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 consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.  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 consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.    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 - China's Three Red Lines - 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 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 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

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

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Corrigenda: There is an error in this Insight. Please note the correction.
Correction: The <a href="https://www.smartkarma.com/insights/singapore-sti-macro-bear-pressure-mounting-with-tactical-relief-from-2-400" target="_blank" data-smartkarma-citation="insights:42932" rel="noopener">Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400</a> Insight is improperly attributed to Thomas Monaco. That Insight was published by <a href="https://www.smartkarma.com/profiles/thomas-schroeder" target="_blank" data-smartkarma-citation="accounts:381" rel="noopener">Thomas Schroeder</a>.
</div>
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The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma.</a>
</div>
<h3>Equity Bottom-Up Insights</h3>
In <a href="https://www.smartkarma.com/insights/kalbe-farma-klbf-ij-a-nutritional-spin-off" target="_blank" data-smartkarma-citation="insights:42533" rel="noopener">Kalbe Farma (KLBF IJ) - A Nutritional Spin-Off?,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits South East Asia's largest pharmaceutical company in light of news that the company is considering spinning off its Nutritionals division to raise around US$500m. 
In <a href="https://www.smartkarma.com/insights/link-net-tbk-pt-link-ij-summer-migration-at-last" target="_blank" data-smartkarma-citation="insights:42829" rel="noopener">Link Net Tbk Pt (LINK IJ) - Summer Migration at Last,</a> <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits Indonesia's highest quality high-speed broadband provider following a call with managment, which focused on its recent results, as well as the decision to build its own pole infrastructure to carry its fibre.  
In <a href="https://www.smartkarma.com/insights/singtel-make-the-call" target="_blank" data-smartkarma-citation="insights:42900" rel="noopener">SingTel: Make The Call,</a> <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> zeros in on Singapore's leading telecom provider and finds deep value appearing in the stock.
In <a href="https://www.smartkarma.com/insights/scg-packaging-ipo-initiation-shrink-wrapping" target="_blank" data-smartkarma-citation="insights:42967" rel="noopener">SCG Packaging IPO Initiation: Shrink Wrapping,</a> <a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" data-smartkarma-citation="accounts:1680" rel="noopener">Arun George</a> takes a first look at the upcoming spin-off from <a href="https://www.smartkarma.com/entities/siam-cement-pcl-the" target="_blank" data-smartkarma-citation="entities:2589:1" rel="noopener">Siam Cement (SCC TB)</a> and IPO of SCG Packaging, which will get a lot of investor focus given ist size and share in of the packaging market in SE Asia. 
In <a href="https://www.smartkarma.com/insights/sembcorp-last-chance-before" target="_blank" data-smartkarma-citation="insights:42886" rel="noopener">Sembcorp - Last Chance Before...</a> <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> looks at the enormously dilutive rights issue and de-merger of Semcorp Marine. 
 In <a href="https://www.smartkarma.com/insights/singapore-sti-macro-bear-pressure-mounting-with-tactical-relief-from-2-400" target="_blank" data-smartkarma-citation="insights:42932" rel="noopener">Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400,</a> technical analysis specialist <a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" data-smartkarma-citation="accounts:1716" rel="noopener">Thomas J. Monaco</a> works his technical magic on the <a href="https://www.smartkarma.com/entities/ftse-straits-times-index-sti" target="_blank" data-smartkarma-citation="entities:22902:1" rel="noopener">FTSE Straits Times Index (STI) (STI INDEX).</a>
In <a href="https://www.smartkarma.com/insights/ratch-3q20-earnings-to-improve-from-overseas-performance" target="_blank" data-smartkarma-citation="insights:42789" rel="noopener">RATCH: 3Q20 Earnings to Improve from Overseas Performance</a>, our friend at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> report back on <a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratchaburi Electric (RATCH TB)</a> post its more recent analyst meeting, which left a positive impression.  
In <a href="https://www.smartkarma.com/insights/b-work-good-dividend-yield-makes-an-attractive-investment" target="_blank" data-smartkarma-citation="insights:42782" rel="noopener">B-WORK: Good Dividend Yield Makes an Attractive Investment,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/bualuang-office-leasehold-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:26187:1" rel="noopener">Bualuang Office Leasehold Real Estate Investment Trust (B-WORK TB)</a> and takes a positive view. 
