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Archives: CreditSights Issuer List
China CITIC Financial Asset Management (Huarong)
- Sector: Financial Services
- Sub Sector: Banks
- Region: China
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Fundamental View
AS OF 10 Sep 2025A large impairment loss in FY20 brought CITIC AMC (formerly Huarong) to the brink of insolvency, but a state-led rescue plan provided it with liquidity support and brought its capital back above minimum requirements. CITIC has replaced the MoF as its largest shareholder. CITIC AMC remains as one of the Big 5 state-owned AMCs in China and will continue to perform national services.
On the guidance of the authorities, CITIC AMC has divested almost all of its non-core subsidiaries.
We expect its core operations to remain weak and volatile, until China’s economy is back on the upswing, residents regain confidence in the property market, and improved capital markets lead to better valuations on its securities books.
Business Description
AS OF 10 Sep 2025- China CITIC Financial Asset Management (formerly Huarong) is one of the five major state-owned asset management companies in China. It was first set up in 1999 to take over the bad debts of ICBC.
- The AMCs were originally due to be wound up after dealing with these "policy loans" that had come onto the books of the banks under government direction before their commercialisation, but the AMCs found a new role as commercial bad debt managers.
- CITIC AMC was commercialised in 2012 and completed its IPO on the HK stock exchange in 2015. Since then, it expanded its financial services to banking, financial leasing, securities & futures, trust, as well as consumer finance. However, after heavy losses in FY20, the company has divested almost all of its non-core business as directed by the authorities.
- Following the CITIC-led rescue plan and the equity transfer from the Ministry of Finance (MOF) to CITIC, CITIC has become its largest shareholder (26.46%). Other significant shareholders include MOF (24.76%), Zhongbaorongxin (18.08%), Cinda AMC (4.89%), China Life Insurance (4.50%), National Social Security Fund (3.08%), Warburg Pincus (2.57%), and ICBC Financial AM (2.44%). It was renamed to share the "CITIC" brand in Nov-23.
Risk & Catalysts
AS OF 10 Sep 2025CITIC’s support is strong (name change, investment in CEB and CITIC Ltd, subsidiary disposal, new management team, etc.) and more meaningful to the company compared to direct ownership by the government.
Derisking continues with lower property exposure, non-core businesses have largely been disposed of and the company is able to focus on its main DDA business per the guidance of the authorities.
While the company was able to deliver profit growth on the back of CITIC support and its associate interest holdings, core performance remains weak, and there could be continued volatility in the name.
AMCs may find it harder to dispose DDAs at good valuations amid a deceleration economic cycle. Longer holding periods will dampen return yields.
Key Metric
AS OF 10 Sep 2025| CNY mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| ROA | 0.10% | (2.20%) | 0.02% | 0.75% | 1.10% |
| ROE | 1.0% | (49.8%) | 3.6% | 18.4% | 21.1% |
| Total Capital Ratio | 13.0% | 15.1% | 15.1% | 15.7% | 16.0% |
| Leverage Ratio | 14.2x | 16.1x | 11.5x | 10.1x | 8.6x |
| Equity/Assets | 0.0% | 3.1% | 2.9% | 3.7% | 4.0% |
CreditSight View Comment
AS OF 02 Sep 2025CITIC AMC (ex-Huarong) continued to book profits 1H25, helped by investments in three listed SOEs. Core businesses remained weak and volatile, as the company continues to lower valuations on existing DDAs acquired many years ago. Its non-DDA financial assets also have a more volatile performance than peers. CITIC’s support is strong, derisking continues with a meaningful improvement in the provision coverage ratio, non-core businesses have all been cleared, and the company is able to focus on main DDA business per the authorities’ guidance. The capital adequacy ratio has improved meaningfully to 16%, surpassing Cinda. Disclosure remains poor. We expect it to trade ~30 bp wider than CCAMCL.
Recommendation Reviewed: September 02, 2025
Recommendation Changed: July 14, 2025
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Fundamental View
AS OF 05 Sep 2025Petron’s 1H25 results was weaker YoY; we expect Petron’s credit metrics to remain flat YoY in FY25 owing to higher capex and flat-to-slight decline % YoY EBITDA growth amid a low double-digit YoY decline in sales volume growth though partially supported by lower crude oil input costs
About two-third of its total revenues are derived from the Philippines and are indexed to Dubai crude prices, which allows for smooth cost pass-throughs and good insulation from crude price volatility.
