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Sector: Technology Media and Telecommunications
Meta Platforms
- Sector: TechnologyTechnology Media and Telecommunications
- Sub Sector: Technology
- Country: US
- Bond: META 4.95 33
- Indicative Yield-to-Maturity (YTM): 4.95%
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Fundamental View
AS OF 19 Dec 2025Meta delivered strong revenue growth in its 3Q25 results and 4Q25 guidance, which were both above consensus expectations. However, total expenses are now expected to grow “significantly” faster in 2026 relative to the 22-24% YoY implied growth in 2025. Also, capex will have “notably larger” dollar growth in 2026. We estimate this could imply $115-120 capex or ~50% of sales in 2026. As a result, we expect FCF to be pressured in 2026.
Meta just launched $30 bn IG bonds which is on the heels of the recent $27 bn off balance sheet Meta JV bond deal. Pro forma for $30 bn issuance, gross leverage is 0.5x (0.2x at 3Q25) and lease-adjusted leverage is 0.7x (0.4x at 3Q25). Net cash was $15.6 bn at 3Q25. Meta recently prevailed in the FTC’s monopoly litigation.
Business Description
AS OF 19 Dec 2025- Meta Platforms is the largest social networking company in the world. Meta's advertising revenue is primarily from Facebook and Instagram, although also on Messenger, Whatsapp, Threads, and third-party affiliated websites and apps.
- In 3Q25, Family of Apps was 99% of revenue (97.7% from advertising and 1.3% from other) and Reality Labs was 1% of revenue. Reality Labs generated $18.1 bn in operating losses during LTM 3Q25.
- There are 3.54 bn Family Daily Active People (DAP) as of 3Q25, and the Family Average Revenue per Person (ARPP) was $14.46 quarterly in 3Q25.
- Meta is headquartered in Menlo Park, California. Employee headcount was >78.4k at 3Q25.
Risk & Catalysts
AS OF 19 Dec 2025We continue to expect Meta to be a regular/annual issuer to fund its shareholder returns, operating losses in Reality Labs, and substantial investments in AI.
Meta recently prevailed in the FTC’s monopoly litigation. In December 2020, the FTC filed a lawsuit against Meta seeking to unwind prior acquisitions of Instagram and Whatsapp.
Meta’s business model relies almost entirely on user-generated content, exposing it to customer privacy concerns and regulatory scrutiny in the US and Europe.
Key Metric
AS OF 19 Dec 2025| $ mn | 2021 | 2022 | 2023 | 2024 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue YoY % | 37.2% | (1.1%) | 15.7% | 21.9% | 21.3% |
| EBITDA | 63,882 | 49,622 | 71,955 | 101,568 | 118,359 |
| EBITDA Margin | 54.2% | 42.6% | 53.3% | 61.7% | 62.5% |
| CapEx % of Sales | 16.3% | 27.5% | 20.8% | 23.8% | 34.3% |
| Sh. Ret. % of CFO-CapEx | 116% | 152% | 46% | 68% | 74% |
| Net Debt | (47,998) | (30,815) | (47,018) | (48,989) | (15,614) |
| Gross Leverage | 0.0x | 0.2x | 0.3x | 0.3x | 0.2x |
| EV / EBITDA | 14.0x | 5.8x | 12.3x | 14.5x | 15.8x |
CreditSight View Comment
AS OF 29 Jan 2026Meta’s advertising revenue growth has been impressive in recent years. However, the company is spending heavily on both capex for AI infrastructure and operating losses in Reality Labs. In addition, its AI models have lagged US peers. Capex is guided for $115-135 bn in 2026, which is up substantially from $72 bn in 2025. Gross lease-adjusted leverage increased to 0.7x at 4Q25 driven by its $30 bn bond deal. We are concerned that another jumbo bond deal will lead to technical pressure on its bonds and worsening credit metrics. Meta commented it might eventually move into a net debt position, which reflects a change in its financial policy. We recently highlighted this as a potential risk that could lead to ratings downgrades. Meta continues to face legal and regulatory headwinds.
Recommendation Reviewed: January 29, 2026
Recommendation Changed: July 31, 2025
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Search topics about wealth insights and investments.Amazon.com
- Sector: ConsumerTechnology Media and Telecommunications
- Sub Sector: Retail/GrocersTechnology
- Region: US
- Bond: AMZN 4.65 29
- Indicative Yield-to-Maturity (YTM): 3.99%
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Fundamental View
AS OF 19 Dec 2025We continue to have confidence in CEO Andy Jassy and the company’s long-term business for both AWS and Stores. AWS is a $132 bn run-rate business growing at 20% with GAAP operating margins in the 30s%. The 3Q25 results and commentary supports our view that Amazon will be a winner in Generative AI given the breadth of its cloud business, custom silicon (Trainium), and Bedrock service.
