Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*New Mainland China Deal Doesn’t Pass Smell Test: Link REIT (823.HK) [Link] announced the acquisition of a 50% stake in Qibao Vanke Plaza (QVP) - a retail shopping mall in Minhang, Shanghai, for CNY 2.8 bn. QVP will remain the shopping mall operator, while Link will have an equal number of board seats and committee representatives as the shopping mall operator. While its unclear if the numbers make any sense given the rental reversion and massive re-tenanting that would have to take place to cover the 3.0% plus per annum CNY financing cost, the lack of control over this property also raises significant risks for Link; and*Fundamental Risks Remain: Link remains in a real quandary - it continues to operate at a loss. Losses were attributed to negative fair value marks. While results on an operating basis were positive, the trend unfortunately remains negative for Link – declining HKD 564 mn (15.1%). The poor operating results were driven by weaker Hong Kong rental income which declined HKD 186 mn (5.4%) HOH; and a HKD 55 mn (9.8%) decline in mainland Chinese property-related revenues – begging the question of why mainland China acquisitions now?

*New Mainland China Deal Doesn’t Pass Smell Test: Link REIT (823.HK) [Link] announced the acquisition of a 50% stake in Qibao Vanke Plaza (QVP) - a retail shopping mall in Minhang, Shanghai, for CNY 2.8 bn. QVP will remain the shopping mall operator, while Link will have an equal number of board seats and committee representatives as the shopping mall operator. While its unclear if the numbers make any sense given the rental reversion and massive re-tenanting that would have to take place to cover the 3.0% plus per annum CNY financing cost, the lack of control over this property also raises significant risks for Link; and*Fundamental Risks Remain: Link remains in a real quandary - it continues to operate at a loss. Losses were attributed to negative fair value marks. While results on an operating basis were positive, the trend unfortunately remains negative for Link – declining HKD 564 mn (15.1%). The poor operating results were driven by weaker Hong Kong rental income which declined HKD 186 mn (5.4%) HOH; and a HKD 55 mn (9.8%) decline in mainland Chinese property-related revenues – begging the question of why mainland China acquisitions now?

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”, we look at the Chinese offshore bond defaults in 2020. A record 12 issuers defaulted on USD Notes during the year, with a substantial share of them being SOEs. We review broader trends as well as select cases, and discuss our takeaways on how best to asses the credit profiles of Chinese issuers. 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”, we look at the Chinese offshore bond defaults in 2020. A record 12 issuers defaulted on USD Notes during the year, with a substantial share of them being SOEs. We review broader trends as well as select cases, and discuss our takeaways on how best to asses the credit profiles of Chinese issuers.   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 - USD Bond Defaults In China - 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-18054'>China Fortune Land</a></li><li><a href='#lucror-entity-19717'>Gcl New Energy Holdings</a></li><li><a href='#lucror-entity-227'>Guangzhou R&F Properties</a></li><li><a href='#lucror-entity-15142'>Pan Brothers</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.China Fortune LandGcl New Energy HoldingsGuangzhou R&F PropertiesPan Brothers

Morning Views Asia: China Fortune Land, Gcl New Energy Holdings, Guangzhou R&F Properties

The Asia HY Trade Book for the month of January 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.

  The Asia HY Trade Book for the month of January 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 - January 2021 - 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><li><a href='#lucror-entity-3121'>Lippo Karawaci</a></li><li><a href='#lucror-entity-7845'>Road King Infrastructure</a></li><li><a href='#lucror-entity-22202'>Vedanta Resources</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 PropertiesLippo KarawaciRoad King InfrastructureVedanta Resources

Morning Views Asia: Guangzhou R&F Properties, Lippo Karawaci, Road King Infrastructure

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)

Link REIT – Same Old, Same Old

LINK REIT: Link is acquiring a 50% stake in Qibao Vanke Plaza (QVP) in China. Its unclear if the numbers make sense given the variables, the lack...

Thomas J. Monaco

Asia HY Monthly - USD Bond Defaults In China - Lucror Analytics

In this month's “In-Focus”, we look at the Chinese offshore bond defaults in 2020. A record 12 issuers defaulted on USD Notes during the year,...

Lucror Analytics

Morning Views Asia: China Fortune Land, Gcl New Energy Holdings, 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

Asia HY Trade Book - January 2021 - Lucror Analytics

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

Lucror Analytics

Morning Views Asia: Guangzhou R&F Properties, Lippo Karawaci, Road King Infrastructure

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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