Free cash flows are typically negative due to inventory fluctuations that outweigh low capex.
Business Description
AS OF 05 Sep 2025- Petron is the largest oil refining and retailing company in the Philippines, and the third largest player in Malaysia. It maintains a 24% market share in the Philippines (followed by Shell and Caltex) and a 20% market share in Malaysia (largest being Petronas), based on total fuel sales volumes.
- Petron has a total refining capacity of 268k barrels/day (bpd) and accounts for about 30% of the Philippines' fuel needs. Its petroleum refining facilities include the Limay Refinery in Bataan, Philippines (capacity of 180k bpd; 67% of total) and the Port Dickson Refinery in Negeri Sembilan, Malaysia (capacity of 88k bpd; remaining 33% of total).
- Petron's refineries process crude oil into a full range of petroleum products including gasoline, diesel, LPG, jet fuel, kerosene and petrochemicals.
- It further markets and retails these fuel products through its fuel service stations located across the Philippines (~1,800 outlets) and Malaysia (>800 outlets).
- Petron sources its crude oil supplies from third-party suppliers, namely Saudi Aramco, Kuwait Petroleum Corporation and Exxon Mobil, which are bought on the basis of term contracts and in the spot market.
- Petron mainly supplies its petroleum and fuel products to customers in Malaysia and the Philippines (~95% of annual revenue).
- Petron is 68% owned by San Miguel Corporation (SMC), one of the largest and most diversified conglomerates in the Philippines based on total revenues and assets. SMC's CEO, Mr. Ramon Ang, is also Petron's CEO.
Risk & Catalysts
AS OF 05 Sep 2025Petron cannot fully pass on higher crude oil input costs to customers in Malaysia.
Petron operates in low-margin business (EBITDA margins ~5%) and maintains elevated credit metrics.
Petron is highly dependent on its Limay petroleum refining complex that makes up two-thirds of its total refining capacity (67%). Any events that disrupt the refinery’s operations could adversely affect Petron’s total revenues.
Key Metric
AS OF 05 Sep 2025| PHP bn | FY22 | FY23 | FY24 | 1H24 | 1H25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 74.0% | 75.1% | 74.5% | 74.1% | 72.2% |
| Net Debt to Book Cap | 65.5% | 68.2% | 67.1% | 66.5% | 62.6% |
| Debt/Total Equity | 284.2% | 301.4% | 292.0% | 285.8% | 259.3% |
| Debt/Total Assets | 70.2% | 67.6% | 64.9% | 65.1% | 61.7% |
| Gross Leverage | 10.9x | 7.1x | 7.4x | 6.8x | 6.9x |
| Net Leverage | 9.7x | 6.4x | 6.7x | 6.1x | 6.0x |
| Interest Coverage | 2.2x | 2.2x | 1.9x | 2.1x | 2.0x |
| EBITDA Margin | 3.4% | 5.3% | 4.7% | 5.1% | 5.6% |
CreditSight View Comment
AS OF 02 Oct 2025We move Petron to Market perform from Outperform, as we think the $475 mn 7.35% c.Sep-2028 perp has tightened to where we see fair value. That said, we continue to like Petron’s c.2028 for its relatively high coupon and hence high carry. Overall, we think Petron is a stable credit with an improving credit outlook. We like its full cost passthroughs for its operations in retail O&G in the Philippines, low capex, consistently improving net leverage metric (LTM 1H25: 6x), manageable debt maturity profile, proven willingness/ability to call back its perps by their first call date, strong parental support from the domestically well-reputed San Miguel Group and a 3-year tenor to first call that limits duration risk.
Recommendation Reviewed: October 02, 2025
Recommendation Changed: October 02, 2025
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Fundamental View
AS OF 03 Sep 2025Petronas’ 1H25 and FY24 credit metrics remained resilient even as EBITDA fell as we had expected.
Despite the lower YoY outlook for O&G price realizations in FY25, we expect Petronas’ credit profile to remain resilient in FY25 and maintain its net cash position, aided by resilient domestic demand and still-positive FCFs.
We take comfort in Petronas’ strong support from the Government of Malaysia, given it is strategically vested with Malaysia’s entire oil & gas resources and provides a substantial source of government income.
Sizable O&G and renewable capex and high dividend payouts could restrain improvements in Petronas’ credit metrics and free cash flows.
