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Mitsubishi UFJ Financial Group
- Sector: Financial Services
- Sub Sector: Banks
- Region: Japan
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Fundamental View
AS OF 26 Nov 2025MUFG is the largest of Japan’s three megabanks, and has the most diversified operations by business line and geography. It had also been the most acquisitive till the early 2020s.
Core profitability had been weak due to Japan’s ultra-low interest rates and growth; that improved post an efficiency drive and a CEO change in April 2020; the bank has improved international margins and fee income, and benefits from rising domestic interest rates.
Given its size and systemic importance, MUFG is considered too big to fail, and will be supported by the Japanese government if needed.
Business Description
AS OF 26 Nov 2025- The 2 main banks of MUFG are MUFG Bank (earlier Bank of Tokyo-Mitsubishi UFJ or BTMU) & Mitsubishi UFJ Trust & Banking. In the early stages of Japan's long banking crisis, Bank of Tokyo merged with Mitsubishi Bank, and in the late stages they absorbed UFJ (former Sanwa Bank & Tokai Bank) while Mitsubishi Trust absorbed Toyo Trust & Nippon Trust.
- The group includes consumer lenders Mitsubishi-UFJ NICOS & ACOM, and securities/IB JVs with Morgan Stanley. MUFG invested in Morgan Stanley in 2008 and now has a ~20% stake. In Dec-22, it completed the sale of its US retail and commercial bank, MUFG Union Bank, to US Bancorp.
- It has a majority stake in Thailand's Bank of Ayudhya (now Krungsri), 20% stakes in Vietnam's Vietinbank and Philippines' Security Bank, and 100% of Indonesia's Bank Danamon.
- In 2019, it acquired Colonial First State from Commonwealth Bank of Australia to strengthen its global asset management business, in 2020 it invested $700 mn in SE Asia's Grab, and more recently has bought Home Credit's Philippine and Indonesian subsidiaries, Link (an Australian pension fund administrator), auto loan companies in Indonesia, Albacore Capital, StanChart's Indonesian retail operations, and a stake in an Indian NBFI.
Risk & Catalysts
AS OF 26 Nov 2025Its recent divisional performance has been strong, with the domestic businesses benefiting from higher BOJ rates, and robust growth in fee income.
Credit costs have been rising because of increased exposure to personal unsecured loans in Japan and Southeast Asia, as well as higher-risk lending in Southeast Asia.
Its close relationship with Morgan Stanley has led it to take large positions in US corporate finance loans, which has been problematic on occasion.
We see limited risk from rising JGB yields as the large equity unrealised gains dwarf the unrealised losses on the bond portfolio.
Key Metric
AS OF 26 Nov 2025| JPY bn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| Net Interest Revenue/Average Assets | 0.57% | 0.79% | 0.64% | 0.73% | 0.73% |
| Operating Income/Average Assets | 1.11% | 1.22% | 1.23% | 1.22% | 1.48% |
| Operating Expense/Operating Income | 69% | 65% | 61% | 67% | 56% |
| Pre-Impairment Operating Profit / Average Assets | 0.34% | 0.43% | 0.48% | 0.40% | 0.65% |
| Impairment charge/Average Loans | (0.30%) | (0.61%) | (0.36%) | 0.00% | (0.12%) |
| ROAA | 0.32% | 0.30% | 0.39% | 0.47% | 0.65% |
| ROAE | 6.7% | 6.5% | 8.1% | 9.3% | 12.5% |
| CET1 post Basel 3 reforms excl. secs gains | 10.4% | 10.3% | 10.1% | 10.8% | 10.5% |
CreditSight View Comment
AS OF 05 Mar 2026MUFG is the largest of the megabanks with more diversified business lines than its peers. Digitalisation and operational efficiency improvements, in addition to higher rates in Japan and the US, had led to much better results in FY24. Lending discipline has lifted international margins; domestic margins though lag its peers. Its ~20% shareholding in Morgan Stanley has been a boon. Its $ liquidity is the best amongst its peers, and government support is assured. Its CET1 ratio ratio has fallen to ~180 bp, which we see as low; pro-forma for the Shriram acquisition it will fall to a particularly low ~120 bp. We see current spreads as having ~14 bp of upside (to flat to JPM for 6NC5) and move it to Outperform.
