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/> The Asia HY Trade Book for the month of September 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 September 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 - September 2020 - 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/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> raised around US$540m in its US listing. Chindata is a data centre solution provider in Asia-Pacific with a focus on China. It currently operates six data centers in China and one in Malaysia and has numerous more data centers under construction. The company is backed by Bain Capital.</p></div><div>
<p>I've covered the various aspects of the deal in my earlier notes, <a href="https://www.smartkarma.com/insights/chindata-group-holdings-pre-ipo-patchy-data-but-is-growing-fast-in-a-hot-sector" target="_blank" rel="noopener">Chindata Group Holdings Pre-IPO - Patchy data but is growing fast in a hot sector</a> and <a href="https://www.smartkarma.com/insights/chindata-group-ipo-riding-high-on-sector-momentum" target="_blank" rel="noopener">Chindata Group IPO - Riding High on Sector Momentum.</a></p>
<p>In this note, I'll talk about the deal dynamics and provide a table with implied valuation at different ADR levels. </p>
</div>

Chindata (CD US) raised around US$540m in its US listing. Chindata is a data centre solution provider in Asia-Pacific with a focus on China. It currently operates six data centers in China and one in Malaysia and has numerous more data centers under construction. The company is backed by Bain Capital.
I've covered the various aspects of the deal in my earlier notes, Chindata Group Holdings Pre-IPO - Patchy data but is growing fast in a hot sector and Chindata Group IPO - Riding High on Sector Momentum.
In this note, I'll talk about the deal dynamics and provide a table with implied valuation at different ADR levels. 


Chindata Group IPO Trading - Would Book Profits if It Trades at a Premium

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Stories appeared Thursday in China talking about (and showing a picture of) a purported letter from <a href="https://www.smartkarma.com/entities/evergrande-real-estate-group-limited" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> to the Guangdong government dated 24 August asking for assistance in restructuring. The letter is reported to have said that its cashflow would be endangered because of a need to repay RMB 130 billion to strategic investors by end January 2021 if Evergrande did not achieve a backdoor listing of its principal mainland subsidiary Hengda Real Estate (which it has been trying to do for three years by injecting Hengda into Shenzhen-listed Shenzhen Special Economic Zone Real Estate &amp; Properties Group Co. Ltd.), and such asset sales and lack of ability to raise debt would impair the smooth functioning of the real estate and loan market. The letter asks for assistance in moving forward the listing plan, despite the fact that this would break the informal ban on listing new real estate companies on local exchanges.</p><p>I refer to media reports about this story in <a href="https://www.bloomberg.com/news/articles/2020-09-24/evergrande-warns-of-looming-liquidity-crunch-spooking-investors" target="_blank" rel="noopener">Bloomberg</a>, <a href="https://www.caixinglobal.com/2020-09-25/china-developer-evergrande-denies-its-seeking-government-support-101609336.html" target="_blank" rel="noopener">Caixin Global</a>, <a href="https://uk.reuters.com/article/china-evergrande/chinas-no-2-developer-evergrande-pleads-for-government-support-to-avoid-cash-crunch-idINL3N2GL2H9" target="_blank" rel="noopener">Reuters</a>, and others about the purported letter.</p><p>Evergrande issued a <strong>SOLEMN DECLARATION</strong> via the HKEX Friday night. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/716/original/Screenshot%202020-09-25%20at%2012.30.05%20PM.png?1601008218" class="editor-image img-responsive" data-smartkarma-image-id="161716"></figure><p>The story introduced a fair bit of volatility in trading Friday 25 September 2020. The shares fell early, rose to be +6% on the day, then fell sharply - at one point -14.6% on the day.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/768/original/Screenshot%202020-09-25%20at%208.28.09%20PM.png?1601036926" class="editor-image img-responsive" data-smartkarma-image-id="161768"></figure><p>194.7 million shares traded. That is the highest in more than 3 years, and represents over 13% of the Real World Float of the company. The stock ended down 9.5% on the day. </p><p><a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">China Evergrande New Energy Vehicle Group (708 HK)</a> was down 13% on Friday. The whole China real estate developer sector listed in Hong Kong fell in a sea of red. Bloomberg <a href="https://www.bloomberg.com/news/articles/2020-09-25/evergrande-faces-crisis-of-confidence-over-120-billion-debt?sref=ZEpEDN5v" target="_blank" rel="noopener">reported</a> the dollar bonds of Evergrande were the worst performer in the Bloomberg Barclays Asia Dollar Bond index. And the domestic bonds fell sharply, with a yuan bond due 2022 falling 18% to RMB 77.7 and a 2024 dropping 30% to 65.9 yuan, with trading reportedly suspended. </p><p>The company came out again on Friday to say that business was doing OK. But clearly, some people see an issue.</p><p>Much more below the fold.</p><div><p></p></div>

