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>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-479'>Evergrande Real Estate Group</a></li><li><a href='#lucror-entity-20934'>Tata Steel Ltd</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.Evergrande Real Estate GroupTata Steel Ltd

Morning Views Asia: Evergrande Real Estate Group, Tata Steel Ltd

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Xiaomi, AGL Energy, TOPIX's Big April Basket, Evergrande Auto

Credit Analyst, Lucror Analytics

Chuanyi Zhou

Credit Analyst

<p><br/> China Evergrande’s FY 2020 results were in line with our expectations. The contracted sales and revenue growth was satisfactory, but profit declined and the margins were weaker. The margin pressure should persist, given the downward trend for contracted ASPs as well as the increasing land and construction costs. However, the company has little choice but to continue its price-cutting strategy, in order to bolster sales and ensure sufficient liquidity.<br/><br/> The credit profile is highly levered, and Evergrande was in breach of all three of the regulator's thresholds. This means that the company is no longer able to pursue debt-fuelled growth, as no additional debt is allowed. Positively, the company reduced its borrowings in FY 2020. In order to further reduce debt, Evergrande intends to repay all overseas debt during FY 2021 using self-owned funds.<br/></p>

  China Evergrande’s FY 2020 results were in line with our expectations. The contracted sales and revenue growth was satisfactory, but profit declined and the margins were weaker. The margin pressure should persist, given the downward trend for contracted ASPs as well as the increasing land and construction costs. However, the company has little choice but to continue its price-cutting strategy, in order to bolster sales and ensure sufficient liquidity.   The credit profile is highly levered, and Evergrande was in breach of all three of the regulator's thresholds. This means that the company is no longer able to pursue debt-fuelled growth, as no additional debt is allowed. Positively, the company reduced its borrowings in FY 2020. In order to further reduce debt, Evergrande intends to repay all overseas debt during FY 2021 using self-owned funds. 

China Evergrande - Earnings Flash - FY 2020 Results - Lucror Analytics

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<p>This week in StubWorld ...</p>
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<p>A bubble warning on <a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">Evergrande Auto (708 HK)</a> from state-media suggests <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>, at a 77% discount to NAV, is a better bet.</p>
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<p>Preceding my comments on Evergrande 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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This week in StubWorld ...




A bubble warning on Evergrande Auto (708 HK) from state-media suggests Evergrande Real Estate Group (3333 HK), at a 77% discount to NAV, is a better bet.




Preceding my comments on Evergrande 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%.


StubWorld: Evergrande Auto's Bubble Trouble

<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-942'>Car Inc</a></li><li><a href='#lucror-entity-479'>Evergrande Real Estate Group</a></li><li><a href='#lucror-entity-5225'>Country Garden Holdings Co</a></li><li><a href='#lucror-entity-2667'>Soechi Lines</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.Car IncEvergrande Real Estate GroupCountry Garden Holdings CoSoechi Lines

Morning Views Asia: Car Inc, Evergrande Real Estate Group, Country Garden Holdings Co, Soechi Lines

China

China Evergrande Group is an integrated residential property developer. The Company, through its subsidiaries, operates in property development, investment, management, finance, internet, health, culture, and tourism markets.

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Evergrande (3333 HK)

Morning Views Asia: Evergrande Real Estate Group, Tata Steel Ltd

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

Lucror Analytics

Last Week in Event SPACE: Xiaomi, AGL Energy, TOPIX's Big April Basket, Evergrande Auto

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

China Evergrande - Earnings Flash - FY 2020 Results - Lucror Analytics

China Evergrande’s FY 2020 results were in line with our expectations. The contracted sales and revenue growth was satisfactory, but profit...

Lucror Analytics

StubWorld: Evergrande Auto's Bubble Trouble

CEA's hare price appears unsustainable. Xinhua's commentary is stating the obvious. CEG is a set-up here versus CEA. CEG is tightly held. It would...

David Blennerhassett

Morning Views Asia: Car Inc, Evergrande Real Estate Group, Country Garden Holdings Co, Soechi Lines

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

Lucror Analytics

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