Recommendation Reviewed: March 05, 2026
Recommendation Changed: March 05, 2026
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Search topics about wealth insights and investments.T-Mobile US
- Sector: Technology Media and Telecommunications
- Sub Sector: Telecommunications
- Region: US
- Bond: TMUS 3.5 31
- Indicative Yield-to-Maturity (YTM): 4.275%
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Fundamental View
AS OF 24 Nov 2025We expect T-Mobile will maintain its position as the industry leader in postpaid phone net additions, service revenue and EBITDA growth in 2025. We think the company has significant subscriber runway remaining in the suburban/rural and enterprise markets.
Adjusted net leverage (2.5x at 3Q25) is below AT&T/Verizon. Relatively strong EBITDA growth and a modest dividend commitment results in greater financial flexibility than peers.
T-Mobile benefits from the strongest spectrum position in the industry, including an average of 181 MHz in the 2.5 GHz band, which results in better 5G network coverage than AT&T and Verizon.
Business Description
AS OF 24 Nov 2025- TMUS is the one of the top 3 U.S. wireless carriers and is owned ~51% by Deutsche Telekom (DT). On April 1, 2020, TMUS and S completed an all-stock merger, valuing S at an EV of approximately $59.7 bn.
- TMUS ended 2024 with ~130 mn customers, including 104 mn postpaid and 25 mn prepaid.
- TMUS reaches 330+mn POPs with its Extended Range 5G network (using the 600 MHz spectrum) and reaches 300mn customers with its Ultra Capacity 5G.
Risk & Catalysts
AS OF 24 Nov 2025Converged wireless/broadband offers from cable operators raises the risk of pricing pressure in the mature consumer wireless market. AT&T and Verizon have also made sizable fiber acquisitions, enhancing their ability to offer converged services.
The company has not shied away from acquisitions. T-Mobile recently acquired Mint Mobile, two FTTH JVs and US Cellular. So far, M&A has not had much impact on T-Mobile’s credit metrics, but further moves into FTTH may be received poorly by investors.
Key Metric
AS OF 24 Nov 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 80,118 | 79,571 | 78,558 | 81,400 | 85,847 |
| Organic Revenue Growth | 7.3% | (0.7%) | (1.3%) | 3.6% | 7.3% |
| EBITDA | 26,924 | 27,821 | 29,428 | 31,864 | 33,406 |
| Adj. EBITDA Growth | (64.0%) | 33.9% | 5.8% | 8.3% | 7.2% |
| Adj. EBITDA Margin | 33.6% | 35.0% | 37.5% | 39.1% | 38.9% |
| CapEx % of Sales | 15.4% | 17.6% | 12.5% | 10.9% | 11.3% |
| Total Debt | 79,574 | 78,425 | 83,586 | 84,255 | 90,107 |
| Net Debt | 72,943 | 73,918 | 78,451 | 78,846 | 86,797 |
| Gross Leverage | 3.4x | 3.0x | 2.9x | 2.7x | 2.7x |
| Net Leverage | 3.0x | 2.7x | 2.6x | 2.4x | 2.5x |
| Interest Coverage | 7.2x | 8.0x | 8.3x | 8.7x | 8.7x |
| FCF as % of Debt | 13.7% | 13.2% | 19.2% | 23.0% | 22.1% |
CreditSight View Comment
AS OF 10 Mar 2026We expect T-Mobile will continue to lead the industry for growth in subscribers and EBITDA (+10% YoY) in 2026 and beyond. T-Mobile also boasts the lowest leverage (~2.4x) and strongest FCF/debt ratio amongst the Wireless Big 3, while its rising FCF generation and comparatively low dividend commitment provide flexibility for selective M&A. We acknowledge that event risk for TMUS is higher than peers AT&T and Verizon, which have already announced material FTTH and spectrum acquisitions. However, despite the rising focus on convergence, we believe TMUS will stick with its off-balance sheet strategy for FTTH JVs and view the risk of a transformational broadband acquisition (ILEC or cable) as low.