Stories appeared Thursday in China talking about (and showing a picture of) a purported letter from Evergrande Real Estate Group (3333 HK) to the Guangdong government dated 24 August asking for assistance in restructuring. The letter is reported to have said that its cashflow would be endangered because of a need to repay RMB 130 billion to strategic investors by end January 2021 if Evergrande did not achieve a backdoor listing of its principal mainland subsidiary Hengda Real Estate (which it has been trying to do for three years by injecting Hengda into Shenzhen-listed Shenzhen Special Economic Zone Real Estate &amp; Properties Group Co. Ltd.), and such asset sales and lack of ability to raise debt would impair the smooth functioning of the real estate and loan market. The letter asks for assistance in moving forward the listing plan, despite the fact that this would break the informal ban on listing new real estate companies on local exchanges.I refer to media reports about this story in Bloomberg, Caixin Global, Reuters, and others about the purported letter.Evergrande issued a SOLEMN DECLARATION via the HKEX Friday night. The story introduced a fair bit of volatility in trading Friday 25 September 2020. The shares fell early, rose to be +6% on the day, then fell sharply - at one point -14.6% on the day.194.7 million shares traded. That is the highest in more than 3 years, and represents over 13% of the Real World Float of the company. The stock ended down 9.5% on the day. China Evergrande New Energy Vehicle Group (708 HK) was down 13% on Friday. The whole China real estate developer sector listed in Hong Kong fell in a sea of red. Bloomberg reported the dollar bonds of Evergrande were the worst performer in the Bloomberg Barclays Asia Dollar Bond index. And the domestic bonds fell sharply, with a yuan bond due 2022 falling 18% to RMB 77.7 and a 2024 dropping 30% to 65.9 yuan, with trading reportedly suspended. The company came out again on Friday to say that business was doing OK. But clearly, some people see an issue.Much more below the fold.

Evergrande May Be Facing a Funding Squeeze

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<div><p><a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> is a data centre operator which is backed by Bain Capital (57.17% shareholder), APG Strategic Real Estate Pool/Dutch pension funds (10.43%) and <a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Holdings (034730 KS)</a> (8.94%). Chindata has launched its IPO at a price range of $11.50-13.50 per ADS. There is also a $135 million concurrent private placement with <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a> ($65 million), Sequoia Capital ($40 million) and Mr Hui Wing Mau, Chairman of Shimao Group ($30 million). At the mid-point of the IPO price range and along with the concurrent private placement, Chindata will raise net proceeds of $597 million. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/chindata-group-ipo-initiation-where-the-cloud-meets-the-ground" target="_blank" rel="noopener">our initiation note</a>, we stated that Chindata is an attractive play on the favourable Asia-Pacific hyperscale data centre market dynamics. Overall, we would be inclined to participate in the IPO at the proposed price range. </p></div></div></div>

Chindata (CD US) is a data centre operator which is backed by Bain Capital (57.17% shareholder), APG Strategic Real Estate Pool/Dutch pension funds (10.43%) and SK Holdings (034730 KS) (8.94%). Chindata has launched its IPO at a price range of $11.50-13.50 per ADS. There is also a $135 million concurrent private placement with Country Garden Holdings Co (2007 HK) ($65 million), Sequoia Capital ($40 million) and Mr Hui Wing Mau, Chairman of Shimao Group ($30 million). At the mid-point of the IPO price range and along with the concurrent private placement, Chindata will raise net proceeds of $597 million. In our initiation note, we stated that Chindata is an attractive play on the favourable Asia-Pacific hyperscale data centre market dynamics. Overall, we would be inclined to participate in the IPO at the proposed price range. 

