APAC Credit Roundup: China economy, FWD, HK Property, Macau Gaming, RWL V, Indonesian Credit

Research evidence excerpt

APAC Credit Roundup: China economy, FWD, HK Property, Macau Gaming, RWL V, Indonesian Credit

Y/Y YTD sales growth), but

momentum may cool if tourist arrivals continue moderating. For staples, cross-border e-

commerce pressure appears to be stabilizing, reducing downside risk to spot rents and rental

reversions. As for office, Central rents could see another ~5% upside in 2H as vacancy rates

improve (now 8.8%) and demand from financial industry holds. Ex-Central demand remains the

laggard, particularly Kowloon East, with continued mid-high teens % vacancy rates and rent

pressure.

In the HK Property sector, we are OW on two names: (1) Hysan: Its earnings began to improve

in 2024 and remained steady through 2025, as higher mall rental income and a larger profit

contribution from Lee Garden Shanghai helped offset weakness in its office portfolio. The

company’s HK$8bn capital recycling program should accelerate deleveraging ahead of

incremental earnings from Lee Garden Eight, targeted for completion in 2H26. We remain

Overweight Hysan’s 7.2% perps (105.1 offer, 5.8% ytw, z+181); (2) New World

Development: Octus reported recently that NWDEVL is considering a rights issue, with the

Cheng family potentially underwriting about half and institutions the rest. It is our long-held

view that an equity injection is needed to repair the balance sheet ahead of the 2028 maturity wall.

If the raise proceeds, we expect NWDEVL to resume coupon payments on its perps to remove

the dividend stopper, and it may be incentivized to redeem or tender for the high-coupon prefs.

For NWDEVL, we remain OW the senior bonds (low-teens yield), but prefer the front end of the

step-up perps, notably the 10.131% perp (97.8) and 12.179% perp (93.9), given the sizable