汇丰银行亚洲信贷策略债券市场观察

1、Fixed IncomeAsia CreditJuly 2019By: HSBC Asia credit research teamDisclosures & Disclaimer: This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. The VIEW Asias Bond MarketsWe revisit China HY ind

2、ustrials as supply diminishes and value emerges. Within the sector, we are bullish on HY oil and neutral on HY consumer.Also insideFor Asia credit strategy, we believe investors should use the ongoing rally as an opportuto reduce risk.Postcard from our investor tour in China suggested a healthy prop

3、erty market.Play interview with Reks Ng获取报告1、2、3、每周群内7+报告；当日华尔街日报、4、行研报告均为公开利归原作者所有，起点财经仅分发做内部学习。扫一扫 关注公号回复：加入“起点财经”群。Fixed Income Asia CreditJuly 2019THIS CONTENT MAY NOT BE DISTRIBUTED TO THE PEOPLES “PRC”) (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF(THE AND MACAO)EditorialTo many, it might be an

4、 easy call to underweight China high-yield (HY) industrials on a sector basis, citing the high default rate, weak financing capability versus property counterparts, and depressed margins stemming from fierce competition. The weak trading liquidity often makes things worse its not uncommon to see a l

5、arge intraday swing even on days with limited relevant industry news. However, its unfair to judge every issuer on this basis. Some names in this sector display qualities traditionally favoured by fixed income investors, such as fast growth, clear deleveraging efforts, valuable fixed assets, and ind

6、ustry leadership. We think some of these qualities are underappreciated as a result of the defaults in the sector. This might be a blessing in disguise. In the HY industrial sector, there is currently a clear differentiation between the stronger credits which can issue repeatedly, and the weaker one

7、s which are heavily penalized by the market after initial pricing. This trend is evident in the gross issuance number, with most of the y-t-d issuance coming from repeat issuers rather than debut issues. We think the reduced supply is another reason to revisit the sector as value emerges, especially

8、 as itoffers opportunities to diversify, especially for portfolios that are dominated by HY property.From a Credit Strategy perspective, we believe the ongoing Asia credit market rallies shouldbe used as an opportufor investors to reduce risk in their portfolios. Based on ratings, iBoxxADBI credit q

9、uality has been on a less favourable trajectory, with the deterioration acceleratingfrom 2018 onwards. From the fundamental side, there is still noto the USadministrations negotiations with China, Japan and Europe on how to deal with the bilateral trade imbalances. So we take the view that market pl

10、ayers optimism around the delay ofadditional US tariffs as being misplaced, given that the trade and capital investment data should continue to weaken in the months ahead. HSBCs Asian economist feels that global investment could slow anywhere from 0.5-2.1ppt this year from the 3.5% growth seen in 20

11、18 as result ofthe ongoing economic policy uncertainty that is hanging over the business sector.In the CNH market, PBOC priced RMB70bn bills in 1H2019, bringing total CNH issuance to RMB166bn (bonds and CDs), 42% higher compared with the issuance in 1H2018. As most market liquidity was absorbed by P

12、BOC bills, credit bond issuance and CD issuance dropped significantly. We have revised our 2019 full-year CNH issuance forecast to RMB310-350bn from RMB210-250bn, and expect RMB460-500bn CNH bonds to be outstanding at end-2019. CNH bond yield movements mostly followed CNH government bond yields in 1

13、H2019, given thehigher portion of rates products in the space, and credit spreads moved marginally lower.Looking ahead, we expect credit bond issuance to remain subdued in the second half of the year. CNH bond performance should see some downward pressure given a potential credit spread correction.

