MYR Bonds Market Credit Cheatsheet – Updates on Issuers that are on our watchlist (July 2025)
In this series of articles, we provide an overview of issuers currently on our watchlist, including the latest developments and our commentary on each issuer.
But before that, we have also provided a summary of several issuers that we are keen on:
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Company |
Latest Developments |
Related article |
Comment |
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Exsim Capital Resources Berhad |
- Issuing 4.5Y bond at IPG of 4.5% - 4.7%. - This seventh tranche issuance will be backed by 2 properties, namely Kingswoodz@Bukit Jalil and Noordinz Suites@George Town. - Exsim’s repayment ability is strong considering the take-up rate for both properties exceeded 88% as of the end-April 2025. - Contractors are required to provide performance bond of 5% contract value, incentivising for timely project completion. - Based on our calculation, there may be approximately RM69 millions of excess funds upon full redemption. |
- We view the associated risks to be manageable considering various incentives and buffers for this tranche. |
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JB Cocoa Sdn Bhd |
- Issuing 5Y bond with an IPG of 5.30% - 5.50%. - Delivered exceptional strong performance in FY25, with revenue increasing by 178.2% due to higher selling prices across all products. - However, net margin remains thin at 1.4%, as persistent high bean prices and foreign exchange losses continued to weigh on profitability. - Credit profile remains healthy as its marketable assets (receivables + inventories) are more than sufficient to fulfill its short-term obligations. - Total Debt/EBITDA improved significantly from 11 times in FY2023 to 2.6 times in FY2025, underpinned by strong earnings growth. - The volatile bean price may continue to weigh on JB Cocoa’s bottom line and balance sheet. |
Idea of the week: JB Cocoa tapping the market with indicative yield of 5.30%-5.50% |
- Given JB Cocoa’s strong and supportive customer base, along with its strategic cost pass-through model. - We continue to maintain a positive outlook on the company. We believe it is well-positioned to sustain profitability and a healthy credit profile going forward. |
Moving on to the next segment, here are the latest updates on issuers we are closely monitoring, which is exhibiting elevated credit risk or even under financial distress. We have marked the changes from the previous update in bold.
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Company |
Latest Developments |
Related article |
Comment |
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Tan Chong Motor Holdings Berhad |
- Tan Chong has partnered with China’s Wuling to launch its first EV model in Q4 2025. The company will assemble Wuling vehicles in Malaysia via semi-knocked-down (SKD), enabling pricing below RM100k which is not permitted for fully imported EVs.
- Tan Chong reported a net profit of RM1.5 mil in 1Q25. However, excluding the one-off fair value gain of RM48.6 million, the group remains in the red. - Market rumours suggest that the Wuling EV could be priced below RM50k.
- Tan Chong, through its subsidiary, has entered into an agreement to dispose of nine freehold land plots for RM148.8 million. The proceeds will be used to strengthen the group’s working capital position. |
- We continue to remain cautious on Tan Chong given its declining revenue and sustained losses, driven by lack of attractive models and intensifying competition in Malaysia automotive market. - It is unlikely for the Wuling EV to be priced below RM50k; however, if it is true, it can potentially boost Tan Chong’s sales. |
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Cypark Renewable Energy Sdn Bhd |
-The group reported profit after tax of RM13.4 million in FY25 compared to loss after tax of RM87.9 million in FY24, largely driven by a one-off reversal of provisions. - Even with completion of delayed projects and WTE ramping up, Cypark’s current core earnings still fall short of covering both its RM88.7 million financing costs and RM32.7 million in annual perpetual distribution.
- Cypark’s 51% indirectly-owned subsidiary has secured a 1.5MW biogas project in Johor, slated to be operational by Jul 2028. Revenue contribution is expected to be minimal. |
- We continue to recommend a hold / wait-and-see approach, allowing time for the principal to keep accumulating through secured projects, while monitoring whether Cypark’s operational performance and financial position improve meaningfully in the coming quarters. |
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Pestech International Berhad |
- In liquidity issues due to mismanagement in projects. - Pestec has been awarded RM270 million Klang Valley phase 2 rail project by its holding company on 28 May 2025. Despite this, we believe a turnaround for the company remains a long way off. - On August 1 2025, auditor issued an unqualified opinion with material uncertainty over the group’s ability to continue as a going concern. - As of 31 Mar 2025, Pestec’s group reported a net loss of RM339.5 million, with total current liabilities exceeding current assets by RM26.49 million. |
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- We believe it is likely that the company will involve perpetual holders in the restructuring plan in the near future. |
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Tropicana Holdings Berhad |
- In 1Q25, Tropicana recorded a 10.6% YoY decrease in revenue and a lower profit before tax of RM5.3 mil.
- The group attributed this to the completion of divestment of several properties, resulting in reduction of recurring income.
- The group’s deleveraging effort is on track, with gearing dropping from 72% in FY23 to 56% as of 31 March 2025. -The group did not redeem the outstanding perpetual with a call date on March 2025. |
- We see improvement in Tropicana’s balance sheet as the progress of asset disposals (W Hotel, Tropicana Gardens Mall) bodes well for achieving their deleveraging targets.
