G-255 Earnings Summary with Trading Indicators for August 13, 2025
Commonwealth Bank Australia (AA- / Aa2 attractive short) Earnings summary:
reported 4.72% 2H revenue growth and -7% 2H operating earnings decline YoY.
• 2Q Net interest income grew 5% YoY.
• 2Q Trading income rose 1.9%.
• 2H Non – Performing loans improved YoY.
• CBA did not provide 2026 guidance.
Financial Position:
• CBA Tier 1 capital at 6/30/25 was 12.3% vs. 12.2% at the end of H1 and 12.3% a year ago.
• Total loans rose roughly 6.9% YoY to AUD 475 1.013 tril.
• Deposits rose 3.9% YoY and are AUD 35.5 bil higher HoY @ AUD 336.6 bil.
• AUD On balance sheet liquidity rose. However total debt rose AUD 22.5 bil HoH and AUD 37.3 bil YoY. The company spent AUD 8 bil on share repurchase and dividends in F2025.
Trading Model Indicator: There are 26 liquid USD Commonwealth Bank Australia bonds (fixed and floating - bank notes, senior holdco, subordinated bonds, and perpetuals) totaling $28.7 billion. There are 2 overvalued systematic credit trading trading indicators and 8 attractive short indicators with the CBAAU 4.316 01/10/48 subordinated bond having the most potential spread widening according to the trading model.
Equity Indicator: CBA AU equity is an attractive long trade at AUD 163 per share.
Cisco Systems (CSCO, A1/AA-, attractive long) Earnings Summary:
Cisco reported 4Q revenue that rose 7.6% and operating income that grew 46% YoY.
• 4Q orders rose 7% worldwide YoY.
• 4Q AI infrastructure orders doubled YoY to $2 bil.
• 1Q Intel Foundry revenue rose 7%
• Company guidance for F2025 is for 7 – 10% operating earnings growth.
Financial Position:
• 2025 operating cashflow grew 36% YoY to $14.2 bil.
• Free cashflow after returns to shareholders averaged $1 bil per quarter in 2025.
• After Capex, dividend and share repurchase of $2.9bil in the CSCO 4Q, net debt fell by $1.65 bil in the quarter to $12 bil.
Trading Model Indicator: CSCO has 13 secondary USD bonds with market cap of $22.2 billion. 1 of those bonds have systematic trading model indicators of undervalued and 1 bond, the CSCO 4.9 02/26/26 has an attractive long indicator.
Equity Indicator: CSCO equity is an attractive long trade at $61.82 per share.
Tencent (TENCNT, A1/A+, attractive long) Earnings Summary
TNCNT 2Q revenue rose 15% YoY. Operating profit was 18% YoY. Operating margin increased to 38% from 36%
• Revenues from FinTech and Business Services rose by 10%
• Social Networks revenues rose by 6% year-on-year
• International Games revenues were 35% higher YoY
• Domestic Games revenues were rose 17% year-on-year
• 2Q Revenues from VAS increased by 16% YoY
Financial Position:
• 1H 2025 operating cashflow grew 22% YoY to RMB 151.2 bil.
• Free cash flow rose to RMB 48.8 billion from net cash use of -RMB 18.8 bil in the first half of 2024.
• After Capex, dividend and share repurchase 1H Tencent net debt fell by -RMB 10bil to RMB 7 bil.
Trading Model Indicator: Tencent has 10 bonds totaling $15.7 bil in USD market cap. None are consider either undervalued or attractive long indicators from our credit trading model.
Equity Indicator: 700HK equity is an attractive long trade at HK$469 per share.
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