Skip to main content

Mitsubishi Motors Credit Rating

*The outlook revision is based on our view that it has become increasingly likely that the company's EBITDA margin will recover to over 5% in the next one to two years, thanks to efforts to improve profitability. It also reflects our expectation that the automaker will generate positive free operating cash flow (FOCF) steadily and maintain its financial soundness.

*Mitsubishi Motors' EBITDA margin is likely to recover to 5%-6% in fiscal 2021 (ending March 31, 2022) and continue improving moderately; it turned negative in fiscal 2020 due to weakened profitability and the costs of restructuring. The company achieved a 20% reduction in fixed expenses in fiscal 2020 from fiscal 2019 by reducing indirect labor costs, freezing development of new models aimed at European markets, and lowering expenses such as outsourcing costs. It will introduce competitive new models and curb incentives, which we expect will improve earnings per vehicle. The recovery in profitability will also be supported by an uptick in new vehicle sales in Southeast Asia, its key market, from this fiscal year onward.

*We see only a limited possibility that the company's profitability will weaken materially, despite difficult business conditions. The impact of an ongoing semiconductor shortage may linger into the second half of 2022, but the company aims to soften the blow of scaled-back production by securing chip inventory through negotiations with suppliers. Soaring costs of raw materials, including precious metals such as rhodium and palladium, will have a relatively small impact on Mitsubishi Motors' profitability compared with peers that have greater exposure to European markets with tighter environmental regulations. Mitsubishi Motors uses comparatively smaller volumes of such materials. Furthermore, the effect of the weaker yen should underpin the company's earnings.

*We expect Mitsubishi Motors to generate FOCF of about ¥5 billion-¥25 billion in the automobile business and maintain a sound financial base in the next one to two years. Free cash flow in its automotive business was negative by about ¥50 billion in the first half of fiscal 2021, owing to temporary factors such as restructuring costs. But it is likely to turn positive to about ¥5 billion-¥10 billion per year, thanks to an improvement in operating cash flow in the second half of fiscal 2021. In the next one to two years, we expect operating cash flow in the automobile segment to recover to ¥80 billion-¥110 billion a year amid a recovery in profitability. We anticipate the company will curb annual capital expenditures to about ¥75 billion-¥85 billion and refrain from any significant business expansion under its conservative financial management. Accordingly, we expect net cash of the automobile business to recover to above ¥150 billion in the next one to two years from about ¥140 billion as of Sept. 30, 2021. The company is likely to maintain positive free cash flow on an annual basis after shareholder returns.


We assume the following under our base-case scenario.


  • Growth in global new car sales of 2%-4% in 2021 and 4%-6% in 2022
  • Growth in new car sales in the U.S. of 9%-10% in 2021 and 5%-7% in 2022
  • Growth in new car sales in Southeast Asia of 1%-3% in 2021 and 4%-6% in 2022
  • Growth of the company's new car sales of 20%-25% in fiscal 2021 and 2%-5% in fiscal 2022
  • Annual capital expenditures for its automobile business of ¥75 billion-¥85 billion in the next one to two years
  • Annual FOCF from its automobile business of ¥5 billion-¥25 billion in the next one to two years

TAKE A LOOK AT*

Retrophin, Inc. Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Sun Jan 16 2022 11:33:57 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model We do not include potential future debt issuances as a source of liquidity because of the uncertainty of a company's ability to access debt markets in times of financial stress, even for investment-grade issuers. For instance, in the case of a proposed financing, with the intended use of proceeds to repay existing debt, we will assess a company's liquidity excluding the proposed financing until it's obtained or fully underwritten. Rating Model for Retrophin, Inc.: We estimate the credit risk parameters by Money Flow Index (MFI) and ElasticNet Regression Credit Ratings for Retrophin, Inc. as of 16 Jan 2022 Credit Rating Short-Term Long-Term Senior AI Rating Class* Baa2 B3 Semantic Signals 86 48 Financial Signals 66 46 Risk Signals 73 39 Substantial Risks

FIRST SECURITY BANK Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Sun Jan 16 2022 11:59:02 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model Larger, investment-grade issuers that have access to both public and private debt markets have greater flexibility than companies that depend solely on private bank loans. In addition, we consider whether a company can borrow on an unsecured basis, has access to the commercial paper markets, and issues debt in multiple geographies. It is more costly to raise debt in the public bond markets and often requires a company to establish a track record among investors. These costs and information asymmetry issues sometimes make it impractical for smaller, speculative-grade issuers to raise small amounts of debt in public markets. Rating Model for FIRST SECURITY BANK: We estimate the credit risk parameters by Rating and Spearman Correlation Credit Ratings for FIRST SECURITY BANK as of 16 Jan 202

Adtalem Global Education Inc Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Mon Jan 17 2022 05:06:02 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model Our liquidity uses include dividends and share repurchases that we expect under a stress scenario. Unlike other potential uses of liquidity, such as debt maturities or maintenance capital spending, we view dividends and share repurchases as more discretionary, although more so for the latter. For this reason, when evaluating a company's liquidity position, we may use a lower estimate of dividends and shareholder repurchases than in our base-case forecast based on our views of management and the company's track record in terms of shareholder returns and maintaining a certain minimum level of liquidity. Rating Model for Adtalem Global Education Inc: We estimate the credit risk parameters by Ichimoku Cloud (IKH) and Sign Test Credit Ratings for Adtalem Global Education Inc as of 17