<p><a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> aims to raise around US$540m in its US listing. Chindata is a data centre solution provider in Asia-Pacific with a focus on China. It currently operates six data centers in China and one in Malaysia and has numerous more data centers under construction.</p><p>The company is backed by Bain Capital and is almost like a startup, in the sense that it was recently formed via the merger of a China and Asia-Pac entity. Given the relative freshness of the firm, the company has taken the liberty of providing financials just for the past 18 months, which of course show rapid growth. Also, it doesn’t provide a whole lot of details about its individual assets. Furthermore, its two large clients account for a huge chunk of its revenue, one of which is <a href="https://www.smartkarma.com/entities/bytedance-technology" target="_blank" data-smartkarma-citation="entities:27936:1" rel="noopener">ByteDance (1460967D CH)</a>, the other being <a href="https://www.smartkarma.com/entities/shanghai-wangsu-science-technology-co" target="_blank" data-smartkarma-citation="entities:9722:1" rel="noopener">Shanghai Wangsu Science &amp; Technology Co (300017 CH)</a>.</p><p>On the positive side, Chindata has plans to more than double its capacity by the end of 2021, which will ensure that growth remains strong. Moreover, its Chairman and founder appear to have ample experience in the sector. </p><p>I spoke about the above points and more in my earlier note. In this note, I’ll talk about deal dynamics and valuations.</p><p><strong>Our previous coverage of the IPO:</strong></p><ul><li dir="ltr"><p><a href="https://www.smartkarma.com/insights/chindata-group-holdings-pre-ipo-patchy-data-but-is-growing-fast-in-a-hot-sector" target="_blank" rel="noopener">Chindata Group Holdings Pre-IPO - Patchy data but is growing fast in a hot sector</a></p></li></ul>

Chindata (CD US) aims to raise around US$540m in its US listing. Chindata is a data centre solution provider in Asia-Pacific with a focus on China. It currently operates six data centers in China and one in Malaysia and has numerous more data centers under construction.The company is backed by Bain Capital and is almost like a startup, in the sense that it was recently formed via the merger of a China and Asia-Pac entity. Given the relative freshness of the firm, the company has taken the liberty of providing financials just for the past 18 months, which of course show rapid growth. Also, it doesn’t provide a whole lot of details about its individual assets. Furthermore, its two large clients account for a huge chunk of its revenue, one of which is ByteDance (1460967D CH), the other being Shanghai Wangsu Science &amp; Technology Co (300017 CH).On the positive side, Chindata has plans to more than double its capacity by the end of 2021, which will ensure that growth remains strong. Moreover, its Chairman and founder appear to have ample experience in the sector. I spoke about the above points and more in my earlier note. In this note, I’ll talk about deal dynamics and valuations.Our previous coverage of the IPO:Chindata Group Holdings Pre-IPO - Patchy data but is growing fast in a hot sector

Chindata Group IPO - Riding High on Sector Momentum

China

Country Garden Holdings Company Limited is a real estate developer.  The Company builds villas, townhouses and apartments in Mainland China. Country Gardens also develops large-scale community facilities such as schools, hotels, hospitals, and theme parks.

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Country Garden Holdings Co (2007 HK)

Asia HY Trade Book - September 2020 - Lucror Analytics

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

Lucror Analytics

Chindata Group IPO Trading - Would Book Profits if It Trades at a Premium

Chindata (CD US) aims to raise around US$540m in its US listing. Chindata is a data centre solution provider in Asia-Pacific with a focus on...

Sumeet Singh

Evergrande May Be Facing a Funding Squeeze

Stori

Travis Lundy

Chindata Group IPO: Valuation Insights

Ming Yuan Cloud Group (MYCG HK) is the leading software solution provider for property developers in China with a market share of 18.5% as...

Arun George

Chindata Group IPO - Riding High on Sector Momentum

Chindata Group Holdings aims to raise around US$540m in its US listing. Chindata is a data centre solution provider in Asia-Pacific with a focus on...

Sumeet Singh

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