20260819-招银国际-Fixed_Income_Daily_Market_Update_5页_445kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a comprehensive market update and analysis from the Fixed Income Department of CMBI, focusing on Asian and global fixed income markets, key corporate credit movements, and macroeconomic developments. It also includes insights on Xiaomi's financial performance and credit profile, as well as details on recent and upcoming bond issuances in the offshore Asia market.

Market Update

Asia IG Spreads

• Asia Investment Grade (IG) spreads remained unchanged.
• AT1s (Additional Tier 1 bonds) saw PB (Primary Broker) buying activity.
• CNH LUSOIB 3.6 Perp gained 0.4pt from RO at par but retraced to par by noon.
• USD LUSOIB 6.6 Perp rose 0.2pt on limited flows.
• GLPSP 4.6 Perp/WESCHI 28 declined by 0.4-0.5pt.

Global Market Movements

• UST yields saw a sell-off, with the 30-year UST yield reaching its highest level since 2007.
• Korean industrial names (HYUELE, LGENSO, SKBTAM, MOMPER) faced block liquidations, pushing bonds 3-7bps wider.
• Korean financials (DAESEC, NHSECS, HANFGI) closed 2-4bps wider.
• Japanese FRNs remained resilient, closing unchanged or 1bp wider.
• SE Asia saw the new ICICI 31s tighten 10bps from RO at T+105, pulling the curve tighter by 2-3bps.
• BBLTB sub curves '34s/'36s/'40s absorbed better selling flows, with spreads remaining unchanged.

Higher-Yielding Space

• European and Japanese AT1s and insurance subs weakened by 0.2-0.5pt due to rising oil prices and rates.
• Asia flows were skewed toward AM (Asset Manager) selling as accounts trimmed risk.
• PB activity was mixed, with some front-end dip buying.
• European names recovered 0.1-0.3pt in the London session, driven by short covering and clearer PB buying.
• CNH Chinese RMs added 10yr risk in high-grade names such as CHGRID, TMTs, and PSASP, with bonds edged 0.1-0.3pt higher.
• CNH LGFVs remained very well bid, with yields compressing by 5-10bps.
• USD LGFVs were mixed, with demand persisting for bonds yielding 6-7% or more, while those yielding inside the low-5% area or around +100bps over the CT2 were better offered.

Xiaomi Credit Analysis

Financial Performance

• 2Q26 Revenue declined by 6.1% yoy to RMB108.9bn.
• Operating profit fell 19.1% yoy to RMB10.9bn.
• Adj. net profit dropped 42.6% yoy to RMB6.2bn.
• Gross margin compressed to 19.8% from 22.5% in 1H25.
• Smartphone × AIoT segment revenue declined 11.3% yoy to RMB84.0bn, with shipments falling 26.5% yoy.
• Smart EV segment revenue increased 17.1% yoy to RMB24.9bn, with deliveries up 28.2% yoy to 104k units, but segment gross margin declined to 19.2% from 26.4%.

Credit Profile

• Xiaomi's liquidity profile remained strong, with net cash at RMB82.4bn as of Jun'26, up 31.2% from Mar'26.
• Cash/ST debt ratio improved to 3.8x.
• Despite weakened operating performance, Xiaomi's credit profile is considered solid, supported by its strong liquidity position.

Investment Recommendations

• Maintain buy on Xiaomi 3.375 04/29/30 and Xiaomi 2.875 07/14/31.
• Prefer BBB-rated bonds over A-rated ones due to more balanced risk-return profiles.
• Favor 3-5 year tenors due to expectations of high UST volatility, especially in the long-end of the curve.
• Prefer MEITUAs for their more solid credit and liquidity profiles.

Offshore Asia New Issues

Priced Issues

Pipeline Issues

Macro News Recap

• U.S. indices (S&P, Dow, Nasdaq) declined on Tuesday.
• UST yields were lower, with 2/5/10/30 year yields at 4.19%/4.37%/4.71%/5.28%.
• Onshore primary issuances totaled RMB182bn yesterday, with a 1% yoy increase in month-to-date issuance.
• SOFTBK plans a JPY1tn retail bond sale.
• ReNew Energy reported a 16.0% yoy increase in total income to INR47.8bn (cUSD506mn) in 1QFY27.

Important Disclosures

• The report contains investment risks and is not suitable for all investors.
• CMBIGM does not provide individually tailored advice.
• Information is based on publicly available data and not guaranteed for accuracy or completeness.
• The report is intended for specific recipients, including major US institutional investors, and may not be distributed to others.
• CMBIGM may have conflicts of interest and is not liable for any losses incurred from reliance on the report.
• In Singapore, the report is distributed by CMBISG, an Exempt Financial Adviser, and may only be provided to Accredited Investors, Expert Investors, or Institutional Investors.

Author Certification

• The author certifies that all views expressed reflect personal opinions.
• The author has no financial interest in the companies mentioned and is not involved in any transactions related to the report.