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" section, we discuss Chinese developers’ urban redevelopment businesses, including local governments' role in urban renewal projects and the various redevelopment models, as well as the impact of such projects on companies' financials. We also give an overview of recent bond defaults.<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" section, we discuss Chinese developers’ urban redevelopment businesses, including local governments' role in urban renewal projects and the various redevelopment models, as well as the impact of such projects on companies' financials. We also give an overview of recent bond defaults.   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 - Chinese Developers’ Urban Redevelopment Businesses - Lucror Analytics

<p><br/> The Asia HY Trade Book for the month of July 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 July 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 - July 2021 - Lucror Analytics

<p><br/> Melco Resorts' (MLCO) Q2/21 results were within expectations, with its Macau assets reporting improved q-o-q GGR which slightly outpaced that of the industry. This was partly offset by a weaker showing from the company's Manila property. We estimate that MLCO's OCF (after interest payments) remains slightly negative. Moreover, the company has substantial capex requirements, which should keep FCF in the red. While liquidity remains strong, we expect MLCO’s debt to continue rising through FY 2021.<br/><br/> Overall, Macau's YTD GGR recovery has been weaker than anticipated, with H1/21 GGR reaching only 33% of the H1/19 level. We have revised our estimate for the industry's FY 2021 GGR to 40-50% of the pre-COVID 19 level, down from the 50-70% we projected last year. A faster recovery will mainly be contingent on the further easing of Macau/Mainland travel visa requirements, as well as the resumption of quarantine-free travel between the territory and Hong Kong. The industry continues to face travel restriction risks if there are fresh COVID-19 outbreaks in Guangdong or Hong Kong.<br/></p>

  Melco Resorts' (MLCO) Q2/21 results were within expectations, with its Macau assets reporting improved q-o-q GGR which slightly outpaced that of the industry. This was partly offset by a weaker showing from the company's Manila property. We estimate that MLCO's OCF (after interest payments) remains slightly negative. Moreover, the company has substantial capex requirements, which should keep FCF in the red. While liquidity remains strong, we expect MLCO’s debt to continue rising through FY 2021.   Overall, Macau's YTD GGR recovery has been weaker than anticipated, with H1/21 GGR reaching only 33% of the H1/19 level. We have revised our estimate for the industry's FY 2021 GGR to 40-50% of the pre-COVID 19 level, down from the 50-70% we projected last year. A faster recovery will mainly be contingent on the further easing of Macau/Mainland travel visa requirements, as well as the resumption of quarantine-free travel between the territory and Hong Kong. The industry continues to face travel restriction risks if there are fresh COVID-19 outbreaks in Guangdong or Hong Kong. 

Melco Resorts - Earnings Flash - Q2 FY 2021 Results - Lucror Analytics

<p>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.</p><ul><li><a href='#lucror-entity-810'>Melco Resorts & Entertainment</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.Melco Resorts & Entertainment

Morning Views Asia: Melco Resorts & Entertainment

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Melco International Development / Event-Driven

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International Development (200 HK)</a>'s has bounced off its all-time low NAV discount and implied stub back in March, and is now back to +2 STD levels. </p>
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<p>Preceding my comments on Melco are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Melco International Development (200 HK)'s has bounced off its all-time low NAV discount and implied stub back in March, and is now back to +2 STD levels. 




Preceding my comments on Melco are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: Lock In Profits As Melco's NAV Discount Narrows

Hong Kong

Melco Resorts & Entertainment Limited develops, owns, and operates casinos. The Company offers casino gaming, restaurants, bars, and resorts facilities. Melco Resorts & Entertainment serves customers in Asia.

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Melco Resorts & Entertainment (MLCO US)

Asia HY Monthly - Chinese Developers’ Urban Redevelopment Businesses - Lucror Analytics

In this month’s "In-Focus" section, we discuss Chinese developers’ urban redevelopment businesses, including local governments' role in urban...

Lucror Analytics

Asia HY Trade Book - July 2021 - Lucror Analytics

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

Lucror Analytics

Melco Resorts - Earnings Flash - Q2 FY 2021 Results - Lucror Analytics

Melco Resorts' (MLCO) Q2/21 results were within expectations, with its Macau assets reporting improved q-o-q GGR which slightly outpaced that of...

Lucror Analytics

Morning Views Asia: Melco Resorts & Entertainment

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

Lucror Analytics

StubWorld: Lock In Profits As Melco's NAV Discount Narrows

If you had set-up Melco - Long Melco and Short MLCO - I'd unwind that trade. I'd be inclined to reverse the stub here - Short Melco and Long MLCO.

David Blennerhassett

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