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

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 - 21 Aug 2019

Credit Analyst, Lucror Analytics

Chuanyi Zhou

Credit Analyst

H&H’s results continued to be sound in H1/19. That said, the growth rate was not as high as in 2018. This was partly on account of the strong base in H1/18, which saw the one-time restocking of IMF in February. Profitability was stable and healthy but advertising and marketing spending remained high, though this is likely to benefit the company in the future. The financial risk profile is solid, and liquidity is sound. In H2/19, we expect stronger y-o-y revenue growth, given that the H2/18 performance was soft. We anticipate that EBITDA growth will track that of revenue, with the EBITDA margin holding stable as advertising and marketing costs remain flat (relative to revenues). The financial risk profile should continue to improve as a result, in the absence of debt-funded acquisitions.

   H&H’s results continued to be sound in H1/19. That said, the growth rate was not as high as in 2018. This was partly on account of the strong base in H1/18, which saw the one-time restocking of IMF in February. Profitability was stable and healthy but advertising and marketing spending remained high, though this is likely to benefit the company in the future. The financial risk profile is solid, and liquidity is sound.    In H2/19, we expect stronger y-o-y revenue growth, given that the H2/18 performance was soft. We anticipate that EBITDA growth will track that of revenue, with the EBITDA margin holding stable as advertising and marketing costs remain flat (relative to revenues). The financial risk profile should continue to improve as a result, in the absence of debt-funded acquisitions. 

H&H International - Earnings Flash - H1 FY 2019 Results - Lucror Analytics

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>TME is reported under an anti-trust investigation by the State Administration for Market Regulation (SAMR).</li>
<li>TME almost monopolizes both music copyrights and online music platforms in China.</li>
<li>The Company has exclusive contracts with top-three global music companies.</li>
<li>We believe TME has a downside of 23% even without the anti-trust investigation, as the operating margin declined to 15% in 2Q19 versus 21% in 2Q18.</li>
<li>We believe the copyright business is worth at least USD2.80 per share of the total value of USD10.80 per share.</li>
</ul>


TME is reported under an anti-trust investigation by the State Administration for Market Regulation (SAMR).
TME almost monopolizes both music copyrights and online music platforms in China.
The Company has exclusive contracts with top-three global music companies.
We believe TME has a downside of 23% even without the anti-trust investigation, as the operating margin declined to 15% in 2Q19 versus 21% in 2Q18.
We believe the copyright business is worth at least USD2.80 per share of the total value of USD10.80 per share.


Tencent Music (TME): Anti-Trust Investigation May Take at Least USD2.80 Per Share

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight the proposed changes to the Hong Kong Connect rule that signals a step forward for the inclusion of <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan Dianping (3690 HK)</a> into the Hong Kong Connect that enables mainland investors to trade without strict capital control.

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight the proposed changes to the Hong Kong Connect rule that signals a step forward for the inclusion of Xiaomi Corp (1810 HK) and Meituan Dianping (3690 HK) into the Hong Kong Connect that enables mainland investors to trade without strict capital control. 

HK Connect Ideas: One Step Closer to Xiaomi/Meituan Inclusion (2019-08-02)

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the background of the last cycle, sales trends, regulatory actions and expectations. We also comment broadly on the FY 2018 and Q1/19 results of real estate companies under our coverage.

   In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the background of the last cycle, sales trends, regulatory actions and expectations. We also comment broadly on the FY 2018 and Q1/19 results of real estate companies under our coverage. 

Asia HY Monthly - Indonesian Property Update (2019) - Lucror Analytics

China

Xinjiang Guannong Fruit & Antler (Group) Co., Ltd. cultivates Korla pears, and produces antlers and other health products from red deer. The Company also manufactures and sells carton boxes and fruit packaging materials.

Xinjiang Guanng Fruit & Antler Gp (600251 CH)

Gansu Yasheng Industrial (Group) Co., Ltd. is an investment holding company. Through its subsidiaries, the Company operates in chemical engineering, agricultural production, textile products printing and dyeing, commercial trading, as well as beverage and inorganic salt manufacturing.

Shanghai Maling Aquarius Co., Ltd. manufactures and markets canned food, bottled water, flavorings, frozen food, and other related products.

Yashili International Holdings Ltd. produces dairy products.  The Company operates milk processing plants in Guangdong, Heilongjiang, Shanxi and Henan Provinces in China.

Tenfu Cayman Holdings Co Ltd. is a traditional Chinese tea-product enterprise engaged in the sale and marketing of a comprehensive range of tea products. The Company's key products are tea leaves, tea snacks, and tea ware which are sold through a nationwide network of self-owned and thrid party owned retail outlets.

