Energy and utility companies, particularly Chinese state-owned enterprises (SOEs), dominated the list of ten Asia-Pacific corporations expected to see the biggest increase in net debt from the end of 2012 to 2014, Fitch Ratings says.
In contrast, the technology, media and telecommunications (TMT) and auto sectors feature prominently among the top ten largest net debt shedders in the Asia-Pacific.
In a report — Top 10 Corporate Debt, Cash Flow & Leverage Changes — published on Monday, Fitch forecast that five of the top 10 debt raisers over the period of 2012-2014 would be Chinese SOE heavyweights: China Mobile Limited, China National Petroleum Corporation (CNPC), State Grid Corporation of China (SGCC), CNOOC Limited and China General Nuclear Power Corporation (CGNPC).
“These companies are expanding capacity and hence have increasing capex requirements,” Fitch said in an official release.
The report also examines the top 10 Cash Flow Boosters and Dippers, and the top 10 Leverage "Risers" and "Fallers.
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 pay down. Natural resources corporations, including BHP Billiton Ltd, POSCO and Aluminum Corporation of China Limited (Chalco) dominated the Top 10 Cash Flow Dippers list and Chinese property and homebuilding corporations are prominent on both the Projected Top 10 Leverage Risers and Fallers lists.