14、However, we believe CNH bonds can still generate positive returns1 in the second half as spread compression should be limited as a large part of the CNH space iscomprised of low-beta names.1 Total return is defined as sum of capital and accrual returns in USD.1Fixed Income Asia CreditJuly 2019Indone

15、sia takes the focus in the sovereign section this month. HSBCs economist believes that labour market reforms, a reduction of FDI restrictions, the strengthening of land acquisition laws and higher educational spending are all necessary goals to lift the countrys sustainable non- inflationary growth

16、rate in the years ahead. These goals can be achieved with the return of President Joko Widodo to office for a second term with a strong voter mandate that shouldmake it easier to pass difficult legislation through parliament.On 20-21 June, HSBC Asia Credit Research team led a two-day credit investor

17、 tour to Nanjing and Hangzhou. The aim was to understand the drivers of Chinas ongoing urbanisation processas well as gauge residential property demand in the Yangtze River Delta, one of the key economicpowerhouses. We believe Chinas urbanization has scope for further development, whichcreates busin

18、ess opportunities for China Fortune Land (CHFOTN; rated NR/NR/BB-) via its exclusive industrial city public-private partnership (PPP) agreements with various local governments. We also take a more relaxed stance than the market towards property policy tightening, as it reflects the underlying streng

19、th of the residential property demand, which in turn is in line with our trip findings. We believe local governments have the flexibility to adjust propertypolicies through proactive management, as has been seen over the years.2Fixed Income Asia CreditJuly 2019This page has been left blank intention

20、ally3Fixed Income Asia CreditJuly 2019ContentsEditorial1Overview5Credit Strategy32Focus List41CNH Market48Credit ReviewTop and bottom performers of the month5463Sovereign Risk AnalysisMonthly Focus: Republic of Indonesia6566Credit ResearchChina Property HY7778Company News & AnalysisFinancial Ins

21、titutions Corporates8586103Asian Economics Desk Reference106Asia Credit Coverage110Spread and Curve Charts113AppendixHSBC Databank121122Disclosure appendix144Disclaimer1524Fixed Income Asia CreditJuly 2019China Industrial HYAfter a painful 2018 highlighted by defaults and sharp price corrections, th

22、e sector has split into different layers of qualityAs value emerges, reduced supply is another reason to revisit the sector, particularly in the yield range of 7-9%Bullish on HY oil, neutral on HY consumer; buy trading call on CARINC22uuuSorting the wheat from the chaffReks NgAnalyst, CorporatesThea

23、nd ShanghaiNavigating the minefieldTo many, it might be an easy call to underweight China high-yield (HY) industrials on a sector basis, citing the high default rate, weak financing capability versus property counterparts, and depressed margins stemming from fierce competition. The weak trading liqu

24、idity often makes things worse its not uncommon to see a large intraday swing even on days with limited relevant news. However, its unfair to judge every issuer on this basis. Some names in this report display qualities traditionally favoured by fixed income investors, such as fast growth (Health &a

25、mp; Happiness H&H), clear deleveraging efforts (West China Cement), valuable fixed assets (Golden Eagle), and industry leadership (Car Inc). We think some of these qualities are underappreciated as a result of the defaults in the sector. The reduced supply is another reason to revisit the sector

26、 as value emerges, which can be a good reason to diversify away from HYproperty given the recent noise in that sector.Banking Corporation Limited reks.ng.hkKeith ChanHead of Corporate Credit Research, Asia PacificTheand ShanghaiBanking Corporation Limited keithkfchan.hkSorting the wheat from the cha

27、ffWe define China HY industrials as all China HY issuers apart from property developers, local government financing vehicles (LGFVs), and Macau gaming operators. There are around 70 HY industrial issuers in the market with cUSD34.5bn in bonds outstanding less than a third of the size of China HY pro

28、perty market. Due to the material heterogeneity across many of the industrial sub-sectors, we take a bottom-up approach on a sub-sectoral and name basis rather than a top-down approach on the entire industrial sector. In this report, we focus on names that:1) are listed and rated; 2) are transparent

29、 in terms of corporate communications and disclosures; 3) have healthy corporate governance; and 4) have manageable near-term liquidityrisk balanced by available financing channels.Bullish on HY oil, neutral on HY consumer, buy CARINC22We are bullish on the HY oil sector on the back of the favourabl

30、e supply-demand dynamics, which should create a sweet spot for the HY oil issuers. We have a neutral view on the HY consumer sector due to the still frail growth of China retail sales, in addition to expensive valuations. On a name basis, we reiterate our buy trading call on CARINC22. We initiatecov

