Systematic Credit and Equity G-255 Earning Digest November 19, 2025
G-255 Trading Indicator Recap – November 19, 2025
This morning, we highlighted the continued aggressive re-levering of the world's largest corporate balance sheets: top banks and auto finance companies are borrowing hundreds of billions from bondholders to fund massive shareholder returns (buybacks + dividends). Despite ~$1 trillion of additional net debt added YTD across the G-255 universe, the U.S. rating agencies remain silent – "all is well."
Global Autos & Auto Finance – the worst of all worlds
Declining unit volumes/U.S. tariffs still in place
Lower profitability from reduced run-rates and higher input costs
Rising net debt across all 10 of the largest global auto issuers
Spreads have widened, but nowhere near enough to reflect the fundamental deterioration. As a direct result, 5 of the G-255 equity indicators flipped to short this month – the highest number since 2008–2009.
Stand-outs on the positive side
Tencent (TCEHY / 700 HK) –
Delivered the strongest 3Q operating metrics in the Single-A TMT peer group. The model now sees both Tencent equity and bonds as attractive longs at current (lower equity / wider credit) levels.
Home Depot (HD) –
One of the very few G-255 issuers that has refused to re-lever to fund shareholder returns. The model remains long HD equity at current levels and long HD bonds on any further widening.
Tencent holding Ltd
3Q Operating Metrics YoY QoQ
Operating Profit (Non-IFRS) +18.0%
Operating Margin +37.6% +1.5%
Gross Margin 56.4% +2.4%
Operating Cash Flow ¥85.3B +9.7%
Free Cash Flow ¥78.1B +11.2%
AI-Driven Advertising Revenue +21.0%
Domestic Games Revenue +15.0%
International Games Revenue +43.0%
Gaming Revenue +21.0% +5.2%
Fintech & Business +12.0% +3.8%
Online Advertising +21.0% +4.1%
Cloud & Infrastructure +9.0% +2.4%
Tencent management did not provide formal quantitative guidance for Q4 2025 but emphasized continued investment in AI, margin expansion, and shareholder returns. They expressed confidence in long-term growth across gaming, advertising, and fintech.
Celanese Corp
3Q Operating Metrics. QoQ YoY
Operating Margin 14% -5% -2%
Engineered Materials Volume –4% –6%
Acetyl Chain Volume –4% –11%
Operating Cash Flow $430mm +4% +8%
Free Cash Flow $375M +2.7% +5.3%
Management guidance
• Volume Expectations:
Expecting flat to slightly lower volumes in Q4 across both segments
End-market demand remains subdued, especially in electronics and consumer durables
• Margin Expectations:
Operating margins likely to remain compressed, with limited pricing power
Focus remains on cost discipline and inventory optimization
• Cash Flow & Capital Allocation:
Continued emphasis on free cash flow generation
No major changes to capex or dividend plans
Home Depot
3Q Operating Metrics QoQ YoY
Comparable Sales +0.2% +0.5% +1.5%
U.S. Comp Sales +0.1% +0.5% +1.5%
Average Ticket Size +1.8%
Customer Transactions - 1.6% –1.0%
Operating Margin 14.1% Flat -0.3%
Operating Cash Flow $5.3B +2.5% +3.1%
Free Cash Flow $4.7B +3.0% +4.2%
Home Depot lowered its full-year fiscal 2025 guidance following Q3 results, citing continued softness in home improvement demand and macroeconomic uncertainty. Full-Year Revenue now expected to decline ~2% YoY, compared to prior guidance of flat to slightly down
Comparable Sales: expected to decline ~3% for FY2025, revised from previous guidance of ~2% decline
BMW
3Q Operating Metrics. QoQ Change YoY Change
Group EBIT Margin 6.7% â from 7.3% â from 6.9%
Operating Cash Flow €3.1B +2.3% +5.7%
Free Cash Flow (Auto) €339M –12.4% –18.6%
Region Revenue (€B) YoY QoQ
Europe €13.2 –0.8% –2.4%
North America €9.6 +6.5% +2.1%
China €7. 4 –3.2% –1.7%
Asia (ex-China) €3.9 +5.8% +1.4%
Other Regions €1.7 +2.3% +0.6%
Segment Revenue (€B)
Automotive €29.2 4.9%
Motorcycles €731M 3.9%
BMW management reaffirmed their full-year 2025 guidance following Q3 results, maintaining targets for profitability and vehicle deliveries despite macroeconomic and China-related headwinds.