Business Description
AS OF 03 Sep 2025- Petronas is an integrated oil and gas company, wholly owned and controlled by the Government of Malaysia.
- Its activities span the entire up/mid/downstream value chain both domestically and internationally. Key products and services provided include the sale and marketing of petroleum products, crude oil and condensates, LNG, natural and processed gas, petrochemicals, shipping services, property development and automotive engineering.
- Petronas carries out its exploration, development and production activities via production sharing contracts (“PSCs”), mostly with international O&G companies and Petronas' wholly-owned subsidiaries.
- Its Downstream segment is aimed at refining, supplying, trading, manufacturing and marketing of crude oil, petroleum products, and petrochemical products. Its key projects and factories include Pengerang Integrated Complex (PIC), Sabah Ammonia Urea in Sabah, and Integrated Aroma Ingredients Complex in Gebeng, Kuantan.
- Its Gas and New Energy division was set up in FY19 and groups all of Petronas' LNG, gas and renewable revenues into a single segment. Activities within this division include production of LNG, processing and transportation of gas and solar power production.
- Its 6 listed subsidiaries include MISC Berhad (57.56%), KLCC Property (75.46%), Petronas Chemicals Group Berhad (64.35%), Petronas Gas Berhad (51%), Petronas Dagangan Berhad (63.94%), and Bintulu Port Holdings Berhad (28.52%).
Risk & Catalysts
AS OF 03 Sep 2025Broad growth slowdown concerns could hamper sales of Petronas’ Downstream (petroleum products) and Gas & New Energy (LNG and natural gas) segments.
Prolonged periods of low crude oil prices could harm upstream O&G EBITDA (which typically contributes 50%-70% of total profit after tax), albeit mitigated partly by stronger downstream O&G EBITDA.
Sizable capex on domestic O&G and renewable energy ventures could restrain improvements in Petronas’ credit metrics and free cash flows.
Petronas is regularly required to pay dividends to the Government of Malaysia, which may weigh on its cash flows.
We remain watchful of how the dispute between Petronas and Sarawak state government unfolds, its impact on Petronas’ financials and its market position in the Malaysian O&G sector.
Key Metric
AS OF 03 Sep 2025| MYR mn | FY22 | FY23 | FY24 | 1H24 | 1H25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 18.4% | 18.2% | 18.0% | 18.6% | 20.0% |
| Net Debt to Book Cap | n/m | n/m | n/m | n/m | n/m |
| Debt/Total Equity | 22.6% | 22.2% | 21.9% | 22.8% | 25.1% |
| Debt/Total Assets | 14.7% | 14.4% | 14.5% | 14.3% | 15.8% |
| Gross Leverage | 0.6x | 0.8x | 0.9x | 0.8x | 2.1x |
| Net Leverage | n/m | n/m | n/m | n/m | n/m |
| Interest Coverage | 33.9x | 24.9x | 21.8x | 24.4x | 18.6x |
| EBITDA Margin | 50.7% | 44.8% | 42.0% | 43.6% | 45.3% |
CreditSight View Comment
AS OF 03 Sep 2025We maintain our M/P rec on Petronas and remove our preference for its 2026-2032 as our anticipated tightening has played out; Petronas’ short-dated have tightened ~30 bp since we first put out our preference. We compare Petronas to Pertamina and think its $ bonds now trade within our fair value range against Pertamina’s. We like Petronas’s larger EBITDA, net cash position, more regular financial reporting than Pertamina and Malaysia’s relative policy stability. With the Petronas vs Sarawak state dispute nearing a resolution, we are more comfortable with the credit though we remain watchful of any negative development should Sarawak further contest the reported agreement.
Recommendation Reviewed: September 03, 2025
Recommendation Changed: September 07, 2020
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Search topics about wealth insights and investments.SK Hynix
- Bond: HYUELE 4.375 30
- Indicative Yield-to-Maturity (YTM): 4.26%
- Credit Rating : Baa2/BBB/BBB
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Fundamental View
AS OF 29 Aug 2025Business Description
AS OF 29 Aug 2025- SK Hynix is one of the world’s largest memory semiconductor companies. As an Integrated Device Manufacturer (IDM), it engages in the design, manufacturing and sale of advanced memory semiconductors. It derives 77% of 2Q25 revenues from the sale of DRAM (dynamic random-access memory), 21% from NAND Flash, and the remaining 2% from CMOS Image Sensors and foundry services. The company's products are essential to a wide range of electronic devices, including PCs, servers, graphic cards, and mobile devices.