Recommendation Reviewed: March 10, 2026
Recommendation Changed: March 18, 2021
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Search topics about wealth insights and investments.Globe Telecom
- Sector: TechnologyTechnology Media and Telecommunications
- Sub Sector: Telecommunications
- Country: Philippines
- Bond: GLOPM 2.5 30
- Indicative Yield-to-Maturity (YTM): 4.44%
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Fundamental View
AS OF 18 Nov 2025- Globe’s 1H25 results were poorer than expected, but we believe credit metrics may improve modestly through 2H25 from modest EBITDA growth, lower YoY capex, and residual tower sales closures.
- While we acknowledge the stiff competitive pressures brought about by new entrant DITO, the impact is mitigated by Globe’s still-dominant mobile market position and DITO’s slowing expansion (given its weak financials and the costly capex involved).
- Weakness in the broadband business has lessened since 3Q24 and could stabilize by end-2025.
- While Globe earlier raised the upper end of its dividend policy, we expect dividend payouts to remain stable.
Business Description
AS OF 18 Nov 2025- Globe is a leading telecom operator in the Philippines, competing alongside its main rival PLDT in a duopoly setting.
- Globe provides 2G/3G/4G mobile, fixed-line, broadband, enterprise data, and other digital services to retail and corporate customers.
- Globe operates through 2 main business segments – “Mobile Services” and “Fixed Line and Home Broadband Services”.
- Its “Mobile Services” segment offers mobile voice, mobile SMS and mobile data services to retail customers in the Philippines. These services are marketed under the “Globe Postpaid”, “Globe Prepaid” and “TM” brands.
- Its “Fixed Line and Home Broadband Services” segment provides fixed line voice, corporate data and home broadband services to retail and corporate customers in the Philippines.
- Globe commercially launched 5G services on a small-scale basis in Jun-2019. It currently maintains 5G coverage of 96% of the National Capital Region, with over 2,000 5G sites nationwide.
- Globe maintains dominant market shares in the mobile data, voice and SMS space (FY22 revenue market share [RMS] of 52% vs PLDT 40%), but loses out to PLDT in the home broadband space (FY22 RMS of 28%-30% vs PLDT 48%-50%).
- Globe is largely owned by two established corporate groups – Ayala Corporation (~47 stake) and Singtel (~43% stake).
Risk & Catalysts
AS OF 18 Nov 2025- Globe faces mounting competitive pressures from new mobile entrant DITO and incumbent broadband competitor PLDT.
- Aggressive expansion by new entrant DITO over the next 2-4 years could chew away at Globe’s market share and restrain recoveries in average revenues per user (ARPU).
- Globe incurs heavy capex that has pressurized its leverage metrics and free cash flows. That said, capex had peaked in FY23 and should meaningfully decline ahead.
- Consistent dividend payouts could weigh on Globe’s free cash flows; Globe recently raised the upper end of its dividend policy from 75% to 90% of net income, suggesting an increased skew to shareholder-friendly actions.
Key Metric
AS OF 18 Nov 2025| PHP bn | FY22 | FY23 | FY24 | 3Q24 | 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 67.5% | 69.7% | 70.2% | 69.5% | 70.2% |
| Net Debt to Book Cap | 63.7% | 66.6% | 66.4% | 65.4% | 65.4% |
| Debt/Total Equity | 208.1% | 230.5% | 235.8% | 227.4% | 235.4% |
| Debt/Total Assets | 57.1% | 60.3% | 62.4% | 61.1% | 62.5% |
| Gross Leverage | 3.9x | 4.3x | 4.4x | 4.3x | 4.6x |
| Net Leverage | 3.7x | 4.1x | 4.2x | 4.1x | 4.3x |
| Interest Coverage | 5.9x | 4.6x | 4.3x | 4.3x | 4.1x |
| EBITDA Margin | 46.7% | 47.7% | 49.7% | 49.0% | 51.3% |
CreditSights View
AS OF 12 Mar 2026We have a Market perform recommendation on Globe with a preference for its c.2026 perp. Globe 2030 trades about 10-20 bp wider than S&SEA telcos including PLDT, Axiata, Bharti, and AIS that we view as fair. Globe c.2026 perp trades at G+159 bp that we view as attractive for short-dated “IG” paper. We anticipate a modestly improving credit outlook as lower capex and a preference share issue to repay debt are offset by persisting tight price competition and sticky dividends. Globe also recently revised its dividend policy to 60%-90% of PAT from 60%-75% previously, suggesting an increased skew towards shareholder-friendly actions, though this has not happened yet.
