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.

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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 provide an update on the Chinese property sector, including operational trends and regulatory developments, as well as an overview of the FY 2020 results of most developers under our full coverage. 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 provide an update on the Chinese property sector, including operational trends and regulatory developments, as well as an overview of the FY 2020 results of most developers under our full coverage.   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 Property Update (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-9757'>Fantasia Holdings Group Co</a></li><li><a href='#lucror-entity-14896'>Jingrui Holdings</a></li><li><a href='#lucror-entity-18561'>JSW Steel Ltd</a></li><li><a href='#lucror-entity-29199'>Shimao Services Holdings Limited</a></li><li><a href='#lucror-entity-240'>Sunac China Holdings</a></li><li><a href='#lucror-entity-18067'>Yestar Healthcare Holdings</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.Fantasia Holdings Group CoJingrui HoldingsJSW Steel LtdShimao Services Holdings LimitedSunac China HoldingsYestar Healthcare Holdings

Morning Views Asia: Fantasia Holdings Group Co, Jingrui Holdings, JSW Steel Ltd

Credit Analyst, Lucror Analytics

Chuanyi Zhou

Credit Analyst

Logan’s 2020 operating results were in line with our expectations. We remain cautious on the surge in borrowings to support expansion, as well as the weaker disclosure. Growth in contracted sales and revenues were both robust, reflecting good sales execution and a satisfactory pace of property delivery. Margins contracted but remained strong compared to peers'. We note that the contracted ASP has been on an uptrend while the cost of land may also have been increasing, though the company has ceased to disclose the average unit cost. The pace of Logan's expansion in 2020 seemed aggressive, and was mainly funded by debt. Borrowings increased during the year, since Logan was active in debt financing and requires more bank loans to fund construction as it delivers properties. The impact on credit metrics was mixed, as debt increased faster than revenues while EBITDA remained strong.

  Logan’s 2020 operating results were in line with our expectations. We remain cautious on the surge in borrowings to support expansion, as well as the weaker disclosure.   Growth in contracted sales and revenues were both robust, reflecting good sales execution and a satisfactory pace of property delivery. Margins contracted but remained strong compared to peers'. We note that the contracted ASP has been on an uptrend while the cost of land may also have been increasing, though the company has ceased to disclose the average unit cost.   The pace of Logan's expansion in 2020 seemed aggressive, and was mainly funded by debt. Borrowings increased during the year, since Logan was active in debt financing and requires more bank loans to fund construction as it delivers properties. The impact on credit metrics was mixed, as debt increased faster than revenues while EBITDA remained strong. 

Logan Group - Earnings Flash - FY 2020 Results - Lucror Analytics

Jingrui’s FY 2020 results were weaker than we had expected, with lower revenues, weak margins, and higher borrowings. They also contrasted significantly with the H1 results, which had reflected strong y-o-y top-line growth, better margins, and stable debt. Jingrui's credit profile remains weak, having deteriorated further on account of the poor operating results and higher debt. Contracted sales were flat y-o-y in 2020 and robust in the first two months of 2021. This should translate into a good base for revenue recognition in 2021, given its undelivered portfolio and the increase in bank loans (which could have gone towards supporting construction work). The maturity profile and debt structure have improved as well.

  Jingrui’s FY 2020 results were weaker than we had expected, with lower revenues, weak margins, and higher borrowings. They also contrasted significantly with the H1 results, which had reflected strong y-o-y top-line growth, better margins, and stable debt. Jingrui's credit profile remains weak, having deteriorated further on account of the poor operating results and higher debt.   Contracted sales were flat y-o-y in 2020 and robust in the first two months of 2021. This should translate into a good base for revenue recognition in 2021, given its undelivered portfolio and the increase in bank loans (which could have gone towards supporting construction work). The maturity profile and debt structure have improved as well. 

Jingrui - Earnings Flash - FY 2020 Results - 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-7962'>Redco Properties</a></li><li><a href='#lucror-entity-3537'>Tower Bersama Infrastructure</a></li><li><a href='#lucror-entity-17690'>Tunas Baru Lampung</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.Redco PropertiesTower Bersama InfrastructureTunas Baru Lampung

Morning Views Asia: Redco Properties, Tower Bersama Infrastructure, Tunas Baru Lampung

China

Logan Property Holdings Company Limited is a real estate development company. The Company focuses on residential property projects.

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Logan Property Holdings (3380 HK)

Asia HY Monthly - Chinese Property Update (2021) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Chinese property sector, including operational trends and regulatory...

Lucror Analytics

Morning Views Asia: Fantasia Holdings Group Co, Jingrui Holdings, JSW Steel Ltd

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

Lucror Analytics

Logan Group - Earnings Flash - FY 2020 Results - Lucror Analytics

Logan’s 2020 operating results were in line with our expectations. We remain cautious on the surge in borrowings to support expansion, as well as...

Lucror Analytics

Jingrui - Earnings Flash - FY 2020 Results - Lucror Analytics

Jingrui’s FY 2020 results were weaker than we had expected, with lower revenues, weak margins, and higher borrowings. They also contrasted...

Lucror Analytics

Morning Views Asia: Redco Properties, Tower Bersama Infrastructure, Tunas Baru Lampung

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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