31、erage of Anton Oilfield Services, H&H and Gome.* This note was previously published on 5 July 2019.5Fixed Income Asia CreditJuly 2019Navigating the minefielduChina HY industrial sector is not warmly welcoming new joiners; issuance was only 16% ofthat of China HY property sector in 1H19uThe defau

32、lts and sharp price corrections in 2018 mean that the sector has segmented into different layers of qualityThe limited supply is another reason to revisit the sector as value emergesu70 HY industrial issuers, USD34.5bn bonds outstandingWe define China HY industrials as all China HY issuers excluding

33、 property developers, LGFVs, and Macau gaming operators. There are around 70 HY industrial issuers with cUSD34.5bn in bonds outstanding in this market. Its less than one-third of China HY property market(USD125bn). Of the issuers, half are listed and around 30% do not have international ratings,refl

34、ecting t.erally low level of transparency and financing capabilities of industrial issuers1. China HY industrial issuance (yearly)2. China HY industrial issuance (quarterly)18,00016,00014,00012,00010,0008,0006,0004,0002,000-6,0005,0004,0003,0002,0001,000-20152016201720181H191Q15 4Q15 3Q16 2Q17 1Q18

35、4Q18Source: Bloomberg, HSBCSource: Bloomberg, HSBCIt can be easy to step on the landminesAnnual HY industrial issuance peaked during the 2017 boom at USD16bn, almost half the level in the HY property space. The divergence between the two increased in 2018 as market turned sour. Industrial issuance w

36、as cut by half to USD8.8bn but HY property issuance rose to a record high of USD37.7bn, up 12% y-o-y. A slew of debut industrial issuers tapped the offshore dollar market in 4Q17-1Q18 before Asia credits finished the great tightening in early 2018. A good proportion of them are now trading in the 70

37、s (e.g. Yihua, Zhongrong International and Shandong Sanxing), while others defaulted (e.g. China Singyes, Gangtai). These“landmines” prompted greater investor scrutiny across the sector, from debut issuers andextended to the fundamentally stronger credits. Coupled with the macreveragingand the tight

38、ened onshore liquidity last year, even liquid benchmark HY industrial bonds have suffered from large price swings on negative news flow such as a cancellation of onshore bondissuance.6Yearly gross issuance (USDmn)Quarterly gross issuance (USDmn)Fixed Income Asia CreditJuly 20193. HY industrial is no

39、t a sector that welcomes new issuance4. USD6.5bn issuance in 1H19, dominated by the university sectorAuto1H19Conglomerate2018ConsumerEnergy2017Healthcare2016Ms and miningTMT2015Gross issance (USDmn)University-10,000 20,000 30,000 40,000Chian HY property issuance China HY industrial issuanceSource: B

40、loomberg, HSBCSource: Bloomberg, HSBCThe market is already differentiating between the weak and the strongIts true that HY industrials face fundamental weakness on a sector basis. However, it might beunfair to apply the same tag to everyone under this umbrella., some names in this reportare displayi

41、ng qualities traditionally favoured by fixed income investors, such as fast growth (H&H), clear deleveraging efforts (West China Cement), valuable fixed assets (Golden Eagle), and industry leadership (Car Inc). Some of these qualities are underappreciated to various degrees influenced by the pre

42、vious defaults in the sector. From a bond supply perspective, shrinking issuance also provides technical support in terms of bond prices. In 1H19, gross issuance was USD6.4bn, accounting for only 16% of China HY property issuance in the same period. Most came from repeated issuers rather than debut

43、issues (USD900m). Its fair to say the market is already differentiating between the stronger credits which can still repeatedly issueand the weaker ones which are scarcely traded after initial pricing.Premium versus the China HY propertyFor reference, we now compare the performance of the China HY i

44、ndustrial and property sectors. For each, we have compiled a yield index comprising 15 benchmark issues across the BB and B space, with bonds maturing from 20 to 23 (see Chart 5). The current industrial premium over property is 69bp, versus an average of 11bp over the past 1.5 years. It has come dow

