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Fundamental View
AS OF 11 Mar 2026Honda reiterated FY26 profit guidance reflecting 300 bp YoY profit margin compression to below 3%, falling below downgrade triggers set by S&P and Fitch, both of which have negative outlooks. The weak profit outlook prompted management to initiate a fundamental review of its loss-making Automobile business, expected to complete in FY27. Management tapped CFO Eiji Fujimura as CEO of American Honda Motor to improve profitability. Honda notes currently trade flat to the IG Corporate index, which we view as rich given negative outlooks by two rating agencies. We reiterate our Underperform recommendation.
Business Description
AS OF 11 Mar 2026- Honda Motor Co., Ltd. engages in the manufacture and sale of automobiles, motorcycles, and power products. It operates through the following segments: Automobile, Motorcycle, Financial Services, and Power Product and Other Businesses. The Automobile segment manufactures and sells automobiles and related accessories. The Motorcycle segment handles all-terrain vehicles, motorcycle business, and related parts. The Financial Services segment provides financial and insurance services.
- American Honda Finance Corporation (AHFC) is a wholly-owned subsidiary of American Honda Motor Co., Inc. (AHM or the Parent). Honda Canada Finance Inc. (HCFI) is a majority-owned subsidiary of AHFC. Non-controlling interest in HCFI is held by Honda Canada Inc. (HCI), an affiliate of AHFC. AHM is a wholly-owned subsidiary and HCI is an indirect wholly-owned subsidiary of Honda Motor Co., Ltd. (HMC). Honda Motor Co. (HMC) maintains Keep Well (support) agreements with its North American finance subsidiaries, AHFC and HCFI. Under the Keep Well agreements, HMC agrees to (1) maintain at least 80% ownership in AHFC and HCFI, (2) ensure AHFC and HCFI maintain a positive net worth, and (3) ensure both AHFC and HCFI have sufficient liquidity to meet their debt payment obligations.
Risk & Catalysts
AS OF 11 Mar 2026Management affirmed FY26 wholesale unit guidance for all segments. The Automobile guidance, previously reduced by 8%, reflects a 10% YoY decline driven by a 5% North America decrease (semiconductor supply shortage) and 22% Asia decline (Chinese OEM competition).
American Honda management announced a target of 4% US automotive retail sales growth in calendar year 2026 to 1.5 mn units, supported by recently redesigned models and lower-than-average inventory entering the year.
Management reiterated its FY26 consolidated operating profit forecast of ¥550 bn with an operating margin of 2.6%, down 300 bp YoY. Full-year tariff impacts are expected at ¥310 bn (~US$2.0 bn), down from the original ¥450 bn estimate.
Key Metric
AS OF 11 Mar 2026| $ mn | FY22 | FY23 | FY24 | FY25 | F3Q26 |
|---|---|---|---|---|---|
| Total Company Earning Assets | 71,105 | 65,363 | 74,626 | 83,112 | 86,672 |
| Cash and Investments | 2,607 | 1,544 | 1,670 | 4,052 | 2,808 |
| Excess Liquidity | 9,607 | 8,544 | 8,670 | 11,052 | 9,808 |
| Unsecured Debt | 38,026 | 33,410 | 41,566 | 48,363 | 51,380 |
| Secured Debt | 8,888 | 6,927 | 9,351 | 12,384 | 14,433 |
| Total Debt | 46,914 | 40,337 | 50,917 | 60,747 | 65,813 |
| Allowance % Retail Rece. | 0.58% | 0.71% | 0.80% | 0.80% | 0.91% |
| Allowance / Net Charge-offs | 3.75x | 2.41x | 1.72x | 1.48x | 1.36x |
| Net Charge-offs % Avg. Receivable | 0.15% | 0.29% | 0.52% | 0.57% | 0.67% |
| 30+ Day Delinquency Rate | 1.1% | 1.2% | 1.2% | 1.4% | 1.8% |
CreditSight View Comment
AS OF 08 Apr 2026We reiterate our Underperform recommendation on Honda Motor Co. and American Honda Finance Corporation notes based on relative value, its weak consolidated operating profit outlook, and concerns about restoring its automobile business to profitability over the intermediate term.
Recommendation Reviewed: April 08, 2026
Recommendation Changed: May 15, 2025
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Fundamental View
AS OF 11 Mar 2026Honda reiterated FY26 profit guidance reflecting 300 bp YoY profit margin compression to below 3%, falling below downgrade triggers set by S&P and Fitch, both of which have negative outlooks. The weak profit outlook prompted management to initiate a fundamental review of its loss-making Automobile business, expected to complete in FY27. Management tapped CFO Eiji Fujimura as CEO of American Honda Motor to improve profitability. Honda notes currently trade flat to the IG Corporate index, which we view as rich given negative outlooks by two rating agencies. We reiterate our Underperform recommendation.