Recommendation Reviewed: March 12, 2026
Recommendation Changed: June 18, 2024
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Search topics about wealth insights and investments.PLDT
- Sector: Media and TelecommunicationsTechnologyTechnology Media and Telecommunications
- Sub Sector: Telecommunications
- Country: Philippines
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Fundamental View
AS OF 17 Nov 2025PLDT’s FY24 and 1H25 results were stable as expected; we see a modestly improving FY25 credit outlook aided by resilient EBITDA growth and residual tower sales, which could offset persisting high capex.
A potential stake sale of the data center business could drive further deleveraging.
While the spillover of a PHP 33 bn capex overrun to FY25 could weigh on free cash flows, we draw mild comfort that it was likely not due to fraud but rather a management misstep.
Business Description
AS OF 17 Nov 2025- PLDT is a leading telecom operator in the Philippines, competing alongside its main rival Globe Telecom in a predominant duopoly.
- PLDT provides 2G/3G/4G mobile, fixed-line, broadband, enterprise data, and other digital services to retail and corporate customers.
- PLDT operates through 2 main business segments – “Wireless Services” and “Fixed Line Services”.
- Its “Wireless” segment offers mobile voice, mobile SMS, mobile data and mobile broadband services to retail customers in the Philippines. These services are marketed under the “Smart Postpaid”, “Smart Prepaid”, "Sun Postpaid" and “TNT Prepaid” brands.
- Its “Fixed Line Services” segment provides fixed line voice, corporate data and home broadband services to retail and corporate customers in the Philippines.
- PLDT commercially launched 5G services on a small-scale basis in Jul-2020. It currently has over 3,000 5G sites nationwide.
- PLDT maintains dominant market shares in the mobile, fixed line voice, and the home broadband spaces.
- PLDT is backed by three established corporate groups, namely First Pacific (~15% stake), NTT Corporation (~12% stake) and JG Summit Holdings (~7% stake).
Risk & Catalysts
AS OF 17 Nov 2025Aggressive expansion by new entrant DITO over the next 2-4 years could chew away at PLDT’s market share and restrain recoveries in average revenues per user (ARPU).
PLDT incurs significant capex that has restrained improvements in its leverage metrics and free cash flows. This is worsened by a recent capex overrun that has induced mild corporate governance uncertainties (though these have eased in recent months).
Consistently high dividend payouts could worsen PLDT’s already negative free cash flows.
PLDT is exposed to $/PHP depreciation risks ($300 mn 2050 bond is fully unhedged).
Key Metric
AS OF 17 Nov 2025| PHP bn | FY22 | FY23 | FY24 | 9M24 | 9M25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 71.9% | 73.3% | 74.2% | 74.1% | 74.7% |
| Net Debt to Book Cap | 65.7% | 69.3% | 72.0% | 71.3% | 72.6% |
| Debt/Total Equity | 256.2% | 273.9% | 287.5% | 286.2% | 294.9% |
| Debt/Total Assets | 46.8% | 49.6% | 53.8% | 52.1% | 56.9% |
| Gross Leverage | 2.9x | 2.9x | 3.0x | 3.0x | 3.2x |
| Net Leverage | 2.7x | 2.8x | 2.9x | 2.9x | 3.1x |
| Interest Coverage | 7.4x | 6.5x | 6.1x | 6.2x | 5.5x |
| EBITDA Margin | 48.7% | 49.1% | 51.1% | 51.8% | 52.3% |
CreditSight View Comment
AS OF 12 Mar 2026We maintain our Market perform recommendation on PLDT. PLDT 2031 trades tight to Globe 2030, ICTSI 2031, Axiata 2030, and Bharti 2030, and we see room for it to widen 15-20 bp. PLDT 2050 also trades tight to other 2050 bonds in SSEA, including Reliance, Pertamina, and PLN. We are comfortable with PLDT’s sturdy credit profile aided by a resilient broadband business and falling capex. Governance fears have also eased post its capex overrun in end-2022. That said, we are watchful of strong competition in the mobile space due to DITO’s ramp up, persisting pricing pressure, and rising dividends. Proposed asset monetizations including data center stake sales are credit positive, though progress is seemingly elusive.