45、n from the high of 155bp at the start of 2019 when discussions about interest rate hikes, geopolitical tensions and a global growth slowdown were dominating the headlines. The first factor is no longer an issue following the coordinated easing by global central banks, while the latter two are still

46、casting a shadow over the market, maybe even more than six months ago.Against this macro backdrop, we think the industrial-property premium is likely to exist for the foreseeable future. At the same time, we note the recent round of tightening with regards toregulators curbing developers fund raisin

47、g plans in the onshore market (see China property HY: Déjà vu, 5 June) so this story is not black and white. Importantly, the absolute level of the premium is arbitrary in nature and highly dependent on the index substituents. We should still appreciate the difference in premiums of indivi

48、dual bonds, considering the varioussub-sectors within the entire HY industrial sector.7Fixed Income Asia CreditJuly 20195. Some premiums over the property counterparts12.0011.0010.009.008.007.006.005.004.00250200150100500-50-100Jan-18Mar-18May-18Jul-18Sep-18Nov-18Jan-19Mar-19May-19DiffChina HY indus

49、trialChina HY propertySource: Bloomberg, HSBCSorting the wheat from the chaffHere we again stress the importance of credit selection. In this report, we focus on names that:1) are listed and rated; 2) are transparent in terms of corporate communications and disclosures; 3) have healthy corporate gov

50、ernance; and 4) have manageable near-term liquidityrisk balanced by available financing channels.6. Bullish on HY oil sector; neutral on HY consumer sector; buy CARINC2210.0MEONHE 7.75 21CARINC 8.875 229.0HKJHCC 5.35 23GCLNE 7.1 21EHICAR 5.875 22CHGRAU 7.9 20HKJHCC 7.5 228.0CARINC 6 21HKJHCC 7.45 22

51、HKJHCC 4.7 21HKJHCC 7.875 21HILOHO 7.25 20 ANTOIL 9.75 20SNAGRP 7.5 21THSCPA 6.95 22CHIWIN 7.9 21FOUIHK 6.25 2021GOME 5 20VEYONG 7.57.0MAOIH 13.25 20HKJHCC 4.575 20TAIHUA 6.8 21TSINGH 5.375 23THSCPA 7.95 21ZOOMLI 6.125 22VNET 7.875 21THSCPA 7.9 21BJEAHM 6.5 226.0GERGHK 4.625 23BTSDF 7.25 21YINGDZ 6.

52、25 23TSINGH 4.75 21CWAHK 5.25 22VNET 7 20TSINGH 6 20 TSIGTF 5.375 21RSMACA 3.375 22CHMOLY 5C.4H8IO2I2L 4.625 22CARINC 6.125 20YGCZCH 6 225.0ZHJMIN 5.5 22SDGFIN 5.3 PERPYZCOAL 6 21YGCZCH 4.75 20THSCPA 4.3 19YZCOAL 5.75 PERPTSSTEE 4.25 204.00.000.501.001.502.002.503.003.50Duration (Yr)Source: Bloomber

53、g, HSBC8Yield (%)Yield (%)DifferenceFixed Income Asia CreditJuly 2019HY Consumer: Holding its ground?uSame store sales growth largely flat y-t-d, echoing the declineretail sales growthuIt might be too early to conclude that issuers are already out of the woods despite the various initiatives put in

54、placeWe have a neutral stance on HY consumer sector due to the still frail growth of China retail sales and expensive valuationsuRetail sales growth hit a multi-year low in April 2019While spending in the business sector has been generally weak, consumption has provided grounds for short-term optimi

55、sm based on the latest retail sales surprises from both China and the US. For example, Chinas retail sales growth accelerated to 8.6% y-o-y in May, beating estimates on the back of extended Labour Day holidays and the resilient housing market.However, from a broader perspective, 5M19 (accumulated) r

56、etail sales growth was only 0.1% higher than in 4M19, when growth was the lowest since 2003. As shown in Figure 7, the deceleration in growth in retail sales is a decade-long trend. In recent years, e-commerce is the biggest challenge to traditional retailers, currently accounting for 18.9% of total retail sales of physical goods. At its peak in 3Q17, e-commerce recorded 40% y-o-y growth. Although this has