While AMZN’s capex has been ramping, along with other hyperscalers, we are encouraged by its debt reduction over the past few years and zero shareholder returns. There are risks related to its ongoing FTC suit although we view a breakup as unlikely. Pro forma for $15 bn issuance and $1.25 bn upcoming maturity, gross lease-adjusted leverage will increase by one tick to 1.0x.
Business Description
AS OF 19 Dec 2025- Amazon is an e-commerce company which sells a wide range of its own products and those of 3rd party sellers. Amazon offers fulfillment services for 3rd party sellers (FBA) and sells cloud computing services (AWS). In 3Q25, 3rd party units were 62% of total paid units, and FBA units are a majority of 3rd party units.
- In LTM 3Q25, NA segment was 60% of sales, International was 22% of sales, and AWS was 18% of sales.
- Amazon disclosed it surpassed 200 mn Prime members in April 2021. The annual membership was increased in February 2022 from $119 to $139 in the US, although fees vary by country. In mid-2019, Amazon Prime began to transition from 2-day to 1-day shipping. Amazon Prime also offers Prime Video, streaming music, and other benefits.
- In 2006, Amazon launched AWS which remains the leader in cloud computing (IaaS/PaaS). Amazon sells its own devices (e-reader, smart speaker, streaming media player, etc.).
Risk & Catalysts
AS OF 19 Dec 2025We think Amazon has moderate event risk given its large size (~$2.4 tn market cap).
Amazon’s capex has been ramping for AI cloud infrastructure, which could lead to more jumbo bond deals in 2026.
In September 2023, the FTC and a consortium of states filed a lawsuit against Amazon and accused the company of (1) punishing sellers for offering lower prices elsewhere and (2) making Prime eligibility conditional on usage of fulfillment services. Motions for summary judgment are not due until August 2026 with a trial scheduled for February 2027. The biggest risk would be a breakup, although we view that as unlikely.
Amazon’s $14 bn acquisition of Whole Foods has shown its proclivity for large M&A.
Key Metric
AS OF 19 Dec 2025| $ mn | 2020 | 2021 | 2022 | 2023 | 2024 | LTM 3Q25 |
|---|---|---|---|---|---|---|
| Revenue YoY % | 37.6% | 21.7% | 9.4% | 11.8% | 11.0% | 11.5% |
| EBITDA | 57,284 | 71,994 | 74,593 | 110,305 | 144,162 | 161,740 |
| EBITDA Margin | 14.8% | 15.3% | 14.5% | 19.2% | 22.6% | 23.4% |
| CapEx % of Sales | 12.1% | 13.3% | 11.5% | 8.5% | 12.3% | 17.1% |
| Sh. Ret. % of CFO-CapEx | 0% | 0% | n/m | 0% | 0% | 0% |
| Net Debt | (50,497) | (44,453) | 8,516 | (19,451) | (43,051) | (38,880) |
| Gross Leverage | 0.6x | 0.7x | 1.1x | 0.6x | 0.4x | 0.3x |
| EV / EBITDA | 28.3x | 23.3x | 11.7x | 14.4x | 16.1x | 14.5x |
CreditSight View Comment
AS OF 17 Nov 2025We continue to have confidence in CEO Andy Jassy and the long-term business for AWS and Stores. AWS is a $132 bn run-rate business growing at 20% with GAAP OM% in the 30s%. The 3Q25 results and commentary supports our view that Amazon will be a winner in Generative AI given the breadth of its cloud business, custom silicon (Trainium), and Bedrock service. While AMZN’s capex has been ramping, along with other hyperscalers, we are encouraged by its debt reduction over the past few years and zero shareholder returns. There are risks related to its ongoing FTC suit (not the one that was recently settled on Prime subscriptions) although we view a breakup as unlikely. Pro forma for $15 bn issuance and $1.25 bn upcoming maturity, gross lease-adjusted leverage will increase by one tick to 1.0x.
Recommendation Reviewed: November 17, 2025
Recommendation Changed: May 01, 2024
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Search topics about wealth insights and investments.Tencent
- Sector: Technology Media and Telecommunications
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 28 Nov 2025We maintain our O/P recommendation on Tencent. In 3Q25, revenues accelerated and were ahead of expectations, EBITDA margin expanded on an improved revenue mix, FOCF remained robust, debt metrics improved. We view Tencent as a core holding in China and Asia IG credits, and it is our preferred duration play. While valuations of Tencent is less compelling compared to YE24, its longer duration bonds still offer ~20 bp of spread pick up against Chinese SOEs of similar tenors. We like Tencent’s strong and improving credit outlook compared to its Chinese tech peers, rock solid balance sheet and robust free operating cash flow. We prefer its 2041 bond which offer the highest 20-35 bp spread pick up against Asia A corporate and Chinese SOEs
Business Description
AS OF 28 Nov 2025- Founded in November 1998, Tencent is a leading provider of Internet value added services in China. Since its establishment, Tencent has ventured into instant messaging, social networking, online payments, digital entertainment, and PC and smartphone gaming. Most recently, it has also forayed into high-tech areas such as artificial intelligence, and cloud computing.
