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

<p><br/> In this month's “In-Focus”, we look at the Chinese offshore bond defaults in 2020. A record 12 issuers defaulted on USD Notes during the year, with a substantial share of them being SOEs. We review broader trends as well as select cases, and discuss our takeaways on how best to asses the credit profiles of Chinese issuers.<br/><br/> The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market. <br/></p>

  In this month's “In-Focus”, we look at the Chinese offshore bond defaults in 2020. A record 12 issuers defaulted on USD Notes during the year, with a substantial share of them being SOEs. We review broader trends as well as select cases, and discuss our takeaways on how best to asses the credit profiles of Chinese issuers.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - USD Bond Defaults In China - Lucror Analytics

<p><br/> The Asia HY Trade Book for the month of January includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.<br/></p>

  The Asia HY Trade Book for the month of January includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - January 2021 - Lucror Analytics

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/dida-inc" target="_blank" data-smartkarma-citation="entities:29701:1" rel="noopener">Dida (DIDA HK)</a> (Dida), a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by JD.com, Hillhouse, Ctrip, Bitauto and a host of other investors.</p></div><div>
<p>Dida claims to operate the largest carpooling marketplace in China with a market share of 66.5% in terms of the number of carpooling rides in 2019, as per Frost &amp; Sullivan (F&amp;S) report. Over 2017-19, Dida’s total revenue increased by 11.87x. Revenue was up another 66% over 6M20. Revenue coming from carpooling has grown 19x over 2017 to 2019 and was up another 66% over 6M20. </p>
<p>We’ve covered the background of the company in our previous note, <a href="https://www.smartkarma.com/insights/dida-pre-ipo-making-hay-while-big-brother-retreats" target="_blank" rel="noopener">Dida Pre-IPO - Making hay while big brother retreats</a>.</p>
<p>In this note, we will undertake a peer comparison.</p>
</div>

Dida (DIDA HK) (Dida), a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by JD.com, Hillhouse, Ctrip, Bitauto and a host of other investors.
Dida claims to operate the largest carpooling marketplace in China with a market share of 66.5% in terms of the number of carpooling rides in 2019, as per Frost &amp; Sullivan (F&amp;S) report. Over 2017-19, Dida’s total revenue increased by 11.87x. Revenue was up another 66% over 6M20. Revenue coming from carpooling has grown 19x over 2017 to 2019 and was up another 66% over 6M20. 
We’ve covered the background of the company in our previous note, Dida Pre-IPO - Making hay while big brother retreats.
In this note, we will undertake a peer comparison.


Dida Pre-IPO - Peer Comparison - Lagging in Scale, Leading in Profitability

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

<p>Whilst Q4's list posted strong price performance it was a case that a rising tide floated most boats. As in the previous few quarters, we are on the watch for the risk of deteriorating credit metrics, but in particular during H1 2021. In Q1, the Altman Z score is at a market-cap-weighted 1.03 times, a significant decrease on the 1.52 in Q4. This deterioration needs to be monitored since earnings continue to be adjusted by analysts and their limited visibility of any bottoming. 25 stocks appear in our Q1 2021 screen, versus 15 in Q4 2020.</p>

Whilst Q4's list posted strong price performance it was a case that a rising tide floated most boats. As in the previous few quarters, we are on the watch for the risk of deteriorating credit metrics, but in particular during H1 2021. In Q1, the Altman Z score is at a market-cap-weighted 1.03 times, a significant decrease on the 1.52 in Q4. This deterioration needs to be monitored since earnings continue to be adjusted by analysts and their limited visibility of any bottoming. 25 stocks appear in our Q1 2021 screen, versus 15 in Q4 2020.