Recommendation Reviewed: March 12, 2026
Recommendation Changed: February 03, 2026
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Fundamental View
AS OF 12 Nov 2025Historically, KDP has benefited from exposure to faster growing, higher margin beverage & coffee categories. However, the credit story is current dominated by the pending acquisition of JDE Peet’s, and plans to separate the coffee and beverage businesses.
Pro forma for the initial merger, KDP will have net leverage of 4.6x (vs 3.3x at MRQ), with plans to delever thereafter. Management expects both standalone entities to maintain investment grade ratings, but leverage will likely be elevated out of the gate.
KDP has a successful track record of deleveraging after past M&A. We like the growth outlooks of the proposed standalone entities, and think the new issue to fund the acquisition will likely present a good opportunity to add exposure to the name.
Business Description
AS OF 12 Nov 2025- KDP is the result of a July 2018 merger between Dr Pepper Snapple and Keurig Green Mountain. The merger combined a traditional soft drinks company (DPS) with a faster growing coffee platform that includes the market's leading single serve brewing system.
- The merger was backed by JAB Holdings via its affiliate, Maple Holdings BV. While JAB has trimmed its stake in recent periods, it still controls ~16% of the shares.
- KDP recorded $15.4 bn in 2024 net sales with adjusted EBITDA of $4.5 bn. The business is heavily concentrated in North America, and results are reported across three operating segments: U.S. Refreshment Beverages (61% of 2024 sales), U.S. Coffee (26% of sales), and International (13.0% of sales).
- Examples of KDP's key brands include Dr Pepper, Keurig, Snapple, Canada Dry, 7Up, Mott's, and A&W. The company also partners with other leading coffee brands from various producers via licensing and manufacturing agreements for K-cups.
- KDP signed a definitive agreement to acquire JDE Peet's for $22+ bn in August. The deal is expected to close in 1H26. Subsequently the company intends to separate the business into two standalone entities: Global Coffee Co and Beverage Co.
Risk & Catalysts
AS OF 12 Nov 2025The KDP-JDEP acquisition ($22 bn) is anticipated to close in 1H26, with the goal of being separation ready by year-end 2026. Management reiterated its $400 mn synergy target over three years.
The coffee industry is currently experiencing intense cost inflation, and price elasticity has increased, challenging cost passthrough.
Post-split, BeverageCo will target 3.5-4.0x net leverage and Global CoffeeCo will target 3.75-4.25x net leverage. There is still uncertainty where legacy bonds will end up, but we tend to see BeverageCo ending up as RemainCo. It is also unclear what pf net leverage will be at the standalone entities. If BeverageCo is RemainCo, we expect some level of debt repayment following a spin/sale of Global CoffeeCo.
Key Metric
AS OF 12 Nov 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 12,683 | 14,057 | 14,814 | 15,351 | 16,174 |
| EBITDA | 3,908 | 3,932 | 4,189 | 4,528 | 4,678 |
| EBITDA Margin | 30.8% | 28.0% | 28.3% | 29.5% | 28.9% |
| EBITDA-CAPEX-INT % of Revenues | 23.5% | 20.5% | 21.7% | 21.6% | 21.7% |
| Total Debt | 12,024 | 12,104 | 13,308 | 15,595 | 15,846 |
| Net Debt | 11,457 | 11,569 | 13,041 | 15,085 | 15,330 |
| Net Leverage | 2.9x | 2.9x | 3.1x | 3.3x | 3.3x |
| EV / EBITDA | 16.3x | 15.8x | 14.2x | 13.0x | 10.7x |
CreditSight View Comment
AS OF 12 Mar 2026We see value in KDP spreads relative to mid-BBB beverage peer Constellation Brands, and relative to tighter trading names like General Mills and Mondelez, even as the company contemplates the leveraging acquisition of JDE Peet’s and a subsequent split of its coffee and beverage businesses. PF net leverage is expected to be 4.5x out of the gate and management will target investment grade levels are both entities after the eventual spin. Financing will include $9.0 bn of private equity funds, which was designed to replace debt financing and aid in deleveraging. We are comfortable with the anticipated credit profiles of the two supposed standalone entities, and favor the beverage and coffee margin and cash flow profiles to those of food peers.