In <a href="https://www.smartkarma.com/insights/rbf-the-excessive-outperformance-may-come-to-a-halt" target="_blank" data-smartkarma-citation="insights:42788" rel="noopener">RBF: The Excessive Outperformance May Come to a Halt,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> upgrades his recommendation on <a href="https://www.smartkarma.com/entities/r-b-food-supply-pcl" target="_blank" data-smartkarma-citation="entities:28949:1" rel="noopener">R&amp;B Food Supply PCL (RBF TB)</a> to HOLD from SELL based on raising his target price of THB9.25 from THB8.70, implying a downside of 9% from the current price. 
In <a href="https://www.smartkarma.com/insights/sti-acquisition-benefits-are-not-fully-priced-in-strong-buy" target="_blank" data-smartkarma-citation="insights:42785" rel="noopener">STI: Acquisition Benefits Are Not Fully Priced In, Strong BUY,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/stonehenge-inter-pcl" target="_blank" data-smartkarma-citation="entities:27353:1" rel="noopener">Stonehenge Inter (STI TB)</a> with a BUY recommendation based on his target of THB10.10, implying an upside of 31% from the current share price. 
In <a href="https://www.smartkarma.com/insights/dod-strong-performance-deserves-a-re-rating" target="_blank" data-smartkarma-citation="insights:42676" rel="noopener">DOD: Strong Performance Deserves a Re-Rating,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> upgrades his recommendation on <a href="https://www.smartkarma.com/entities/dod-biotech-pcl" target="_blank" data-smartkarma-citation="entities:26179:1" rel="noopener">DOD Biotech PCL (DOD TB)</a> to BUY from HOLD based on raising his target price to Bt10.70 from Bt7.55, implying an upside of 26% from the current price. 
In <a href="https://www.smartkarma.com/insights/vranda-the-calm-before-challenging-times" target="_blank" data-smartkarma-citation="insights:42781" rel="noopener">VRANDA: The Calm Before Challenging Times,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> has a SELL recommendation on <a href="https://www.smartkarma.com/entities/veranda-resort-pcl" target="_blank" data-smartkarma-citation="entities:29176:1" rel="noopener">Veranda Resort PCL (VRANDA TB)</a> based on a target price of THB4.30, implying a downside of 26% from the current share price. 
In <a href="https://www.smartkarma.com/insights/ace-results-are-not-stunning-stay-on-hold" target="_blank" data-smartkarma-citation="insights:42784" rel="noopener">ACE: Results Are Not Stunning, Stay on HOLD,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> upgrades his recommendation on <a href="https://www.smartkarma.com/entities/absolute-clean-energy-pcl" target="_blank" data-smartkarma-citation="entities:29155:1" rel="noopener">Absolute Clean Energy PCL (ACE TB)</a> to HOLD from SELL based on raising his target price to THB3.49 from THB2.64, implying an upside of 8% from the current price. 
In <a href="https://www.smartkarma.com/insights/spa-weak-demand-continues-to-pressure-2h20-earnings" target="_blank" data-smartkarma-citation="insights:42813" rel="noopener">SPA: Weak Demand Continues to Pressure 2H20 Earnings,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> downgrades <a href="https://www.smartkarma.com/entities/siam-wellness-group-pcl" target="_blank" data-smartkarma-citation="entities:3765:1" rel="noopener">Siam Wellness Group (SPA TB)</a> from BUY to HOLD rating and cut his target price by 31% to THB6.6 to factor in weakening earnings momentum in 2H20. 
In <a href="https://www.smartkarma.com/insights/gunkul-new-60mw-power-plant-to-drive-2h20-earnings" target="_blank" data-smartkarma-citation="insights:42820" rel="noopener">GUNKUL: New 60MW Power Plant to Drive 2H20 Earnings,</a> <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> maintain a BUY rating on <a href="https://www.smartkarma.com/entities/gunkul-engineering-pcl" target="_blank" data-smartkarma-citation="entities:15272:1" rel="noopener">Gunkul Engineering (GUNKUL TB)</a> with a target price of THB3.24 derived using DCF method (WACC 7.8% and TG 1%) implying 11.4x FY20E PER or 0.5x relative PER to Thai utility sector. 
<h3>Sector and Thematic Insights</h3>
In <a href="https://www.smartkarma.com/insights/telecom-review-sept-2020-ais-and-asiasoft-get-aggressive-on-gaming" target="_blank" data-smartkarma-citation="insights:41022" rel="noopener">Telecom Review (Sept 2020): AIS and AsiaSoft Get Aggressive on Gaming,</a> our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> takes a look at gaming, specifically related to <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl" target="_blank" data-smartkarma-citation="entities:947:1" rel="noopener">Advanced Info Service (ADVANC TB)</a> and <a href="https://www.smartkarma.com/entities/asiasoft-corp-pcl" target="_blank" data-smartkarma-citation="entities:5429:1" rel="noopener">Asiasoft Corp (AS TB)</a> in Thailand.