- We are still slightly concerned with their liquidity as maturing loans of RM 1.1 bil maturing within one year is still quite substantial. - Nevertheless, we are optimistic that further land sales, along with Tropicana Johor mega township project (Lido Waterfront, GDV of RM34 bil) will supplement their current liquidity needs while supporting future sales. |
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YNH Property Bhd |
- The final independent review released on 11 April 2025, found that YNH Property’s joint ventures and turnkey contracts involved a network of interconnected directors and shareholders. These overlapping roles raised concerns about potential related-party transactions (RPTs) and conflicts of interest.
- As at 31 March 2025, the group’s gearing ratio stood at 108%. - Recorded RM358 mil in revenue for 9 months ended 31 March 2025, while registered net loss of RM36.7 mil, citing challenging site progress and a loss on disposal of inventories. - Weighted average borrowing costs stood at 8.44%, which is on the high side. - YNH has decided not to redeem its perpetual securities – Tranche 1 and Tranche 2:
: Tranche 1: The next call date is in August 2025, marking the third consecutive non-call since August 2024. The group will pay a stepped-up coupon rate of 9.85%.
: Tranche 2: The call date is in July 2025, marking the first non-call. The group will pay a stepped-up coupon rate of 8.85%. |
YNH Property quick update – The clock is ticking for the troubled property developer |
-YNH is still actively disposing its assets to repay its outstanding loans and fulfil working capital requirements. Its liquidity position remains poor, with RM429 mil debt maturing in the coming year. - We are negative on this issuer from an operational perspective. |
|
Country garden |
- On 11 April 2025, Country Garden announced its proposed restructuring plan, primarily on handling the Group’s offshore debt at the group level, excluding the debts of subsidiaries (in mainland China, Malaysia, and Thailand). - The plan includes five options: (1) Cash Tender Offer, (2) Mandatory Convertible Bonds A, (3) Mandatory Convertible Bonds A and Medium-Term Debt Instruments, (4) Mandatory Convertible Bonds B and Long-Term Debt Instruments and (5) Ultra-Long-Term Debt Instruments. - Debt restructuring plan still in progress, the group is yet to reach an agreement with bondholders on how to pay the compensation to Bank Coordination Committee. |
Country Garden - Progress in Restructuring and Financial Results Announcement |
- Bondholders could consider joining the RSA and opt for a combination of Options 2, 3 and 5, which we believe are relatively attractive. - Alternatively, bondholders who do not want to participate in CA can also opt to sell their bonds (currently priced at $7-$8). |
|
Evergrande |
- Evergrande has officially entered a forced liquidation, and Alvarez & Marsal is the liquidator to handle the asset disposal. - The adjournment of the hearing, which was intended to seek directions on the appointment and composition of a committee of inspection for the winding up of the company, may affect the progress of the liquidation.
- Liquidation is still ongoing, with liquidator having filed proofs of debt on behalf of creditors. |
- The liquidation process is still ongoing, and we posit that it will take a couple of years to complete due to its scale. |
In the next section, we will delve into the insights of the yield curves for Malaysian Government Securities (MGS) and US Treasuries (UST) and Singapore Government Securities (SGS).
Our view on MGS:
1) Prefer medium-term (5-7 years) MGS
2) After OPR cut, yield curve is expected to remain stable.
3) Remain upward sloping
Table 1: Malaysia Sovereign Curve
Refer to MYR Bonds Outlook 2H2025 and Malaysia Outlook 2H25 for a more comprehensive macroeconomic outlook.
Our view on UST:
1) Prefer ultra-short term (e.g., six-month treasury)
2) Long-term bond yields face upward pressure as they have not fully priced in the risks of inflation or stagflation
Table 2: UST Yield curve
Refer to USD Bonds Outlook 2H2025 for a more comprehensive macroeconomic outlook
Our view on SGS:
1) Prefer short-term Singapore sovereign bonds.
2) Singapore rates may face further downward pressure, especially if the Fed cuts rates.
Table 3: SGS Yield curve
Refer to SGD Bonds Outlook 2H2025 for a more comprehensive macroeconomic outlook
Some of the Credit Announcement by RAM & MARC (as of 31 July 2025)
RAM
1) Affirms AFFIN Group’s AA3 financial institution ratings
2) Assigns final AA3/Stable rating to Exsim Capital’s Tranche 7 IMTN
3) Affirms Johor Corporation at AAA/Stable/P1
4) RAM Ratings upgrades Alliance Bank and Alliance Islamic to AA3
https://www.ram.com.my/news-events/?tab=list-ratingannouncement
MARC
1) Maintains Guan Chong’s outlook at negative
2) MARC Ratings revises Tropicana’s ratings outlook to positive
https://www.marc.com.my/insights/rating-announcements/
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds position in COGARD 6.500% 08Apr2024 Corp (USD) Trading without Accrued Interest and TCMMK 5.580% 16Mar2027 Corp (MYR), and the analyst who produced this report hold a NIL position in the abovementioned securities.