Recommendation Reviewed: March 12, 2026
Recommendation Changed: January 16, 2026
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Fundamental View
AS OF 10 Nov 2025As one of the world’s largest beverage companies KO operates across a diverse geographic footprint and generates stable and robust free cash flow.
KO’s net leverage is in a conservative position despite a recent increase in debt, at the low-end of management’s 2.0-2.5x range.
In light of recent increase price elasticity in food categories, we favor KO’s pure-play beverage portfolio to mixed food and beverage portfolio at PepsiCo.
Business Description
AS OF 10 Nov 2025- KO is the world's largest beverage company, owning, licensing, and marketing numerous brands in over 200 countries worldwide. It has 4 of the world's top 5 nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.
- KO distributes its product through independent and company-controlled bottling distribution operations. KO largely refranchised its wholly-owned bottlers, selling the operations to independent bottlers. This strategy reduced capital intensity and expanded margins.
- KO has two primary businesses: Beverage Concentrates (66% of revenue) and Finished Sparkling & Still Beverages (34% of revenue). KO uses unit case volume growth and concentrate sales volume to evaluate performance.
- In 2024, the Coca-Cola system sold 33.7 bn unit cases of products worldwide, comprised of 69% from sparkling beverages and 47% from trademark Coca-Cola. The system has broad international exposure, with 84% of unit case volume generated outside the U.S.
Risk & Catalysts
AS OF 10 Nov 2025An unfavorable U.S. tax ruling could still result in some leverage creep depending on the ultimate outcome. KO is appealing the ruling, and in the meantime, management’s has steered leverage towards or below the low-end of its 2-2.5x range.
Management has expressed interest in expanding its presence over time in the alcoholic beverage category, although to this point the company has limited its involvement to licensing arrangements for its soft drink brands with large-scale brewers and distillers.
Sugar-based drinks have frequently been the target of RFK Jr’s MAHA movement, introducing risk of SNAP eligibility loss, which could create demand headwinds.
Key Metric
AS OF 10 Nov 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 38,658 | 43,046 | 45,784 | 46,897 | 47,475 |
| EBITDA | 12,898 | 13,961 | 14,719 | 15,446 | 16,122 |
| EBITDA Margin | 33.4% | 32.4% | 32.1% | 32.9% | 34.0% |
| EBITDA-CAPEX-INT % of Revenues | 27.9% | 26.9% | 24.8% | 25.0% | 26.2% |
| Total Debt | 42,761 | 39,149 | 42,064 | 44,522 | 47,416 |
| Net Debt | 31,835 | 28,587 | 29,701 | 31,674 | 33,542 |
| Net Leverage | 2.5x | 2.0x | 2.0x | 2.1x | 2.1x |
| EV / EBITDA | 22.4x | 21.8x | 19.4x | 19.5x | 19.8x |
CreditSight View Comment
AS OF 18 Feb 2026We have an Outperform recommendation on KO bonds, reflecting a slight preference for the credit over its high-A beverage peer, PepsiCo, at similar levels. We view both credits as core holds, but our updated view reflects increased comfort with KO’s ability to navigate an expected tax liabilities related to U.S. Tax Court litigation, as well as recent earnout payments related to the Fairlife acquisition. KO has reported steady organic growth led by continued pricing benefits and stable consumption trends across its portfolio of soft drinks. Management guides to a net leverage target of 2-2.5x and we expect the company to maintain metrics in that range over the medium term. Playing KO vs PEP also allows investors to avoid activist risk and exposure to the snacking category at PEP.