Guangzhou Shangpin Home Collection CoLtd Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Sat Jan 15 2022 16:26:18 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model Our liquidity uses include dividends and share repurchases that we expect under a stress scenario. Unlike other potential uses of liquidity, such as debt maturities or maintenance capital spending, we view dividends and share repurchases as more discretionary, although more so for the latter. For this reason, when evaluating a company's liquidity position, we may use a lower estimate of dividends and shareholder repurchases than in our base-case forecast based on our views of management and the company's track record in terms of shareholder returns and maintaining a certain minimum level of liquidity. Rating Model for Guangzhou Shangpin Home Collection CoLtd: We estimate the credit risk parameters by Tuned Collector Oscillator and Pearson Correlation Credit Ratings for Guangzho

Cactus Wellhead, LLC Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Sun Jan 16 2022 11:17:02 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model Other factors we consider include a company's frequency of debt issuance and market access, especially during times of company-specific stress or credit market turbulence. Rating Model for Cactus Wellhead, LLC: We estimate the credit risk parameters by KDJ and Multiple Regression Credit Ratings for Cactus Wellhead, LLC as of 16 Jan 2022 Credit Rating Short-Term Long-Term Senior AI Rating Class* B1 B1 Semantic Signals 39 59 Financial Signals 53 88 Risk Signals 70 67 Substantial Risks 53 51 Speculative Signals 89 35 *Machine Learning utilizes multiple learning algorithms to obtain better predictive powers. In our research, we utilize machine learning to combine the results from the Neural Network and Support Vector Machines.

River Valley Bancorp. Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Tue Jan 18 2022 04:42:02 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model When assessing strong or exceptional liquidity, we include all forecasted capital expenditures over the next 24 months, including discretionary growth capital spending. Rating Model for River Valley Bancorp.: We estimate the credit risk parameters by Volume + Moving Average and Spearman Correlation Credit Ratings for River Valley Bancorp. as of 18 Jan 2022 Credit Rating Short-Term Long-Term Senior AI Rating Class* Ba3 B2 Semantic Signals 35 56 Financial Signals 47 50 Risk Signals 82 62 Substantial Risks 70 33 Speculative Signals 90 63 *Machine Learning utilizes multiple learning algorithms to obtain better predictive powers. In our research, we utilize machine learning to combine the results from the Neural Network and Support Vector Machines.

LONE STAR STATE BANK OF WEST TEXAS Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Sat Jan 15 2022 16:17:33 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model Our liquidity uses include dividends and share repurchases that we expect under a stress scenario. Unlike other potential uses of liquidity, such as debt maturities or maintenance capital spending, we view dividends and share repurchases as more discretionary, although more so for the latter. For this reason, when evaluating a company's liquidity position, we may use a lower estimate of dividends and shareholder repurchases than in our base-case forecast based on our views of management and the company's track record in terms of shareholder returns and maintaining a certain minimum level of liquidity. Rating Model for LONE STAR STATE BANK OF WEST TEXAS: We estimate the credit risk parameters by Bollinger Bands Width and Stepwise Regression Credit Ratings for LONE STAR STATE BAN

SHIBAURA ELECTRONICS CO., LTD. Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Tue Jan 18 2022 03:42:03 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model Likewise, we do not consider factoring programs under sources of liquidity. Unlike asset-based lending (ABL) facilities, factoring is more of a sales transaction and not a loan. In addition, these transactions tend to be very short term. For this reason, we would not consider them a committed source of future liquidity over a 12-month period. Rating Model for SHIBAURA ELECTRONICS CO., LTD.: We estimate the credit risk parameters by OCL and Lasso Regression Credit Ratings for SHIBAURA ELECTRONICS CO., LTD. as of 18 Jan 2022 Credit Rating Short-Term Long-Term Senior AI Rating Class* B2 Ba2 Semantic Signals 81 39 Financial Signals 35 70 Risk Signals 76 88 Substantial Risks 39 74 Speculative Signals 53 63 *Machine Learning utilizes multiple learning algorithms to obt

ConforMIS Inc Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Tue Jan 18 2022 06:42:02 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model For these reasons, although the criteria establish no rating threshold for liquidity, we typically expect: Instances of 'B+' and below rated issuers achieving liquidity descriptors higher than adequate to be rare and Few companies to qualify for the exceptional category, and these entities to typically have issuer credit ratings of 'BBB-' or above. Rating Model for ConforMIS Inc: We estimate the credit risk parameters by KDJ and Stepwise Regression Credit Ratings for ConforMIS Inc as of 18 Jan 2022 Credit Rating Short-Term Long-Term Senior AI Rating Class* Ba3 B3 Semantic Signals 67 42 Financial Signals 65 60 Risk Signals 81 30 Substantial Risks 84 33 Speculative Signals 33 52 *Machine Learning utilizes multiple learning algorithms to obtain bet

Chengdu B-ray Media Co., Ltd Credit Rating & Financial Statements Analysis

BOSTON (AC Invest Credit Rating Terminal) Tue Jan 18 2022 02:42:02 GMT+0000 (Coordinated Universal Time) AI Credit Ratings today took the rating actions below: Credit Rating Rationales & Model We do not assume future debt refinancing or the rolling over of CP, regardless of the company's perceived credit strength or issuer credit rating. For instance, even for investment-grade issuers, we do not assume future debt maturities are refinanced with potential uncommitted capital raises. We could, however, consider a shorter time horizon. Rating Model for Chengdu B-ray Media Co., Ltd: We estimate the credit risk parameters by Electron Coupled Oscillators and Polynomial Regression Credit Ratings for Chengdu B-ray Media Co., Ltd as of 18 Jan 2022 Credit Rating Short-Term Long-Term Senior AI Rating Class* B2 B1 Semantic Signals 54 42 Financial Signals 75 39 Risk Signals 78 86 Substantial Risks 35 85 Speculative Signals 33 36 *Machine Learning utilizes multi

 *AC INVEST | Legal Disclaimer | NYSE | NASDAQ | LSE | NSE |