China Modern Dairy Holdings Ltd. is an industrialized agricultural company. The Company operates dairy farms and produces raw milk in China.  China Modern Dairy Holdings Ltd focuses on large-scale industrialized free-stall dairy farming.

Luoniushan Co., Ltd. produces and markets a variety of agricultural products. The Company's products include pigs, eggs, chickens, and vegetables. Luoniushan also develops real estate and undertakes construction projects.

Guilin Layn Natural Ingredients Corporation developes, manufactures and sells natural ingredients which are derived from plant materials. The Company's botanical extracts are used by the pharmaceutical, food and cosmetic industries to manufacture finished products for the consumer market.

Guilin Layn Natural Ingredients (002166 CH)

Jinzi Ham Company Limited develops, produces and sells Jinhua Ham, ham products and various fermented meat products and low-temperature meat.

Beijing Sanyuan Foods Co., Ltd. produces and sells dairy products such as pasteurized milk, sterilized milk, yogurt, and milk powder. The Comapny also operates real estate business.

KIDO Group Corp produces baked goods and candy. The Company produces cookies, crackers, pies, cakes, and bread, along with chocolate and other candy.

Mitsui Sugar Co., Ltd. produces and sells sugar and related processed products including sweetener and syrup.  The Company produces its products for commercial use and home use.

Vitasoy International Holdings Limited, through its subsidiaries, manufactures and distributes food and beverages.

Piccadily Agro Industries Limited manufacture sugar and its by products.

Sappe Public Company Limited manufactures and distributes health drinks. The Company manufactures dietary and fruit juice drinks. Sappe distributes their products internationally.

Sinar Mas Agro Resources and Technology Tbk PT and its subsidiaries develops oil palm and tea plantations.  The Company produces and trades crude palm oil, palm kernel oil, tea, and refined palm products such as cooking oil and margarine.  Sinar Mas also manufactures packaging products such as bottles and caps as well as provides management services.

Sinar Mas Agro Resources and Technology Tbk PT (SMAR IJ)

Sinar Mas Agro Resources and Technology Tbk PT

PT Astra Agro Lestari Tbk operates rubber plantations and manufactures cooking oil. Through its subsidiaries,  the Company also operates a variety of other plantations such as palm oil, tea, and cocoa plantations.

The Hain Celestial Group, Inc. is a natural and organic beverage, snack, specialty food, and personal care products company.  The Company's product line include grocery store foods such as organic cookies, cooking oils, sugar free products, kosher foods, snacks, and frozen foods, as well as organic skin, hair, and body products. Hain Celestial sells and markets in North America and Europe.

Daesang Corporation manufactures food seasonings, fermentations, sweeteners, starches, coffee, fodder, and bulk pharmaceutical ingredients.  The Company also constructs commercial buildings, infrastructures, and environmental facilities.

President Bakery PCL produces and distributes a wide variety of baked goods to fast food restaurants and convenient stores.  The company also sells its product through its own retail stores under Farmhouse shop and Deliya by Farmhouse.

Health and Happiness H&H International Holdings Ltd provides health care supplements. The Company offers pediatric nutritional and baby care products. Health and Happiness H&H International Holdings serves nutrition and wellness industries worldwide.

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Health And Happiness (H&H) (1112 HK)

Lucror Analytics - Morning Views Asia - 21 Aug 2019

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

Lucror Analytics

H&H International - Earnings Flash - H1 FY 2019 Results - Lucror Analytics

H&H’s results continued to be sound in H1/19. That said, the growth rate was not as high as in 2018. This was partly on account of the strong...

Lucror Analytics

HK Connect Ideas: One Step Closer to Xiaomi/Meituan Inclusion (2019-08-02)

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as...

Ke Yan, CFA, FRM

Asia HY Monthly - Indonesian Property Update (2019) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the background of the last cycle, sales...

Lucror Analytics

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lucror Analytics - Morning Views Asia - 21 Aug 2019

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

Lucror Analytics

H&H International - Earnings Flash - H1 FY 2019 Results - Lucror Analytics

H&H’s results continued to be sound in H1/19. That said, the growth rate was not as high as in 2018. This was partly on account of the strong...

Lucror Analytics

Tencent Music (TME): Anti-Trust Investigation May Take at Least USD2.80 Per Share

TME is reported under an anti-trust investigation by the State Administration for Market Regulation (SAMR). TME almost monopolizes both music...

Ming Lu

HK Connect Ideas: One Step Closer to Xiaomi/Meituan Inclusion (2019-08-02)

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as...

Ke Yan, CFA, FRM

Asia HY Monthly - Indonesian Property Update (2019) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the background of the last cycle, sales...

Lucror Analytics