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

In this month’s "In-Focus" section, we discuss variable interest entities (VIEs) in China, including recent developments in China and the US that may complicate the future use of VIEs. 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.

  In this month’s "In-Focus" section, we discuss variable interest entities (VIEs) in China, including recent developments in China and the US that may complicate the future use of VIEs. 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 Variable Interest Entities - 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.<ul><li><a href='#lucror-entity-227'>Guangzhou R&F Properties</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.Guangzhou R&F Properties

Morning Views Asia: Guangzhou R&F Properties

GRF’s H1/21 results were mixed, but in line with expectations. Negatively, the gross margin continued to contract, albeit management has guided for it to improve in H2. Net debt improved marginally, as the company continues to curtail its land spending. We view positively the substantially reduced interim dividend, as it signals management's commitment to shore up the company’s balance sheet. Although GRF's liquidity remains under pressure, we believe the worst has passed. We note that the company has made proactive efforts to refinance its debt, albeit at higher interest cost. In our view, GRF could face difficulty in issuing medium-term USD bonds for refinancing. That said, we believe the company can still access the 364-day market if needed. We expect GRF to use internally generated cash for the bulk of its debt refinancing. In addition, it could supplement its liquidity through asset sales, depending on market conditions. The company has a large and good-quality land bank, which it could monetise. GRF also has a sizeable investment property portfolio valued at CNY 36.8 bn, covering 25% of adjusted net debt as of June.

  GRF’s H1/21 results were mixed, but in line with expectations. Negatively, the gross margin continued to contract, albeit management has guided for it to improve in H2. Net debt improved marginally, as the company continues to curtail its land spending. We view positively the substantially reduced interim dividend, as it signals management's commitment to shore up the company’s balance sheet.   Although GRF's liquidity remains under pressure, we believe the worst has passed. We note that the company has made proactive efforts to refinance its debt, albeit at higher interest cost. In our view, GRF could face difficulty in issuing medium-term USD bonds for refinancing. That said, we believe the company can still access the 364-day market if needed. We expect GRF to use internally generated cash for the bulk of its debt refinancing. In addition, it could supplement its liquidity through asset sales, depending on market conditions. The company has a large and good-quality land bank, which it could monetise. GRF also has a sizeable investment property portfolio valued at CNY 36.8 bn, covering 25% of adjusted net debt as of June. 

Guangzhou R&F - Earnings Flash - H1 FY 2021 Results - Lucror Analytics

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

The property sector in China has been in the spotlight over the last few years. Regulators have made various attempts to temper price growth but the silver bullet has been elusive so far.The powers that be realise that the lack of affordable housing is one of the reasons for China's birth rate dropping and there is now a renewed effort to ensure that property prices do not continue to run up. As part of the measures that started with the 'Three Red Lines' almost a year ago, Bloomberg reports that China has halted PE funds from raising money to invest in residential property developments.We take a look at some of the regulatory changes that have been implemented over the last year and see how the companies in the sector are faring. We then look for stocks with similar characteristics but different stock returns over the last year to find trade opportunities.

The property sector in China has been in the spotlight over the last few years. Regulators have made various attempts to temper price growth but the silver bullet has been elusive so far.The powers that be realise that the lack of affordable housing is one of the reasons for China's birth rate dropping and there is now a renewed effort to ensure that property prices do not continue to run up. As part of the measures that started with the 'Three Red Lines' almost a year ago, Bloomberg reports that China has halted PE funds from raising money to invest in residential property developments.We take a look at some of the regulatory changes that have been implemented over the last year and see how the companies in the sector are faring. We then look for stocks with similar characteristics but different stock returns over the last year to find trade opportunities.

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.

  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

China

Guangzhou R&F Properties Co., Ltd. operates real estate businesses. The Company provides housing renovation, housing loans, real estate brokerage, property management, and other services. Guangzhou R&F Properties also operates hotel management.

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Guangzhou R&F Properties (2777 HK)

Asia HY Monthly - Chinese Variable Interest Entities - Lucror Analytics

In this month’s "In-Focus" section, we discuss variable interest entities (VIEs) in China, including recent developments in China and the US that...

Lucror Analytics

Morning Views Asia: Guangzhou R&F Properties

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

Lucror Analytics

Guangzhou R&F - Earnings Flash - H1 FY 2021 Results - Lucror Analytics

GRF’s H1/21 results were mixed, but in line with expectations. Negatively, the gross margin continued to contract, albeit management has guided...

Lucror Analytics

China Property Sector: Trading Ideas

The China property sector has been in the regulatory crosshairs and new rules continue to be rolled out. We look for trading opportunities in the...

Brian Freitas

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

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