Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

Health and Happiness H&H International Holdings Ltd provides health care supplements. The Company offers pediatric nutritional and baby care products. Health and Happiness H&H International Holdings serves nutrition and wellness industries worldwide.

<ul>
<li>We initiate our coverage on Health and Happiness International Holding Limited (H&amp;H)’s BTSDF 9.125% 24Jul2028.</li>
<li>H&amp;H has refinanced USD320m of 2026 notes with the new USD300m of 2028 notes at a 9.125% coupon. The new bonds help extend its debt maturity and lower financing cost.</li>
<li>The bonds offer diversification and a chance to invest back in China after the fallout in the property sector. We assign an OVERWEIGHT recommendation.</li>
</ul>


We initiate our coverage on Health and Happiness International Holding Limited (H&amp;H)’s BTSDF 9.125% 24Jul2028.
H&amp;H has refinanced USD320m of 2026 notes with the new USD300m of 2028 notes at a 9.125% coupon. The new bonds help extend its debt maturity and lower financing cost.
The bonds offer diversification and a chance to invest back in China after the fallout in the property sector. We assign an OVERWEIGHT recommendation.


iShares MSCI Thailand Capped ETF is an exchange-traded fund incorporated in the USA. The ETF seeks investment results that correspond to the performance of the MSCI Thailand IMI 25/50 Index.

<ul>
<li>This report will be different as we look into the latest THB bond offerings and give our opinion to Thai retail investors. </li>
<li>Thai rates will continue to be depressed in an attempt to spur the economy.</li>
<li>For Thai retailed investors, we believe Sermsang Power’s 2.33-year THB bonds with 4.5% are the most attractive among peers.</li>
</ul>


This report will be different as we look into the latest THB bond offerings and give our opinion to Thai retail investors. 
Thai rates will continue to be depressed in an attempt to spur the economy.
For Thai retailed investors, we believe Sermsang Power’s 2.33-year THB bonds with 4.5% are the most attractive among peers.


Asian Bond Monitor: Baht Bond Bummers (“BBB”)

CHINAGOV CDS USD SR 5Y D14 (CCHIN1U5 CORP)

<ul>
<li>Asian USD high-yield bonds have outperformed on an improving sentiment toward emerging market credits.</li>
<li>China 5-year CDS has declined 14 bps since June and we expect non-property Chinese credits to have more capital inflow on  the hunt for a better yield.</li>
<li>We are in favor of Chinese high-yield credits with recurring revenue and operate in more defensive industries such as consumer non-discretionary, utilities, and pharmaceuticals.</li>
</ul>


Asian USD high-yield bonds have outperformed on an improving sentiment toward emerging market credits.
China 5-year CDS has declined 14 bps since June and we expect non-property Chinese credits to have more capital inflow on  the hunt for a better yield.
We are in favor of Chinese high-yield credits with recurring revenue and operate in more defensive industries such as consumer non-discretionary, utilities, and pharmaceuticals.


Asian Bond Monitor: Chinese Bonds Are Back

Debt Capital Markets

iShares MSCI Thailand / Debt Capital Markets

<ul>
<li>We sample blue-chip and household Thai corporations and plot the 12-month probability of default (PD) using iRAP</li>
<li>The median 12-month PD of the above samples was 11.15 basis points (bps), up from 5bps last November, with a trend showing continuing deterioration in the next 12 months</li>
<li>We expect more political upheaval and economic adjustment from the military conflict with Cambodia and the19% tariff on exports to the US to be quite detrimental to the Thai economy.</li>
</ul>


We sample blue-chip and household Thai corporations and plot the 12-month probability of default (PD) using iRAP
The median 12-month PD of the above samples was 11.15 basis points (bps), up from 5bps last November, with a trend showing continuing deterioration in the next 12 months
We expect more political upheaval and economic adjustment from the military conflict with Cambodia and the19% tariff on exports to the US to be quite detrimental to the Thai economy.


Bond Market Monitor: Thai Corporations UnSmiled

Macroeconomics

<ul>
<li>We chose to objectively focus on Thailand’s institutional debacle in relation to the recent book called “Why Nations Fail”</li>
<li>Thai Baht (THB) yields have remained too low, relative to Thailand’s country risk.</li>
<li>This report is not so much about the low yield but rather the operating environment which we believe non-Thai investors can appreciate our local point of view.</li>
</ul>


We chose to objectively focus on Thailand’s institutional debacle in relation to the recent book called “Why Nations Fail”
Thai Baht (THB) yields have remained too low, relative to Thailand’s country risk.
This report is not so much about the low yield but rather the operating environment which we believe non-Thai investors can appreciate our local point of view.
