Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 We saw two-way flows from PBs on AT1s this morning. EHICAR 26 gained0.6pt. LNGFOR 28 was 0.4pt higher. ACPM 4.85 Perp was 1.4pts lower.VNKRLE 27 was 0.7pt lower, while VNKRLE 29 edged 0.1pt higher. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk RAKUTN:FY25 financial targets achieved, deleveraging on track. Seebelow. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk UPLLIN:UPL Ltd approved group reorganization plan; to list pure-play cropprotection arm. UPLLIN 28-30 were unchanged this morning. Trading desk comments交易台市场观点 Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Last Friday,flows were light amid onshore CNY holiday. ORIEAS 26-29closed 1bp wider. ZHOSHK 28 tightened 1bp. FRESHK 26-29 were 1bptighter to 2bps wider. EHICAR 26 leaked 1.2pts, while EHICAR 27 closedunchanged.In HK,the NWDEVL/VDNWDL complex gained 0.1-7.7pts.LASUDE26/FAEACO 12.814 Perp/LIFUNG 5.25 Perp edged 0.4-0.5pthigher. SHUION 26-29 were 0.1-0.3pt firmer. The Macau gaming complexwere unchanged to 0.2pt higher. See our comments on MPEL/STCITY on16Feb’26. In Chinese properties, VNKRLE 27-29 rose 1.7-2.0pts. FUTLAN28/FTLNHD 26-27/LNGFOR 27-32 were 0.2-1.2pts higher. DALWAN 28swere 0.2-0.3pt higher. In SE Asian space, BBLTB/OCBCSP/KBANK T2s andTOPTB 30-50s widened 1-3bps. PTTGC Perps were down by 0.2-0.3pt.VEDLN 28-33s were unchanged to 0.4pt higher. The ReNew Energy complexand IHFLIN 27-30 traded 0.1-0.2pt higher. SMCGL Perps were unchangedto 0.1pt higher. ACPM Perps were 0.5pt lower to 1.3pts higher. Mediareported that Ayala Corp.’s property developer subsidiary plans to spend upto USD1.4bn in 2026 for its offices and mall leasing businesses. VLLPM 27lost 1.3pts, while VLLPM 29 was 0.5pt higher. In JP space, RESLIF 6.875Perp was 0.1pt firmer. In the Middle East, ARAMCOs and long-end KSAswere 0.4pt lower to 0.3pt higher. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+0.69%), Dow (+0.47%) and Nasdaq (+0.90%) were higher on last Friday. US 4Q25 GDP was+1.4% qoq, lower than the market expectation of +2.8% qoq. US Dec’25 Core PCE Price Index was +0.4%mom/+3.0% yoy, higher than themarket expectation of +0.3% mom/+2.9% yoy, respectively. S&P Global Feb’26Manufacturing/Services PMI was 51.2/52.3, lower than the market expectation of 52.4/53.0, respectively. 2/30year UST yield was higher on last Friday. 2/5/10/30 year yield was at 3.48%/3.65%/4.08%/4.72%. Desk Analyst Comments分析员市场观点 RAKUTN:FY25 financial targets achieved, deleveraging on track We maintain buy on RAKUTN 5.125 Perp and RAKUTN 8.125 Perp, in view of the yield pick-up and good carrywithin the RAKUTN curve. At 99.8, RAKUTN 5.125 Perp is trading at YTC of 5.9%, offering yield pick-up of131bps over RAKUTN 11.25 02/15/27. RAKUTN 8.125 Perp is trading at YTC of 6.9% at 103.9, offering yield-pick up of 130bps over RAKUTN 9.75 04/15/29 with 8 months longer in “tenor”. We continueto view a good chance of Rakuten calling its perps on their respective first call dates, in view of itsimprovingoperating performance and good access to various funding channels.We have a neutralrecommendation on RAKUTN 6.25 Perp as we prefer shortertenor given our expectation of higher rate volatility. Rakuten achieved its FY25 financial targets, expanding consolidated non-GAAP operating income to JPY106bnfrom JPY7bn in FY24, and delivering full-year EBITDA profitabilityfor Rakuten Mobile. In FY25, Rakuten’srevenue rose 10% yoy to JPY2.5tn while EBITDA jumped 34% yoy to JPY436bn, supported by growth acrossall three segments. Internet Services segment revenue increased 7% yoy to JPY1.4tn, driven by core businesses Rakuten Ichibaand Rakuten Travel, alongside profitability improvement in growth businesses such as logistics. FinTechsegment revenue rose 19% yoy to JPY976bn on an expanding customer base and transaction volumes acrossall businesses. Mobile segment revenue grew 10% yoy to JPY483bn, underpinned by solid increase in bothnet ARPU and subscriber numbers. Net ARPU increased to JPY2,467 in 4Q25 from JPY2,408 in 4Q24(+JPY59), while total subscribers reached the 10mn target as of Dec’25, up from 8.0mn a year earlier. Operating income dropped 73% yoy to JPY14bn, primarily due to the absence of a JPY107bn re-measurementgain on AST SpaceMobile shares recognized in FY24 when the investment was reclassified from equity methodto financial assets, as well as JPY51bn higher impairment losses in FY25 mainly from Rakuten SymphonyOpen RAN and logistics businesses. Net loss narrowed 5% yoy to JPY123bn. Despite the net loss, operating cash flow of JPY424bn sufficiently covered capex of JPY206bn. We expectRakuten to fund itscapex with internal resources given its sizable cash position and positive operating cashflow. Net cash declined to JPY268bn as of Dec’25 from JPY709bn as of Dec’24, reflecting lower operating cashgeneration and bond redemptions during the year. Rakutensuccessfully accessed lower-cost onsh