2003, UOB Philippines in 2005, Equitable PCI Bank in 2007, GE Money Bank in 2009, Citibank Savings, DB Trust and Real Bank in 2014, One Network Bank in 2015 (the largest rural bank in the Philippines), and RB Pandi's banking business in 2019. It also acquired the insurance business of Generali in the Philippines in 2016.
- BDO has the largest distribution network in the country and is ranked the largest bank in terms of consolidated resources, total assets, loans, deposits and trust funds under management.
- Its loan book was split 49% large corporates, 26% middle market, and 25% consumer at 4Q25. 39% of the consumer book comprised mortgages, 31% credit cards, 13% auto loans and the remaining personal loans (13%) and others (5%).
Risk & Catalysts
AS OF 03 Mar 2026Direct impact from US tariffs is limited given that the Philippines is not a major goods exporter, but there is likely to be some second order effects from a slowdown in regional and global growth.
The recent public infrastructure graft scandal has dampened public infra spending, consumer and business sentiment, and private investment, which will weigh on GDP and corporate loan growth at least through 1H26. A prolonged hit to sentiment would exacerbate these effects and strain asset quality. BSP rate cuts to support growth will pressure the NIM, but this is being mitigated by a loan mix shift towards retail.
We see few asset quality risks for BDO given a comfortable NPL cover and an acceptable CET1 ratio, as well as BDO’s large corporates book (~50% of total loans) and good underwriting track record.
Any rating downgrade of the Philippine sovereign would negatively impact BDO.
Key Metric
AS OF 03 Mar 2026| PHP mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| NIM | 4.05% | 4.14% | 4.37% | 4.35% | 4.31% |
| Reported ROA (Cumulative) | 1.2% | 1.5% | 1.7% | 1.8% | 1.7% |
| Reported ROE (Cumulative) | 10.4% | 13.0% | 15.2% | 15.1% | 14.4% |
| Equity/Assets | 11.7% | 11.3% | 11.5% | 11.8% | 11.8% |
| CET1 Ratio | 13.6% | 13.4% | 13.8% | 14.1% | 13.8% |
| NPL ratio | 2.8% | 2.0% | 1.9% | 1.8% | 1.7% |
| Provisions/Loans | 0.72% | 0.64% | 0.59% | 0.46% | 0.43% |
| PPP ROA | 2.1% | 2.3% | 2.7% | 2.5% | 2.4% |
| Liquidity Coverage Ratio | 145% | 141% | 123% | 132% | 121% |
| Net Stable Funding Ratio | 124% | 124% | 124% | 122% | 118% |
CreditSights View
AS OF 06 Mar 2026BDO is the largest bank in the Philippines. Management is well-regarded, the business is well-diversified and it is the market leader in many business lines. The NIM has peaked with the turn in policy rates, but non-interest income is close to a third of operating income given good fee generation and overall core profitability is strong. We remain comfortable with BDO given the large corporate book and comfortable NPL cover, as well as underwriting track record, which provide comfort around the recently robust growth in retail loans. Capital is also acceptable with the CET1 ratio at 13.8%. However, we have BDO on Underperform from an RV standpoint.
Recommendation Reviewed: March 06, 2026
Recommendation Changed: January 07, 2026
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