- Tencent's leading Internet platforms in China include Weixin/WeChat (online messaging), QQ Instant Messenger (online messaging), Tencent Games (gaming), Tencent Video/Weixin Video Accounts (video platforms), WeChat Pay (payments), and Tencent Cloud. The combined monthly average users (MAU) of Weixin and Wechat reached 1.40 bn as of 31 March 2025.
- In 3Q25, 50% of revenues came from Value Added Services (which consist of Domestic Games, International Games, and Social Networks), 30% came from FinTech and Business Services (e.g. commercial payments and cloud), and 19% from Online Advertising.
- Tencent is currently primarily listed on the Hong Kong Stock Exchange, with a market capitalization of HKD 5.6 tn as of 27 November 2025.
Risk & Catalysts
AS OF 28 Nov 2025While Chinese regulators have adopted a more friendly stance towards tech companies, any regulatory clampdowns abroad and domestically (e.g. antitrust rules, data security, personal information protection laws) may affect Tencent’s business. Tencent’s gaming, music streaming, and online payment units are among those that have come under regulatory scrutiny in the past.
Tencent uses variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers, which poses regulatory risks. Specifically, VIE transactions involving “change in control” will be subject to antitrust regulatory processes.
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 Tencent against international peers.
Key Metric
AS OF 28 Nov 2025| RMB bn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 27.0% | 31.4% | 29.8% | 25.4% | 24.5% |
| Net Debt to Book Cap | 6.0% | 8.5% | 1.0% | 2.3% | 1.4% |
| Debt/Total Equity | 36.9% | 45.9% | 42.5% | 34.0% | 32.5% |
| Debt/Total Assets | 20.1% | 22.8% | 23.5% | 20.1% | 19.7% |
| Gross Leverage | 1.7x | 1.9x | 1.6x | 1.3x | 1.2x |
| Net Leverage | 0.4x | 0.5x | 0.1x | 0.1x | 0.1x |
| Interest Coverage | 24.7x | 19.0x | 19.9x | 22.5x | 24.4x |
| EBITDA Margin | 34.9% | 34.3% | 38.9% | 42.4% | 45.0% |
CreditSight View Comment
AS OF 14 Nov 2025We maintain our O/P recommendation on Tencent. In 3Q25, revenues accelerated and were ahead of expectations, EBITDA margin expanded on an improved revenue mix, FOCF remained robust, debt metrics improved. We view Tencent as a core holding in China and Asia IG credits, and it is our preferred duration play. While valuations of Tencent is less compelling compared to YE24, its longer duration bonds still offer ~20 bp of spread pick up against Chinese SOEs of similar tenors. We like Tencent’s strong and improving credit outlook compared to its Chinese tech peers, rock solid balance sheet and robust free operating cash flow. We prefer its 2041 bond which offer the highest 20-35 bp spread pick up against Asia A corporate and Chinese SOEs
Recommendation Reviewed: November 14, 2025
Recommendation Changed: August 18, 2022
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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 04 Feb 2026We expect T-Mobile will maintain its impressive combination of industry leading subscriber and HSD EBITDA growth into 2026 and beyond. T-Mobile also boasts the lowest leverage (~2.5x) 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: February 04, 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 3 35
- Indicative Yield-to-Maturity (YTM): 4.95%
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Fundamental View
AS OF 18 Nov 2025Globe’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 2025Globe 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% |
CreditSight View Comment
AS OF 08 Dec 2025We have a Market perform recommendation on Globe with a preference for its c.2026 perp. Globe 2030 trades slightly wider to PLDT 2031 that we view as fair. Globe c.2026 perp trades at a juicy 1.4x perp-to-Globe 2030 senior multiple that we view as attractive for short-dated “IG” paper. We anticipate a modestly improving credit outlook as lower capex and residual tower sales closures are offset by a continued weak broadband business and sticky dividends. Stiff competition in both the mobile and broadband spaces is a key concern too. 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: December 08, 2025
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 03 Feb 2026We downgrade PLDT to Underperform from Market perform. 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, non-core tower sales, 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. A minority stake sale of its data center business is also credit positive, though progress is seemingly elusive.
Recommendation Reviewed: February 03, 2026
Recommendation Changed: February 03, 2026
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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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