- SK Hynix holds the largest global market share (2Q25: 40%) in DRAM and second largest in NAND Flash (2Q25: 21%).
- SK Hynix is a member of SK Group, South Korea's second largest conglomerate by asset, and is 20.1%-owned by SK Square.
- The company has manufacturing facilities located in (1) South Korea — Icheon (DRAM, NAND), and Cheongju (NAND); and (2) China — Wuxi (DRAM), Dalian (NAND); and packaging & testing facilities in Chongqing, China.
- SK Hynix had a market capitalization of KRW 194.9 tn as of 29 August 2025.
Risk & Catalysts
AS OF 29 Aug 2025- The memory sector is subjected to significant boom/bust cycles, leading to volatility in its revenue and EBITDA margin. During an upcycle, memory vendors typically expand capacity to meet strong end-demand from PC, smartphones, and servers; however, the long-lead time for new plants could result in an oversupply when end-demand is tapering off.
- Capex intensity (as % of revenues) and R&D costs are elevated even in downcycles for SK Hynix, as it needs to maintain technological leadership and fast evolving product requirements from customers.
- SK Hynix has large production and revenue exposure to China; rising US-China tension and restrictive US chip exports to China could destabilize the long-term prospect of its China production and weigh on its $ bonds. Though, in Oct-23 SK Hynix was designated as a “Validated End User” by the US government, which gave it an indefinite waiver for importing US chip gears to their Chinese plants.
- SK Hynix may be vulnerable to US tariff risk; the company derived 73% of 1Q25 revenues from the US.
Key Metric
AS OF 29 Aug 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | LTM 2Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 23.5% | 28.1% | 37.8% | 25.6% | 21.9% |
| Net Debt to Book Cap | 13.3% | 21.2% | 27.7% | 11.6% | 6.9% |
| Debt/Total Equity | 30.8% | 39.2% | 60.7% | 34.4% | 28.1% |
| Debt/Total Assets | 19.9% | 23.9% | 32.4% | 21.2% | 19.0% |
| Gross Leverage | 0.8x | 1.2x | 5.8x | 0.7x | 0.5x |
| Net Leverage | 0.5x | 0.9x | 4.3x | 0.3x | 0.2x |
| Interest Coverage | 87.3x | 38.7x | 3.8x | 26.5x | 42.0x |
| EBITDA Margin | 52.8% | 46.2% | 17.1% | 53.8% | 57.7% |
CreditSight View Comment
AS OF 04 Sep 2025We maintain our O/P recommendation on HYUELE as we do not expect the company to be materially affected by the loss of its VEU waiver over the next 18 months. We retain our view that it is likely for the BBB2 rating on HYUELE to be upgraded to BBB1 over the next 12 months by all three agencies, as we expect its debt metrics to further improve on strong HBM shipments and for the company maintain its technological and market share leadership. HYUELE currently trades marginally wider than Asia BBB+ corporate, and we expect spreads of SK Hynix to tighten towards its Asia BBB+ corp peers as it credit metrics further improves over the next 12 months We like the HYUELE 6.50% 2033 bond in particular for duration extension and a higher spread pick up of 10 bp against Asia BBB+ corporates.
Recommendation Reviewed: September 04, 2025
Recommendation Changed: August 26, 2025
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Fundamental View
AS OF 28 Aug 2025Pfizer has ample financial resources, strong ability to de-lever, and sizeable 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 (+$20 bn of revenues by 2030) and business development (+$25 bn of revenues by 2030).
Business Description
AS OF 28 Aug 2025- 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 $17 bn acquisition of Hospira, ~$12 bn acquisition of Biohaven, ~$6 bn acquisition of Arena, ~$5 bn acquisition of GBT, ~$14 bn takeover of Medivation, ~$43 bn acquisition of Seagen and $6.3 bn divestiture of its remaining stake in Haleon.
- The company has also completed the sale of its Nutrition business to Nestle for $11.9 bn and the disposition of its animal health business, Zoetis. More recently, the company executed the separation of its Consumer and Upjohn businesses through distinct transactions.
Risk & Catalysts
AS OF 28 Aug 2025Pfizer 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.
