Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 Asian IG space was unchanged to 3bps wider this morning. We saw betterselling on MEITUA/SUMIBK/NTT/HYNMTR. Middle East names reboundedback to c0.5pt higher. NWDEVL 28 gained 0.5pt. HYSAN 4.85 Perp lost0.9pt. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk WESCHI:Strong FY25 results offset by weakness in 2H25. Maintain buy onWESCHI 28-29, which were unchanged this morning. See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk VEDLN:NCLAT directed Vedanta Ltd to make Adani a party in petitionschallenging Jaiprakash Associates’ resolution. VEDLN 28-33s were 0.5-2.7ptslower yesterday and were unchanged this morning. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点  Yesterday,the macro backdrop was very weak on the higher UST rates andhigher oil given the concerns of the war among Israel, US and Iran wasescalating.VNKRLE 27’ and 29’ dropped 3.6-4.9pts. The VNKRLE bondshavelost c10pts since 12 Mar’26. There has been lack of progress on therumored rescue package from the Shenzhen municipal government for ChinaVanke.FUTLAN 28/FTLNHD 27-29/LNGFOR 27-32 leaked 0.3-1.5pts.EHICAR 26-27 were unchanged to 0.4pt lower.EHi launched exchange offerand concurrent exit consent for EHICAR 7 09/21/26. HONGQI 28s were 0.3ptweaker post FY25 results, reflecting largely stable operating results andnotably lower leverage.See our comments on EHICAR and HONGQIyesterday. WESCHI 28-29 lost 1.2-1.7pts. See comments on West ChinaCement’s FY25 results below. FOSUNI 26-29 were up to 1.2pts lower. In SEAsianspace, IHFLIN 30 were down by 3.5pts. VEDLN 28-33s leaked 0.5-2.7pts. Vedanta Group has filed two appeals before the NCLAT against theNCLTorder approving Adani Enterprise’s bid for insolvent JaiprakashAssociates. GLPSPs/GLPCHI lost 1.3-2.3pts. SMCGL Perps were 0.2-1.1ptsweaker.In Chinese IG space, 5-10yr MEITUA/KUAISH/LENOVO widened5-10bps amid better-selling.In HK, the NWDEVL/VDNWDL complex were0.9-1.8pts lower. LASUDE 26/MTRC Perps leaked another 0.5-0.8pt after theprofit warning.TW lifers CATLIF/FUBON/NSINTW/SHIKON widened 10bps.KR and JP IG space was also 5-10bps wider, amid better selling especiallyoncorporate names LGENSO/HYUELE/HYNMTR.JP and YankeeAT1s/insurance subs/perps dropped 1.0-2.0pts. In AU space, we saw betterselling on BankT2s as well as bank FRNs. In the Middle East, bond priceswere 0.5-1.5pts lower amid better selling across the curve.InLGFV space,flows remained largely two-way skewed to better selling. HFs and PBs wereselling bonds to recycle cash, driving the space25bps wider. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+1.15%), Dow (+1.38%) and Nasdaq (+1.38%) were higher on Monday. Trump said that reneweddiscussionswith Iran began soon after he threatened to bomb Iran’s energy infrastructure and he would postponethe strikes. Iran rejected Trump’s claims saying there were no negotiations with the US. UST yield was lower onMonday. 2/5/10/30 year yield was at 3.83%/3.95%/4.34%/4.91%. Desk Analyst Comments分析员市场观点 WESCHI:Strong FY25 results offset by weakness in 2H25 We maintain buy on WESCHI 28-29, in view of their good risk-return profiles, as well as West China Cement(Weschi)’s good execution of overseas expansion strategy, and considerably relieved refinancing risk followingthe “friendly” LMEs in Dec’25 and Feb’26, and subsequently early redemption of WESCHI 4.95 07/08/26in fullon 6 Mar’26. Weschi reported a 15.3% yoy increase in revenue in FY25, mainly driven by higher salesvolumes, partiallyoffset by lower ASPs in both China and overseas markets. Gross profit increased 24.6% yoy to RMB2.5bn withGPM expanded to 25.6%, as the benefit from lower production costs more than offset the drag from weakerASPs. By geography, overseas revenue and GP contribution rose to 49% of total revenue and 80% of total GPin FY25, from 38% and 67% in FY24, respectively, reflecting the continued strategic shift away from domesticoperations. EBITDA rose 14.6% yoy to RMB3.0bn in FY25 on the backof higher gross profit, though EBITDA margin edgeddown slightly to 31.3% due to higher SG&A expenses. A net reversal of impairment on trade and loanreceivables of RMB79.7mn, compared to an impairment charge of RMB54.9mn in FY24, provided an additionalsupport to net profit, which grew 31.3% yoy to RMB1.1bn in FY25. As we wrote before, Weschi’s overseas operations are gaining greater strategy importance underpinned by theramp-up of overseas production capacity, and the ongoing disposal of non-core Chinaoperations. These reflectWeschi’s broader strategic pivot towardsmore profitableoverseas markets, as the domestic cement sectorcontinued to face overcapacity and pricing pressure. In Aug’25, Weschi divested its entire operations in Xinjiang provinces,totaling 3.5mn tons of cement capacity, for a total consideration of RMB1.65bn. The CILU acquisition,which extended Weschi’s footprint into western DRC,