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

We view Binhai Investment as “Medium Risk” on the LARA scale. This reflects the company's: [1] high-quality assets, with a duopoly position primarily in Tianjin municipality; [2] decent track record of operations; and [3] close affiliation with the Tianjin government. This is balanced by its: [1] geographical concentration in Tianjin and small operational scale; [2] regulatory risks related to the pass-through of gas prices to end-customers; [3] exposure to FX fluctuations; [4] weak operating profile, with a declining gross margin; and [5] weak indenture lacking financial covenants, albeit there is a letter of support from parent TEDA. Our fundamental Credit Bias is “Negative”, due to Binhai’s weak profitability, negative FCF generation and increased debt. We view the group as “Weak” on the LAGA scale. Binhai is 63% owned by TEDA, which is in turn a SOE owned by the Tianjin SASAC. The parent has a significant presence on Binhai’s Board and among its senior management. We view negatively the significant level of related-party transactions between Binhai and TEDA.

   We view Binhai Investment as “Medium Risk” on the LARA scale. This reflects the company's: [1] high-quality assets, with a duopoly position primarily in Tianjin municipality; [2] decent track record of operations; and [3] close affiliation with the Tianjin government. This is balanced by its: [1] geographical concentration in Tianjin and small operational scale; [2] regulatory risks related to the pass-through of gas prices to end-customers; [3] exposure to FX fluctuations; [4] weak operating profile, with a declining gross margin; and [5] weak indenture lacking financial covenants, albeit there is a letter of support from parent TEDA.    Our fundamental Credit Bias is “Negative”, due to Binhai’s weak profitability, negative FCF generation and increased debt.    We view the group as “Weak” on the LAGA scale. Binhai is 63% owned by TEDA, which is in turn a SOE owned by the Tianjin SASAC. The parent has a significant presence on Binhai’s Board and among its senior management. We view negatively the significant level of related-party transactions between Binhai and TEDA. 

Binhai Investment - Tear Sheet - Lucror Analytics

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.

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. 

Lucror Analytics - Morning Views Asia - 12 Nov 2018

In this month’s “In-Focus” section, we discuss Corporate Governance in Chinese Companies. Specifically, we highlight: [1] the nascent development of the Chinese corporate governance regime; [2] the lack of strong external examination/review; [3] different types of Chinese public companies; and [4] Lucror’s approach to assessing corporate governance. 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.

   In this month’s “In-Focus” section, we discuss Corporate Governance in Chinese Companies. Specifically, we highlight: [1] the nascent development of the Chinese corporate governance regime; [2] the lack of strong external examination/review; [3] different types of Chinese public companies; and [4] Lucror’s approach to assessing corporate governance.    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 - Corporate Governance In Chinese Companies - Lucror Analytics

Hong Kong

Binhai Investment Company Ltd, through its subsidiaries, operates gas businesses.  The Company constructs gas pipeline networks, provides piped gas to customers in mainland China, wholesales and retails liquefied petroleum gas (LPG) by way of refueling gas cylinders or tanks for domestic, industrial and commercial customers, and sell LPG equipment and domestic gas appliances.

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Binhai Investment (2886 HK)

Binhai Investment - Tear Sheet - Lucror Analytics

We view Binhai Investment as “Medium Risk” on the LARA scale. This reflects the company's: [1] high-quality assets, with a duopoly position...

Lucror Analytics

Lucror Analytics - Morning Views Asia - 12 Nov 2018

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

Lucror Analytics

Asia HY Monthly - Corporate Governance In Chinese Companies - Lucror Analytics

In this month’s “In-Focus” section, we discuss Corporate Governance in Chinese Companies. Specifically, we highlight: [1] the nascent development...

Lucror Analytics

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