Pfizer is also exploring the sale of its hospital drugs unit. The unit was formed through the $17 bn acquisition of Hospira in 2015. We suspect that divestiture proceeds would be used primarily for business development.
Key Metric
AS OF 28 Aug 2025| $ mn | Y20 | Y21 | Y22 | Y23 | Y24 | LTM 2Q25 |
|---|---|---|---|---|---|---|
| Revenue | 41,651 | 81,288 | 101,175 | 59,553 | 63,627 | 63,833 |
| Gross Profit | 33,167 | 50,467 | 66,831 | 34,599 | 45,776 | 46,038 |
| R&D | (8,709) | (10,360) | (11,428) | (10,679) | (10,822) | (10,318) |
| SG&A | (11,597) | (12,703) | (13,677) | (14,771) | (14,730) | (13,964) |
| Adj. EBITDA | 18,027 | 33,354 | 46,153 | 22,904 | 25,866 | 26,025 |
| Total Debt | 39,836 | 38,436 | 35,829 | 71,888 | 64,351 | 61,797 |
| Gross Leverage | 2.2x | 1.2x | 0.8x | 3.1x | 2.5x | 2.4x |
| Interest Coverage | 13.1x | 26.6x | 46.8x | 39.2x | 10.2x | 11.6x |
CreditSight View Comment
AS OF 08 Oct 2025We revise our rec to M/P. PFE faces well known growth challenges tied to LOEs and Medicare price negotiations. PFE’s heavy investment in the late-stage pipeline – including the acquisitions of Seagen ($43 bn), Arena ($7 bn) and Biohaven ($12 bn) – have supported numerous new drug (or new indication) launches. However, it’s unclear if the company’s late-stage pipeline can sustain longer-term growth (Street consensus seems doubtful). At at current spreads, we see better value in lower-rated names such as ABBV and AMGN and higher-rated name LLY.
Recommendation Reviewed: October 08, 2025
Recommendation Changed: September 15, 2025
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Fundamental View
AS OF 26 Aug 2025AZN enjoys one of the strongest growth profiles in our coverage, reflecting a portfolio of innovative medicines, particularly in Oncology. The addition of Alexion supports AZN’s growth prospects, bringing strong assets in immune-mediated rare diseases.
AZN also enjoys relatively strong diversification, with core sales coming from multiple therapeutic areas and with depth across its Oncology and Biopharma platforms.
AZN’s capital allocation priorities include investment in the business, the pursuit of value-enhancing M&A, and support for the dividend.
Business Description
AS OF 26 Aug 2025- AstraZeneca is a UK-based pharmaceutical company that researches, develops, and manufactures drugs with a focus in (i) Oncology, (ii) Cardiovascular, Renal and Metabolism (CVRM), (iii) Respiratory and Immunology, (iv) Rare Disease, and (v) Vaccines and Immune.
- AstraZeneca operates in five primary segments: Oncology, CVRM (cardiovascular, renal, and metabolism), Respiratory and Immunology, Rare Diseases, and V&I (Vaccines and Immune). AstraZeneca reported FY24 revenues of $54.1 bn, with ~41% from Oncology, ~23% from CVRM, ~15% from Respiratory and Immunology, and ~16% from Rare Diseases.
- In recent years, AstraZeneca has acquired Alexion for ~$39 bn, CinCor for ~$1.8 bn, Fusion for ~$2 bn, Neogene for $320 mn, TeneoTwo for ~$100 mn with future contingent milestone payments of up to $1.1 bn, Gracell for ~$1 bn, Icosavax for ~$800 mn and Amolyt for $800 mn.
Risk & Catalysts
AS OF 26 Aug 2025Given that AZN’s leverage has been largely restored to pre-Alexion levels, we expect limited deliberate improvement from here. However, we expect future shareholder rewards and business development to be managed somewhat conservatively.
AstraZeneca has shown discipline with respect to leverage and capital allocation in recent years. While AstraZeneca pays a relatively aggressive dividend (~32% of LTM FCF), the company has historically been very conservative with share repurchases and has even used share issuance to fund certain acquisitions.
AZN recently lost a patent-infringement lawsuit against Samsung Biologics regarding a biosimilar version of Soliris.