Recommendation Reviewed: February 18, 2026
Recommendation Changed: January 16, 2025
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Search topics about wealth insights and investments.Netflix Inc
- Sector: Media
- Sub Sector: Technology
- Region: US
- Bond: NFLX 4.875 30
- Indicative Yield-to-Maturity (YTM): 4.30%
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Fundamental View
AS OF 28 Oct 2025- Netflix is one of the few clear winners in the industry’s transition to streaming, and we believe the group’s leading position will be bolstered in 2025/2026 as legacy media companies continue to rein in spending and international ambitions.
- From a financial perspective, we expect Netflix will deliver ~25% EBITDA growth in 2025 driven by a mix of subscriber growth, price hikes and margin expansion.
- Netflix’s financial policy is relatively conservative. While the company no longer targets $10-15 billion of gross debt, we view Netflix’s new financial policy as an evolution rather than a revolution and expect credit metrics to remain best in class.
Business Description
AS OF 28 Oct 2025- NFLX is the world's leading subscription streaming entertainment service with ~300+ mn paid streaming subs in 190+ countries around the world. NFLX's programming includes original & acquired TV series, documentaries and feature films.
- NFLX began expanding internationally with the launch of services in Canada (Sep 2010), followed by LatAm (Sep 2011), and the UK and Ireland (Jan 2012). NFLX launched services in 17 more markets at a measured pace through the end of 2015 before launching in the rest of the world in Jan 2016 (ex-China, N Korea, Syria, Crimea).
- As of FY24, Netflix's regional subscriber breakdown was as follows: (1) EMEA - 101.1 mn; (2) UCAN - 89.6 mn; (3) APAC - 57.5 mn and (4) LATAM - 53.3 mn.
- Ted Sarandos and Greg Peters are Co-CEOs, with Mr. Sarandos appointed to the position in July 2020 and Mr. Peters in January 2023. Co-founder Reed Hastings was appointed as executive chairman of the Board in January 2023.
Risk & Catalysts
AS OF 28 Oct 2025- M&A Risk: Warner Bros. Discovery is actively considering asset sales. We believe Netflix has no interest in linear TV assets, but could be open to a studio purchase under the right circumstances. Additionally, Netflix is in the early stages of an expansion into video games and has already acquired several studios.
- Increased Competition: Several large competitors including Amazon and Apple are increasingly leaning into DTC video offerings on a global basis. Heightened competition may result in rising churn & declining gross additions for NFLX.
- Market Saturation: Netflix is highly penetrated in the US market, so future growth will become increasingly dependent on price increases, uptake of the ad tier and success on the password sharing crackdown. The recent WWE and NFL deals also opens the door to higher-priced sports programming.
Key Metric
AS OF 28 Oct 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 29,698 | 31,616 | 33,723 | 39,001 | 43,379 |
| Revenue YoY % | 18.8% | 6.5% | 6.7% | 15.6% | 15.4% |
| EBITDA | 6,806 | 6,695 | 7,650 | 11,019 | 13,265 |
| EBITDA Growth | 33% | (2%) | 14% | 44% | 29% |
| Cash Content Expense | 17,469 | 16,660 | 13,140 | 17,003 | 17,209 |
| CFO - CapEx | (132) | 1,619 | 6,926 | 6,922 | 8,967 |
| Dividends/CFO-Capex | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| LTM CFO-CapEx to Debt | (0.9%) | 11.3% | 47.6% | 44.4% | 62.0% |
CreditSight View Comment
AS OF 27 Feb 2026Netflix is one of the few clear winners in the industry’s transition to streaming, and we believe the group is well positioned to maintain its double-digit top line and profit growth in 2026. Netflix surprised us in early December 2025 with the announcement of an $83 billion deal to acquire Warner Bros. Although the deal marked a major change in strategy, we viewed the transaction as strategically sound and were pleased to see the company walk away after Paramount raised the price to a level that was “no longer financially attractive”. We think that Netflix may kick the tires on a similar transaction with NBCUniversal, although it is unclear if they are comfortable owning a broadcast network or if Brian Roberts is willing to sell.