Hyundai Motor Co
Note: Hyundai will not release its full 3Q report until December.
3Q Operating Metrics. YoY QoQ
Operating Profit KRW 2.54T –4.6%
Operating Margin 5.4% â from 5.9%
Electrified Vehicle Sales (Global) +37% +6.4%
Operating Cash Flow KRW 3.02T +2.1%
Free Cash Flow 2.65T +1.7%
Region Units Sold (000s) YoY QoQ
South Korea 167 +1.5% –0.8%
North America 312 +6.2% +2.3%
Europe 278 +5.9% +1.7%
China 105 –7.4% –2.9%
Rest of World 183 +4.1% +1.5%
Total 1,045 +4.8% +1.6%
Hyundai Motor Company reaffirmed its full-year 2025 guidance of 5–6% global sales growth and a 6–7% operating profit margin following its Q3 2025 result
Nissan Motor Co
3Q Operating Metrics. YoY QoQ
Operating Margin 5.2% â from 5.4%
Automotive Segment Profit -65% –43%
EV Sales (Global) +18.5% +4.2%
Operating Cas Flow ¥1.01T +1.4%
Free Cash Flow ¥870B +2.0%
Region Units Sold (000s) YoY QoQ
Japan 138 –6.5% –2.1%
North America 223 +5.3% +1.8%
China 190 –8.9% –3.4%
Asia (ex-China) 260 +7.2% +2.6%
Other Regions 110 +3.9% +1.5%
Total 921 +2.3% +1.2%
Nissan FY2025 Guidance Update (Post-Q3)
• Revenue Outlook: Lowered from ¥11.2 trillion to ¥10.6 trillion due to weak performance in China and the U.S.
• Operating Profit Forecast: Reduced from ¥550 billion to ¥420 billion, reflecting margin pressure and restructuring costs
Honda Motor co
3Q Operating Metrics QoQ YoY
Automotive Segment Profit –¥73B - from ¥41B - from ¥89B
Motorcycle Segment Profit ¥312B +5.7% + 12.2%
Operating Cash Flow ¥1.02T - 1.5% + 3.1%
Free Cash Flow ¥870B +2.2% +4.5%
Electrification Charges ¥237B
Region Units Sold (000s)
Japan 138 –2.1% –6.5%
North America 365 +0.9% +1.8%
China 290 –3.7% –9.4%
Asia (ex-China) 420 +4.3% +12.6%
Other Regions 110 +2.0% +5.2%
Total 1,323 +1.1% +2.3%
Honda did not change f2026 guidance post 3Q results
Daimler Truck Holding AG
3Q Operating Metrics. YoY QoQ
Industrial Business Revenue €10.6B –3.9%
Operating Margin +6.2% â from 7.1%
Operating Cash Flow €1.02B +1.1%
Free Cash Flow €24M –82.0%
Region | Units Sold (000s)
North America (DTNA)30.2 –39.0% –12.5%
Europe (MB Trucks) 45.6 +6.8% +2.1%
Asia (Trucks Asia) 32.4 –4.5% –1.7%
Daimler Buses 6.1 +3.2% +1.4%
Total 114.3 –9.0% –3.8%
FY2025 Guidance (Post-Q3)
•Unit Sales Forecast: 410,000 to 440,000 vehicles globally — unchanged from prior guidance.
•Revenue Target: €44 billion to €47 billion — reaffirmed, with expectations to land near the lower end.
Disclaimer - This report is not intended as, and does not constitute an offer, or a solicitation to buy or sell any securities or financial instruments. All data, levels, opinions, and representations herein are provided for informational purposes only and should not be relied upon for making investment decisions. Past performance is not indicative of future results. The authors of this report assume no liability for losses or damages arising from the use of this information. Investors should consult with a qualified financial advisor before making any investment decisions. The information in this report is based on sources believed to be reliable, but no guarantee is made as to its accuracy, completeness, or timeliness.