Key Metric
AS OF 26 Aug 2025| $ mn | Y20 | Y21 | Y22 | Y23 | Y24 | LTM 2Q25 |
|---|---|---|---|---|---|---|
| Revenue | 26,617 | 37,417 | 44,351 | 45,811 | 54,073 | 56,501 |
| Gross Profit | 21,318 | 24,980 | 31,960 | 37,543 | 43,866 | 45,981 |
| R&D | (5,991) | (9,736) | (9,762) | (10,935) | (13,583) | (14,499) |
| SG&A | (11,294) | (15,234) | (18,419) | (19,216) | (19,977) | (19,909) |
| Adj. EBITDA | 8,680 | 11,506 | 14,507 | 15,641 | 18,208 | 19,236 |
| Total Debt | 19,699 | 29,794 | 28,279 | 27,494 | 28,843 | 31,206 |
| Gross Leverage | 2.3x | 2.6x | 1.9x | 1.8x | 1.6x | 1.6x |
| Interest Coverage | 11.8x | 16.0x | 17.1x | 14.5x | 13.9x | 14.2x |
CreditSight View Comment
AS OF 08 Oct 2025We reiterate our Outperform recommendation on AstraZeneca. We would take the spread pickup (~15 bp) offered versus MRK at the belly of the curve. While we acknowledge MRK carries lower net leverage, the company also has a weaker operating story and faces significantly higher product concentration risks.
Recommendation Reviewed: October 08, 2025
Recommendation Changed: April 01, 2021
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Fundamental View
AS OF 22 Aug 2025Stryker 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 22 Aug 2025- 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 $22.6 bn of revenues in 2024 (versus $20.5 bn in 2023).
- SYK maintains two operating segments: MedSurg & Neurotechnology (60% of 2024 consolidated revenues) and Orthopaedics & Spine (40%).
- 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 22 Aug 2025Stryker 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).
Last quarter SYK announced a definitive agreement to sell its US Spinal Implants business to Viscogliosi Brothers to create a newly formed company (to be named VB Spine, LLC).
Key Metric
AS OF 22 Aug 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 2Q25 |
|---|---|---|---|---|---|
| Revenue | 17,108 | 18,449 | 20,498 | 22,595 | 23,818 |
| Gross Profit | 10,968 | 11,578 | 13,058 | 14,440 | 15,276 |
| R&D | (1,235) | (1,454) | (1,388) | (1,466) | (1,547) |
| SG&A | (6,427) | (6,455) | (7,121) | (7,687) | (8,398) |
| Adj. EBITDA | 4,753 | 4,755 | 5,356 | 6,163 | 6,558 |
| Total Debt | 12,479 | 13,048 | 12,995 | 13,597 | 16,580 |
| Gross Leverage | 2.6x | 2.7x | 2.4x | 2.2x | 2.5x |
| Interest Coverage | 14.1x | 14.1x | 15.0x | 15.6x | 16.6x |
CreditSight View Comment
AS OF 01 Aug 2025We maintain our Outperform recommendation on Stryker. SYK exhibits organic growth on strong procedural volumes and relatively healthy capital equipment spending (despite the macro volatility). We would take the ~15 bp of spread pickup offered at the belly of the curve over MDT, a name with a weaker organic growth trajectory and similar leverage.
Recommendation Reviewed: August 01, 2025
Recommendation Changed: May 03, 2022
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Search topics about wealth insights and investments.HCA Healthcare
- Bond: HCA 5.25 30
- Indicative Yield-to-Maturity (YTM): 5.013%
- Credit Rating : BBB
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Fundamental View
AS OF 22 Aug 2025HCA’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 22 Aug 2025- HCA operates more than 190 hospitals with ~50k beds and 124 freestanding surgery units (as of 2Q25). The company operates in 20 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 22 Aug 2025We see some risk of choppy operating performance tied to an unwind of acuity and payor mix benefits experienced through COVID.
HCA guides to FY25 revenue growth of 4.8-7.6% and adjusted EBITDA growth of 5.9-10.2%. Management reported an 1% YoY decline in 2Q25 contract labor costs and with expectations of this trend to continue through FY25.
HCA is exposed to certain provisions in the Big Beautiful Bill which could result in insured coverage losses and lower supplemental payments.
HCA’s board recently authorized an additional $10 bn share repurchase program (with a significant portion expected to be completed in FY25).