Business Description
AS OF 11 Mar 2026- Honda Motor Co., Ltd. engages in the manufacture and sale of automobiles, motorcycles, and power products. It operates through the following segments: Automobile, Motorcycle, Financial Services, and Power Product and Other Businesses. The Automobile segment manufactures and sells automobiles and related accessories. The Motorcycle segment handles all-terrain vehicles, motorcycle business, and related parts. The Financial Services segment provides financial and insurance services. The Power Products and Other Businesses segment offers power products and relevant parts.
- American Honda Finance Corporation (AHFC) is a wholly-owned subsidiary of American Honda Motor Co., Inc. (AHM or the Parent). Honda Canada Finance Inc. (HCFI) is a majority-owned subsidiary of AHFC. Non-controlling interest in HCFI is held by Honda Canada Inc. (HCI), an affiliate of AHFC. AHM is a wholly-owned subsidiary and HCI is an indirect wholly-owned subsidiary of Honda Motor Co., Ltd. (HMC). Honda Motor Co. (HMC) maintains Keep Well (support) agreements with its North American finance subsidiaries, AHFC and HCFI. Under the Keep Well agreements, HMC agrees to (1) maintain at least 80% ownership in AHFC and HCFI, (2) ensure AHFC and HCFI maintain a positive net worth, and (3) ensure both AHFC and HCFI have sufficient liquidity to meet their debt payment obligations.
Risk & Catalysts
AS OF 11 Mar 2026Management affirmed FY26 wholesale unit guidance for all segments. The Automobile guidance, previously reduced by 8%, reflects a 10% YoY decline driven by a 5% North America decrease (semiconductor supply shortage) and 22% Asia decline (Chinese OEM competition).
American Honda management announced a target of 4% US automotive retail sales growth in calendar year 2026 to 1.5 mn units, supported by recently redesigned models and lower-than-average inventory entering the year.
Management reiterated its FY26 consolidated operating profit forecast of ¥550 bn with an operating margin of 2.6%, down 300 bp YoY. Full-year tariff impacts are expected at ¥310 bn (~US$2.0 bn), down from the original ¥450 bn estimate.
Key Metric
AS OF 11 Mar 2026| JPY bn | FY22 | FY23 | FY24 | FY25 | LTM F3Q26 |
|---|---|---|---|---|---|
| Revenue | 11,967 | 14,167 | 17,434 | 18,509 | 18,261 |
| EBIT | 741 | 612 | 1,219 | 899 | 429 |
| EBIT Margin | 6.2% | 4.3% | 7.0% | 4.9% | 2.0% |
| EBITDA | 1,334 | 1,294 | 1,964 | 1,630 | 1,145 |
| EBITDA Margin | 11.1% | 9.1% | 11.3% | 8.8% | 5.8% |
| Total Liquidity | 4,612 | 4,926 | 6,150 | 5,368 | 5,809 |
| Net Debt | (2,481) | (2,751) | (3,762) | (3,216) | (3,171) |
| Total Debt | 837 | 803 | 863 | 646 | 1,132 |
| Gross Leverage | 0.6x | 0.6x | 0.4x | 0.4x | 1.0x |
| Net Leverage | -1.9x | -2.1x | -1.9x | -2.0x | -2.8x |
CreditSight View Comment
AS OF 08 Apr 2026We reiterate our Underperform recommendation on Honda Motor Co. and American Honda Finance Corporation notes based on relative value, its weak consolidated operating profit outlook, and concerns about restoring its automobile business to profitability over the intermediate term.
Recommendation Reviewed: April 08, 2026
Recommendation Changed: May 15, 2025
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Fundamental View
AS OF 11 Mar 2026We expect the credit profile of Sinopec, which is one of the three Chinese national oil companies (NOCs) to continue to be underpinned by its strategic role in China’s energy security and the resulting strong government support.
That said, credit metrics could weaken in FY26 depending on the trajectory and duration of the Middle East conflict and the resulting impact on crude oil and gas feedstock costs, which may compress downstream and chemical margins.
For clarity, our analysis is based on the financials of HKEX‑listed China Petroleum & Chemical Corporation (Sinopec Corp; 386.HK), which we use as a proxy for the credit profile of its parent, China Petrochemical Corporation, the obligor of the Group’s outstanding $ bonds (ticker: SINOPE).
Business Description
AS OF 11 Mar 2026- Sinopec Group is a Chinese integrated oil and gas (O&G) company and one of the largest globally and domestically, with businesses spanning exploration & production (E&P), refining, chemicals, and marketing & distribution.