Screening the Silk Road: Q1 2021 High Risk Names to Avoid

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<div><p><span xml:lang="EN-US" data-contrast="auto"><a href="https://www.smartkarma.com/entities/neural-pocket-inc" target="_blank" data-smartkarma-citation="entities:31125:1" rel="noopener">Neural Pocket Inc (4056 JP)</a>  develops and applies Artificial Intelligence (AI) technology that spans the areas of Edge AI and Object/Person Recognition. The company uses advanced proprietary AI libraries on platforms that apply active learning to advance research and development for new applications within their focus areas.</span><span data-ccp-props='{"201341983":0,"335559739":200,"335559740":276}'> </span></p></div><div>
<p><span xml:lang="EN-US" data-contrast="auto">Neural Pocket currently applies its AI technologies to three broad areas: Smart City, Signage, and Fashion. </span></p>
<p><span xml:lang="EN-US" data-contrast="auto">The <strong>Smart City</strong> focus is to digitize physical spaces and add value to urban areas. There are wide-ranging applications to everyday life, spanning energy-saving, supply chains, mobility, rail transportation, distribution, retailing, car parks, and others.</span> <br> <br><span xml:lang="EN-US" data-contrast="auto">The <strong>Signage</strong> business fits into the growing trend towards online advertising by operating digital signage in cities. For example, billboards can send out flexible and targeted ads based on AI-driven pedestrian attribute analysis.</span> <br> <br><span xml:lang="EN-US" data-contrast="auto">Finally, the <strong>Fashion</strong> business, which analyses fashion trends, helps companies by </span><span xml:lang="EN-US" data-contrast="auto">providing</span><span xml:lang="EN-US" data-contrast="auto"> information to address surplus stock problems, discounting, and waste by bringing a science-based approach to merchandising and product planning. </span> </p>
<p><strong><span xml:lang="EN-US" data-contrast="auto">Key Stats</span></strong></p>
<table class="table table-striped"><tbody>
<tr>
<td>Name </td>
<td>Neural Pocket</td>
</tr>
<tr>
<td>Ticker</td>
<td>4056 JP</td>
</tr>
<tr>
<td>Market Cap ($m)</td>
<td>810</td>
</tr>
<tr>
<td>Business</td>
<td>AI Solutions</td>
</tr>
<tr>
<td>LTM Sales ($m)</td>
<td>6</td>
</tr>
<tr>
<td>Sales Growth (MRQ)</td>
<td>104%</td>
</tr>
<tr>
<td>GPM</td>
<td>73%</td>
</tr>
<tr>
<td>EV/Sales (FY2)</td>
<td>118x</td>
</tr>
</tbody></table>
</div>

Neural Pocket Inc (4056 JP)  develops and applies Artificial Intelligence (AI) technology that spans the areas of Edge AI and Object/Person Recognition. The company uses advanced proprietary AI libraries on platforms that apply active learning to advance research and development for new applications within their focus areas. 
Neural Pocket currently applies its AI technologies to three broad areas: Smart City, Signage, and Fashion. 
The Smart City focus is to digitize physical spaces and add value to urban areas. There are wide-ranging applications to everyday life, spanning energy-saving, supply chains, mobility, rail transportation, distribution, retailing, car parks, and others.    The Signage business fits into the growing trend towards online advertising by operating digital signage in cities. For example, billboards can send out flexible and targeted ads based on AI-driven pedestrian attribute analysis.    Finally, the Fashion business, which analyses fashion trends, helps companies by providing information to address surplus stock problems, discounting, and waste by bringing a science-based approach to merchandising and product planning.  
Key Stats


Name 
Neural Pocket


Ticker
4056 JP


Market Cap ($m)
810


Business
AI Solutions


LTM Sales ($m)
6


Sales Growth (MRQ)
104%


GPM
73%


EV/Sales (FY2)
118x




Japan Small Cap Growth: Neural Pocket - Making Cities Smarter

Japan

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

Price Gauge
52-week Range	0.00 - 0.00
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Softbank Group (9984 JP)

Asia HY Monthly - USD Bond Defaults In China - Lucror Analytics

In this month's “In-Focus”, we look at the Chinese offshore bond defaults in 2020. A record 12 issuers defaulted on USD Notes during the year,...

Lucror Analytics

Asia HY Trade Book - January 2021 - Lucror Analytics

The Asia HY Trade Book for the month of January includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

Lucror Analytics

Dida Pre-IPO - Peer Comparison - Lagging in Scale, Leading in Profitability

Dida (DIDA HK) (Dida), a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by...

Sumeet Singh

Screening the Silk Road: Q1 2021 High Risk Names to Avoid

As in the previous few quarters, we are on the watch for the risk of deteriorating credit metrics, but in particular during H1 2021. 25 stocks...

David Lepper

Japan Small Cap Growth: Neural Pocket - Making Cities Smarter

Neural Pocket creates AI services that contribute to society through the use of image and video analysis based on proprietary AI altos. In short,...

Mark Chadwick

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