Core Viewpoint - The report by TRIS Rating indicates a significant increase in corporate defaults and debt delays in Thailand, projecting a rate of 5.8% in 2025, the highest since 2000, reflecting rising credit pressure on companies [1] Group 1: Default and Delay Rates - In 2025, 12 bond issuers are expected to default or delay payments, an increase from 8 in 2024 [1] - The annual default rate is projected to rise from 0.9% to 2.9%, while the combined rate of defaults and delays will increase from 2.9% to 5.8% [1] Group 2: Industry Impact - The number of cases in regulated utilities, real estate development, and construction industries has surpassed levels seen during the 1997 Asian financial crisis [1] - Current risks are accumulating gradually in capital-intensive industries that primarily rely on domestic demand, contrasting with the systemic crisis triggered by currency shocks and foreign debt in 1997 [1] Group 3: Credit Ratings and Market Outlook - Some companies projected to default in 2025 were previously rated as investment grade, indicating that credit pressure is spreading to previously stable firms [1] - The number of downgrades in 2025 is expected to significantly exceed upgrades, with negative outlooks dominating the ratings adjustments [1]

Group 1 - The core viewpoint of the report is that Morningstar has raised the fair value of China Longyuan Power Group (01038) by 3% to HKD 65, benefiting from a slight increase in profit expectations [1] - The stock is currently undervalued, with a projected price-to-earnings ratio of 15 times and a dividend yield of 4.8%, indicating a stable mid-term outlook [1] - Morningstar forecasts a compound annual growth rate (CAGR) of 6.3% in earnings per share over the next five years, driven by an increase in the regulated return rate reflecting significant rises in capital costs since the last adjustment [1] Group 2 - The allowed return rate is typically adjusted every five years and is expected to be higher than government bond yields, which have significantly increased since the pandemic [1] - Morningstar predicts a compound annual growth rate of 3% in dividends per share over the next five years, with expectations that management will control dividend growth to reduce the payout ratio to below 70% [1] - Due to the improving outlook for regulated utilities and higher return rates, the firm has raised its mid-term earnings per share forecast by an average of 2.4% [1]