Key Metric
AS OF 22 Aug 2025| $ mn | Y20 | Y21 | Y22 | Y23 | Y24 | LTM 2Q25 |
|---|---|---|---|---|---|---|
| Revenue | 51,533 | 58,752 | 60,233 | 64,968 | 70,603 | 72,698 |
| SWB | 23,874 | 26,779 | 27,685 | 29,487 | 31,170 | 31,913 |
| Supplies | 8,369 | 9,481 | 9,371 | 9,902 | 10,755 | 11,058 |
| Adj. EBITDA | 10,037 | 12,644 | 12,067 | 12,726 | 13,882 | 14,561 |
| Total Debt | 31,004 | 34,579 | 38,084 | 39,593 | 43,031 | 44,519 |
| Gross Leverage | 3.1x | 2.7x | 3.2x | 3.1x | 3.1x | 3.1x |
| Interest Coverage | 6.2x | 8.4x | 7.3x | 6.7x | 7.2x | 7.0x |
CreditSight View Comment
AS OF 27 Oct 2025We 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: October 27, 2025
Recommendation Changed: May 02, 2018
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Search topics about wealth insights and investments.Hyundai Motor
- Sector: Manufacturing
- Sub Sector: Automotive
- Country: Korea
- Bond: HYNMTR 5.4 31
- Indicative Yield-to-Maturity (YTM): 4.476%
- Credit Rating : A3 / A- / A-
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Fundamental View
AS OF 21 Aug 2025- While the profit headwind related to tariffs could become a rating event over time, we expect the rating agencies to maintain their patient stance on Hyundai based on its solid market position and healthy pre-tariff profit margins, giving the company time to implement and execute tariff mitigation strategies before contemplating negative rating actions. We note that Hyundai’s biggest mitigation strategy involving the ramp of its US-based Metaplant is already underway and should reduce its reliance on vehicle imports for the US market from 60% to 30% over time.
Business Description
AS OF 21 Aug 2025- Hyundai Motor Co., Ltd. engages in the manufacture and distribution of motor vehicles and parts. It operates through the following business areas: Vehicle, Financial and Other. The Vehicle division offers motor vehicles. The Financial division provides financing, leasing and credit cards. The Other division includes manufacture of railways. The company was founded on December 29, 1967, and is headquartered in Seoul, South Korea.
- Hyundai Capital America benefits from a support agreement with Hyundai Motor (HMC). HCA investor relations confirmed its support (keepwell) agreement contains a fixed charge coverage provision that it views as particularly strong compared to other peers.
Risk & Catalysts
AS OF 21 Aug 2025- On a combined basis, HMG’s current FY25 guidance targets FY25 wholesale unit growth of 2% to 7.4 mn units, revenue growth of 5% to 6%, and a consolidated operating profit margin of 8.8% at the midpoint of the range for YoY margin contraction of 40 bp. Kia management expects 2H25 vehicle demand in the US to decline 10% YoY, which will likely lead to a reduction in HMG’s FY25 wholesale unit target. Hyundai management stated it expects a bigger tariff impact in 3Q25 and 4Q25 than 2Q25, which we believe is likely due to a combination of vehicle tariffs being in effect for the entire quarter instead of just two months in 2Q25, along with lower volumes.
- HMG targets continued growth of NEVs in 2H25, including a target of 100% growth in HEV sales. Given the end of the US $7,500 NEV consumer tax incentive at the end of 3Q25 and expected reduced emissions standards in the US, the company plans to leverage its flexible production system for ICE and NEVs to adapt to potential demand changes. Management previously noted its Metaplant in Georgia, which was originally designed to manufacture EVs, was being retooled to also produce HEVs and could potentially produce ICE vehicles in the future.
Key Metric
AS OF 21 Aug 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | LTM 2Q25 |
|---|---|---|---|---|---|
| Revenue | 94,143 | 113,718 | 130,150 | 136,725 | 141,518 |
| EBIT | 5,459 | 8,950 | 15,440 | 14,189 | 12,233 |
| EBIT Margin | 5.8% | 7.9% | 11.9% | 10.4% | 8.5% |
| EBITDA | 10,015 | 13,998 | 20,387 | 18,476 | 15,331 |
| EBITDA Margin | 10.6% | 12.3% | 15.7% | 13.5% | 8.5% |
| Total Liquidity | 19,745 | 26,639 | 26,507 | 27,488 | 22,776 |
| Net Debt | (5,202) | (11,035) | (10,916) | (11,799) | (17,730) |
| Total Debt | 12,569 | 12,940 | 12,940 | 12,940 | 5,805 |
| Gross Leverage | 1.3x | 0.9x | 0.6x | 0.7x | 0.4x |
| Net Leverage | -0.5x | -0.8x | -0.5x | -0.6x | -1.0x |
CreditSight View Comment
AS OF 21 Oct 2025We reiterate our Outperform recommendation on HMG notes based on relative value, the company’s solid global market position, and our view its low-A credit rating should be secure in the near term based on its solid global market position, its growing new energy vehicle business, tariff mitigation initiative including vehicle onshoring in the US, and potential near-term tariff rate relief.