Recommendation Reviewed: February 27, 2026
Recommendation Changed: December 04, 2025
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Search topics about wealth insights and investments.Alibaba
- Sector: Technology Media and Telecommunications
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 15 Sep 2025We maintain our O/P recommendation on BABA post its decent F1Q26 results; topline growth missed expectations, EBITDA margin fell 1 ppt, and FOCF turned negative; that said, gross leverage remained modest, with a strong net cash position intact. We view BABA as a core holding in China/Asia IG credits, and it is our preferred duration play. Its longer duration bonds trade ~40 bp wider than Chinese SOEs of similar tenors. In particular, we like BABA 2035. Within China tech credits, we prefer BABA over BIDU/JD, which are rated 1-2 notches lower but trade only marginally wider. We also view BABA to be more defensive compared to high beta BBB China tech credits while offering value.
Business Description
AS OF 15 Sep 2025- Founded in 1999, Alibaba is the largest retail commerce company in the world based on gross merchandise volume (GMV) as of 31 March 2023.
- The company's business segments comprise Taobao & Tmall Group (39% of F4Q25 revenue; China e-commerce incl. Taobao, Tmall, Taobao Deals, Taocaicai, 1688.com), International Digital Commerce (13%; incl. Lazada, AliExpress, Trendyol and Daraz), Cloud Intelligence Group (11%; incl. AliCloud, AI), logistic provider Cainiao (8%), Local Consumer Services (6%; incl. Ele.me, Amap), and Digital Media and Entertainment (2%, incl. Youku & Alibaba Pictures) and Others (21%; incl. Freshippo, Fliggy, Alibaba Health, Intelligent Information Platform, SunArt, DingTalk).
- Taobao/Tmall is Alibaba's core business and the main EBITA & cash generation unit of the group. Alibaba's annual active consumer exceeded 1 bn in June-2022.
- Alibaba had a market capitalization of RMB 2.7 tn as of 15 September 2025.
Risk & Catalysts
AS OF 15 Sep 2025While Chinese policymakers have adopted an increasingly friendly stance towards tech platforms, regulatory clampdown (e.g. anti-monopoly guidelines, data security laws, personal information protection laws) may still affect Alibaba as it increases compliance cost. 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).
Intensifying competition amongst eCommerce platforms may result in slower topline growth and weaker EBITDA margins.
Alibaba does not control Alipay but relies on Alipay to conduct substantially all the payment processing and escrow services on its marketplaces.
US-China tension may escalate under the new Trump Administration, including additional chip sanctions, which may result in higher volatility. Failing to secure a stable supply of advanced AI chips and/(or) find domestic alternatives could weigh on the long-term AI development of Alibaba against international peers.
Key Metric
AS OF 15 Sep 2025| CNY BN | FY22 | FY23 | FY24 | FY25 | LTM F1Q26 |
|---|---|---|---|---|---|
| Debt to Book Cap | 11.6% | 12.6% | 13.3% | 17.5% | 17.5% |
| Debt/Total Equity | 13.1% | 14.4% | 15.3% | 21.2% | 21.2% |
| Debt/Total Assets | 8.3% | 9.2% | 9.7% | 12.8% | 12.6% |
| Gross Leverage | 0.9x | 0.9x | 0.9x | 1.2x | 1.2x |
| Interest Coverage | 32.2x | 29.6x | 24.0x | 20.7x | 19.9x |
| EBITDA Margin | 18.5% | 20.2% | 20.3% | 19.9% | 19.6% |
CreditSight View Comment
AS OF 26 Nov 2025We maintain our O/P recc on Alibaba post its F2Q26 results; topline growth accelerated and was ahead of expectations; but EBITDA margin weakened due to hefty spending to expand its quick commerce segment; FOCF turned negative due to elevated capex for cloud and quick commerce; gross leverage weakened and net cash shrunk; that said, we still expect the company to maintain its net cash position over the next 6 months, and we project for its debt metrics to recover in FY27. We view Alibaba as a core holding in China and Asia IG credits, and it is our preferred duration play. Alibaba now trades on average 10 bp wider than Asia A corporate and 30 bp wider than Chinese SOEs which we view as attractive. We like BABA 5.25% 2035 for 30 bp of spread pick up against Chinese SOEs of similar tenors.
Recommendation Reviewed: November 26, 2025
Recommendation Changed: August 05, 2022
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Search topics about wealth insights and investments.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 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 08 Dec 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: December 08, 2025
Recommendation Changed: September 07, 2020
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