- In 9M25, Sinopec Corp’s external operating revenues were mainly from marketing and distribution, which accounted for ~52.2% of total sales revenue and chemicals (~14.1%), while refining and E&P accounted for ~5.8% and ~5.6%, respectively. The corporate and others segment made up the remaining ~20.5%, including import and export trading, R&D, and centralized management activities.
- The refining segment purchases crude oil from both third parties and the Company’s E&P operations, processing it into refined petroleum products. Most gasoline, diesel, and kerosene are transferred internally to the marketing and distribution segment, while part of the chemical feedstock is supplied to the chemicals segment. The marketing and distribution segment procures refined products from internal and external suppliers and distributes to domestic customers through Sinopec’s nationwide wholesale and retail network.
- In 9M25, Sinopec’s total oil and gas production reached 394 mmboe, representing a 2.2% YoY increase, including 211 mn barrels of crude oil and 1,099 bn cubic feet of natural gas (+4.9% YoY). The average realized price for crude oil declined to $66.4/bbl (‑13.3% YoY), while the realized price for self‑produced natural gas eased to $7.14/thousand cubic feet (‑4.5% YoY).
Risk & Catalysts
AS OF 11 Mar 2026Risks: Weaker-than-expected domestic demand, higher-than-expected crude oil and feedstock costs, particularly in a prolonged US-Iran conflict or broader Mideast escalation, elevated inventory losses, capex overruns or sustained high investment intensity, geopolitical and sanction-related headline risks.
Catalysts: inflow into China $ bonds, stronger-than-expected recovery in chemical product demand, sustained easing in feedstock or crude oil costs, policy-driven support for SOEs.
Key Metric
AS OF 11 Mar 2026| RMB bn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Total Debt/Capitalization | 25.6% | 27.5% | 31.5% | 33.0% | 35.4% |
| Net Debt/Capitalization | 7.6% | 16.3% | 19.8% | 23.0% | 23.8% |
| Total Debt/Total Equity | 34.5% | 38.0% | 46.1% | 49.3% | 54.8% |
| Total Debt/Total Assets | 16.7% | 18.3% | 21.7% | 23.0% | 24.8% |
| Total Debt/EBITDA | 1.2x | 1.5x | 2.0x | 2.3x | 2.8x |
| Net Debt/EBITDA | 0.4x | 0.9x | 1.3x | 1.6x | 1.9x |
| EBITDA/Gross Interest | 20.1x | 16.1x | 14.5x | 13.0x | 11.6x |
| EBITDA Margin | 9.4% | 7.0% | 6.8% | 6.9% | 6.9% |
CreditSight View Comment
AS OF 11 Mar 2026We affirm our Market perform recommendation on Sinopec. A-rated Chinese state-owned enterprises (SOEs), including Sinopec are trading tight due to a lack of new supply and as investors fly to quality amid macro uncertainties in China. We continue to prefer AA-rated Korean quasi-sovereign names for safe carry (like KOROIL, KORGAS, KEPCO) and higher-beta Chinese SOEs for spread pickup.
Recommendation Reviewed: March 11, 2026
Recommendation Changed: May 03, 2021
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Hyundai Motor
Republic of the Philippines
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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 2026Management 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.
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.
Toyota 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).
Key Metric
AS OF 11 Mar 2026| $ mn | FY22 | FY23 | FY24 | FY25 | F3Q26 |
|---|---|---|---|---|---|
| Total Company Earning Assets | 117,659 | 120,018 | 129,707 | 132,385 | 132,976 |
| Cash and Investments | 7,670 | 6,398 | 8,570 | 10,769 | 6,808 |
| Total Liquidity | 36,070 | 33,498 | 37,570 | 37,569 | 36,208 |
| Unsecured Debt | 82,288 | 78,949 | 88,083 | 90,028 | 85,716 |
| Secured Debt | 26,864 | 32,736 | 34,337 | 37,717 | 36,562 |
| Total Debt | 109,152 | 111,685 | 122,420 | 127,745 | 122,278 |
| Allowance % Retail Rece. | 1.66% | 1.83% | 1.81% | 1.81% | 1.63% |
| Allowance / Net Charge-offs | 6.68x | 3.03x | 2.32x | 2.06x | 1.95x |
| Net Charge-offs % Avg. Receivable | 0.26% | 0.63% | 0.82% | 0.88% | 0.84% |
| 30+ Day Delinquency Rate | 1.8% | 2.3% | 2.6% | 2.5% | 2.6% |
CreditSight View Comment
AS OF 24 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 24, 2026
Recommendation Changed: May 09, 2025
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Republic of the Philippines
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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 07 Apr 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: April 07, 2026
Recommendation Changed: May 09, 2025
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Hyundai Motor
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 07 Apr 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: April 07, 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 08 Apr 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: April 08, 2026
Recommendation Changed: September 15, 2025
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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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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 24 Mar 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: March 24, 2026
Recommendation Changed: October 05, 2016
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