Recommendation Reviewed: October 21, 2025
Recommendation Changed: April 28, 2025
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Search topics about wealth insights and investments.JD.com
- Sector: Media and TelecommunicationsTechnology
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 21 Aug 2025We maintain our M/P recommendation on JD post its weak 2Q25 results; topline growth was a strong beat, but EBITDA margin materially narrowed due to hefty spending for its food delivery business; FOCF also contracted and gross debt metrics weakened, but JD still retained a strong net cash position. JD trades largely in-line to Asia A- corp which we view as fair; while we expect JD’s gross debt metrics to temporarily weaken over 2H25 due to its hefty investments into food delivery, we do not expect downgrade risk for the credit given the strong performance of its core retail and logistic segments, and we expect JD to still maintain a strong net cash position over the 12 months. Amongst the A-rated China tech credits, we continue to prefer Alibaba and Tencent.
Business Description
AS OF 21 Aug 2025- JD is one of China's leading e-commerce and retail infrastructure service providers.
- JD has a large fulfillment infrastructure which includes over 1,600 warehouses operated by the company, and 2,000 cloud warehouses operated by third-party warehouse owner-operators under JD Logistics Open Warehouse Platform. Its warehouse network had an aggregate gross floor area of approximately over 32 mn square meters, as of 31 December 2024.
- JD has 3 operating segments, namely (1) JD Retail (82% of 2Q25 revenues), which includes JD Health and JD Industrials, and the segment mainly engages in online retail, online marketplace and marketing services in China; (2) JD Logistics (14%) which includes both internal and external logistic businesses; and (3) New businesses (4%) which consist of food delivery, Dada, JD Property, Jingxi and overseas businesses.
- JD had a market capitalization of RMB 325.1 bn as of 21 Aug 2025.
Risk & Catalysts
AS OF 21 Aug 2025While Chinese regulators have adopted a friendlier stance towards tech companies, any regulatory clampdowns may still adversely affect the business of JD (e.g. antitrust rules, data security & personal data protection laws).
Intensifying competition amongst Chinese eCommerce platforms with the entrance of new live-streaming/short-form video platforms and group buying discount platforms may result in slower topline growth and weaker EBITDA margin for JD as its increase its user/merchant incentives and promotional activities to defend its market share.
There are regulatory risks involving the use of variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers (ICPs). Specifically, VIE transactions involving “change in control” will be subject to antitrust regulatory processes.
Key Metric
AS OF 21 Aug 2025| RMB mn | FY21 | FY22 | FY23 | FY24 | LTM 2Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 12.2% | 19.2% | 18.8% | 22.3% | 25.3% |
| Debt/Total Equity | 13.8% | 23.7% | 23.1% | 28.7% | 33.9% |
| Debt/Total Assets | 6.9% | 10.9% | 10.9% | 12.9% | 14.3% |
| Gross Leverage | 1.8x | 1.9x | 1.5x | 1.7x | 2.2x |
| Interest Coverage | 16.1x | 16.3x | 15.5x | 18.5x | 16.2x |
| EBITDA Margin | 2.0% | 3.3% | 4.1% | 4.6% | 3.6% |
CreditSight View Comment
AS OF 05 Sep 2025We also shift our recommendation on JD to Underperform from Market perform. JD trades only 1 bp wider than Asia A corporate and 5 bp tighter than Asia A- corporates; compared to Alibaba and Tencent, JD is only 17/8 bp wider, which is much tighter than the average spread differential of 24 bp for A3 and A1 Asia $ bonds. We think the current spreads of JD has not priced in its weaker credit outlook over the next 12 months given its rapid expansion within the food/retail on-demand delivery segment. We see reduced rating headroom for JD and expect S&P to revise its positive outlook on JD back to stable.
Recommendation Reviewed: September 05, 2025
Recommendation Changed: September 05, 2025
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