Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-20844'>Medco Energi</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Medco Energi

Equity Analyst

Steve Zhou, CFA

Equity Bottom-Up

<ul>
<li>According to public news, China is considering asking local governments to purchase significant amount of unsold homes in the country. </li>
<li>
<a href="https://www.smartkarma.com/entities/nippon-paint-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7387:1" rel="noopener">Nippon Paint Holdings (4612 JP)</a> is a good proxy for exposure to China property with downside protection.</li>
<li>China made up 40% of Nippon Paint's operating profit (1Q24 numbers).  Nippon Paint is the absolute leader in decorative paint in China, with 25% market share in 2023 (TUC).</li>
</ul>


According to public news, China is considering asking local governments to purchase significant amount of unsold homes in the country. 

Nippon Paint Holdings (4612 JP) is a good proxy for exposure to China property with downside protection.
China made up 40% of Nippon Paint's operating profit (1Q24 numbers).  Nippon Paint is the absolute leader in decorative paint in China, with 25% market share in 2023 (TUC).


Nippon Paint (4612 JP):  Strong 1Q24; Overlooked Proxy For China Property

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In the 29th April HK$34/share <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0429/2024042905713.pdf" target="_blank" rel="noopener">VGO announcement</a>, a share scrip alternative may be afforded if 10% of <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a>'s disinterested shareholders expressed interest by the 15th May</li>
<li>That pre-condition has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0516/2024051601273.pdf" target="_blank" rel="noopener">satisfied</a>. However, we are none the wiser whether you receive shares of the levered-up Bidco, at some undetermined scrip ratio; or keep shares of L’Occitane as-is.</li>
<li>Some shareholders, like Butler Hall, considered terms low-balled. They now have the option to rollover. But there are still other large activists on the register, whose intentions are not known. </li>
</ul>


In the 29th April HK$34/share VGO announcement, a share scrip alternative may be afforded if 10% of L'Occitane (973 HK)'s disinterested shareholders expressed interest by the 15th May
That pre-condition has been satisfied. However, we are none the wiser whether you receive shares of the levered-up Bidco, at some undetermined scrip ratio; or keep shares of L’Occitane as-is.
Some shareholders, like Butler Hall, considered terms low-balled. They now have the option to rollover. But there are still other large activists on the register, whose intentions are not known. 


L'Occitane (973 HK): On Activism And The Scrip Alternative

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>Talks circulate that E-Mart may sell its 5% stake in Samsung Life Insurance, valued around ₩1T, due to fundraising needs linked to SSG.com investors' put options.</li>
<li>Initially, Starbucks Korea was a potential sale, but U.S. HQ approval makes it unfeasible. Shinsegae L&amp;B and Food weren't enough to raise funds, leading E-Mart to focus on Samsung Life.</li>
<li>E-Mart's block deal timing is uncertain due to potential legal disputes over unmet put option conditions, yet recent local market discussions suggest E-Mart may avoid legal battles.</li>
</ul>


Talks circulate that E-Mart may sell its 5% stake in Samsung Life Insurance, valued around ₩1T, due to fundraising needs linked to SSG.com investors' put options.
Initially, Starbucks Korea was a potential sale, but U.S. HQ approval makes it unfeasible. Shinsegae L&amp;B and Food weren't enough to raise funds, leading E-Mart to focus on Samsung Life.
E-Mart's block deal timing is uncertain due to potential legal disputes over unmet put option conditions, yet recent local market discussions suggest E-Mart may avoid legal battles.


Potential Samsung Life Insurance Block Deals, Likely to Be Triggered by E Mart

New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

<ul><li>We view Scales' (SCL) acquisition of (1) 240 hectares of primarily premium variety planted orchards (114 hectares owned and 126 hectares leased) from Bostock Group, and (2) the remaining 50% of juice concentrate manufacturer, Profruit (formerly owned by Bostock Group), favourably.</li><li>We estimate an implied EV/EBITDA (pre-IFRS 16) multiple of ~4x for the orchards component versus SCL's FY24 group multiple of ~6x.</li><li>SCL intends to sell two of its orchards and, based on recent transactional evidence, we foresee a reasonable likelihood that SCL on a net basis won't deploy any additional capital into Mr Apple. </li></ul>

We view Scales' (SCL) acquisition of (1) 240 hectares of primarily premium variety planted orchards (114 hectares owned and 126 hectares leased) from Bostock Group, and (2) the remaining 50% of juice concentrate manufacturer, Profruit (formerly owned by Bostock Group), favourably.We estimate an implied EV/EBITDA (pre-IFRS 16) multiple of ~4x for the orchards component versus SCL's FY24 group multiple of ~6x.SCL intends to sell two of its orchards and, based on recent transactional evidence, we foresee a reasonable likelihood that SCL on a net basis won't deploy any additional capital into Mr Apple. 

Morning Views Asia: Medco Energi

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Nippon Paint (4612 JP): Strong 1Q24; Overlooked Proxy For China Property

China made up 40% of Nippon Paint's operating profit (1Q24 numbers). Nippon Paint is the absolute leader in decorative paint in China, with 25%...

Steve Zhou, CFA

L'Occitane (973 HK): On Activism And The Scrip Alternative

The Offeror prevaricating over the scrip alternative, despite sizeable interest; plus an activist potentially able to blockthe deal; expect shares...

David Blennerhassett

Potential Samsung Life Insurance Block Deals, Likely to Be Triggered by E Mart

This post delves into the possibility of upcoming block deals involving Samsung Life Insurance, potentially instigated by E-Mart.

Sanghyun Park

Scales - How About Them Apples

We estimate an implied EV/EBITDA (pre-IFRS 16) multiple of ~4x for the orchards component versus SCL's FY24 group multiple of ~6x.

Forsyth Barr