October 7, 2013 / 1:05 AM / 4 years ago

Fitch: Chinese SOEs Dominate APAC Debt Raisers; Samsung & Toyota in Blue Zone

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Top 10 Corporate Debt, Cash Flow & Leverage Changes here SYDNEY/SINGAPORE, October 06 (Fitch) Energy and utility companies, particularly Chinese state-owned enterprises (SOEs), dominate the list of ten Asia-Pacific corporates that will see the biggest increase in net debt from the end of 2012 to 2014, Fitch Ratings says. In contrast companies in the technology, media and telecommunications (TMT) and auto sectors feature prominently among the top 10 largest net debt shedders in the Asia-Pacific. In a report - "Top 10 Corporate Debt, Cash Flow & Leverage Changes" - published today, we forecast that five of the top 10 debt raisers (those increasing net debt under our forecasts) over 2012-2014 will be Chinese SOE heavyweights: China Mobile Limited, China National Petroleum Corporation (CNPC), State Grid Corporation of China (SGCC), CNOOC Limted, and China General Nuclear Power Corporation (CGNPC). These companies are expanding capacity and hence have increasing capex requirements. In the "Projected" lists covering 2012-2014, the top 10 debt raisers still outstrip the top 10 debt shedders (USD137bn to be raised versus USD73bn to be shed), although not to the same extent as on the "Past" lists covering 2009-2012 (where USD207bn was raised and only USD49bn shed). The report also examines the top 10 Cash Flow (EBITDAR) Boosters and Dippers, and the top 10 Leverage "Risers" and "Fallers". The position of four Chinese SOEs (China Mobile, CNPC, CNNOC and SGCC) on the Top 10 Cash Flow Boosters list appears to justify their position on the Top 10 Debt Raisers list. No issuers are in the "red pain zone" of rapid cash flow decline and increasing debt. However, Samsung Electronics and Toyota Motor Corp. are in the "blue joy zone" of strong cash flow increase and debt paydown. Natural resources corporates, including BHP Billiton Ltd., POSCO and Aluminum Corporation of China Limited (Chalco) dominate the Top 10 Cash Flow Dippers list, and Chinese property and homebuilding corporates are prominent on both our Projected Top 10 Leverage Risers and Fallers lists. Fitch has taken negative rating actions since 2009 on most of the companies on the Top 10 Cash Flow Dippers list for the "All-In" period covering 2009-2014, where five have been downgraded and one (Yanzhou Coal) is on Negative Outlook. Four of the downgrades are tech sector names - Panasonic, KT Corp, ZTE and Acer. The analysis is available at www.fitchratings.com. Contact: Matt Jamieson Head of APAC Research Corporate Ratings Group +61 2 8256 0366 Andrew Steel Managing Director, APAC Corporate Ratings +65 6796 7231 Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: iselle.gonzalez@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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