Corrigenda: There is an error in this Insight. Please note the correction.
Correction: The Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400 Insight is improperly attributed to Thomas Monaco. That Insight was published by Thomas Schroeder.



The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in ASEAN@Smartkarma.

Equity Bottom-Up Insights
In Kalbe Farma (KLBF IJ) - A Nutritional Spin-Off?, CrossASEAN Insight Provider Angus Mackintosh revisits South East Asia's largest pharmaceutical company in light of news that the company is considering spinning off its Nutritionals division to raise around US$500m. 
In Link Net Tbk Pt (LINK IJ) - Summer Migration at Last, Angus Mackintosh revisits Indonesia's highest quality high-speed broadband provider following a call with managment, which focused on its recent results, as well as the decision to build its own pole infrastructure to carry its fibre.  
In SingTel: Make The Call, David Blennerhassett zeros in on Singapore's leading telecom provider and finds deep value appearing in the stock.
In SCG Packaging IPO Initiation: Shrink Wrapping, Arun George takes a first look at the upcoming spin-off from Siam Cement (SCC TB) and IPO of SCG Packaging, which will get a lot of investor focus given ist size and share in of the packaging market in SE Asia. 
In Sembcorp - Last Chance Before... Travis Lundy looks at the enormously dilutive rights issue and de-merger of Semcorp Marine. 
 In Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400, technical analysis specialist Thomas J. Monaco works his technical magic on the FTSE Straits Times Index (STI) (STI INDEX).
In RATCH: 3Q20 Earnings to Improve from Overseas Performance, our friend at Country Group report back on Ratchaburi Electric (RATCH TB) post its more recent analyst meeting, which left a positive impression.  
In B-WORK: Good Dividend Yield Makes an Attractive Investment, Dr. Andrew Stotz, CFA revisits Bualuang Office Leasehold Real Estate Investment Trust (B-WORK TB) and takes a positive view. 
In RBF: The Excessive Outperformance May Come to a Halt, Dr. Andrew Stotz, CFA upgrades his recommendation on R&amp;B Food Supply PCL (RBF TB) to HOLD from SELL based on raising his target price of THB9.25 from THB8.70, implying a downside of 9% from the current price. 
In STI: Acquisition Benefits Are Not Fully Priced In, Strong BUY, Dr. Andrew Stotz, CFA revisits Stonehenge Inter (STI TB) with a BUY recommendation based on his target of THB10.10, implying an upside of 31% from the current share price. 
In DOD: Strong Performance Deserves a Re-Rating, Dr. Andrew Stotz, CFA upgrades his recommendation on DOD Biotech PCL (DOD TB) to BUY from HOLD based on raising his target price to Bt10.70 from Bt7.55, implying an upside of 26% from the current price. 
In VRANDA: The Calm Before Challenging Times, Dr. Andrew Stotz, CFA has a SELL recommendation on Veranda Resort PCL (VRANDA TB) based on a target price of THB4.30, implying a downside of 26% from the current share price. 
In ACE: Results Are Not Stunning, Stay on HOLD, Dr. Andrew Stotz, CFA upgrades his recommendation on Absolute Clean Energy PCL (ACE TB) to HOLD from SELL based on raising his target price to THB3.49 from THB2.64, implying an upside of 8% from the current price. 
In SPA: Weak Demand Continues to Pressure 2H20 Earnings, Dr. Andrew Stotz, CFA downgrades Siam Wellness Group (SPA TB) from BUY to HOLD rating and cut his target price by 31% to THB6.6 to factor in weakening earnings momentum in 2H20. 
In GUNKUL: New 60MW Power Plant to Drive 2H20 Earnings, Country Group maintain a BUY rating on Gunkul Engineering (GUNKUL TB) with a target price of THB3.24 derived using DCF method (WACC 7.8% and TG 1%) implying 11.4x FY20E PER or 0.5x relative PER to Thai utility sector. 
Sector and Thematic Insights
In Telecom Review (Sept 2020): AIS and AsiaSoft Get Aggressive on Gaming, our Thai guru Athaporn Arayasantiparb, CFA takes a look at gaming, specifically related to Advanced Info Service (ADVANC TB) and Asiasoft Corp (AS TB) in Thailand. 

The Week that Was in ASEAN@Smartkama - Kalbe Spin-Off, SingTel's Deep Value, and Thailand's Gamers

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the impact of the ongoing COVID-19 crisis, regulatory and accounting developments, and the macro outlook. We also comment broadly on the H1/20 results of the Indonesian real estate players under our 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 Indonesian real estate sector, including the impact of the ongoing COVID-19 crisis, regulatory and accounting developments, and the macro outlook. We also comment broadly on the H1/20 results of the Indonesian real estate players under our 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 - Indonesian Property Update (2020) - 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-20744'>361 Degrees International</a></li><li><a href='#lucror-entity-20844'>Medco Energi</a></li><li><a href='#lucror-entity-4160'>NagaCorp Ltd</a></li><li><a href='#lucror-entity-12463'>China Times Publishing Co</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.361 Degrees InternationalMedco EnergiNagaCorp LtdChina Times Publishing Co

Morning Views Asia: 361 Degrees International, Medco Energi, NagaCorp Ltd, China Times Publishing Co

Indonesia

PT Medco Energi Internasional Tbk is an integrated energy company. The Company explores for and produces oil and gas both in Indonesia and internationally, operates gas-fired power plants in Panaran I, Batam Island, and develops renewable fuels such as Bio-fuel.

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Medco Energi (MEDC IJ)

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a...

Lucror Analytics

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

The Week that Was in ASEAN@Smartkama - Kalbe Spin-Off, SingTel's Deep Value, and Thailand's Gamers

The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South...

Angus Mackintosh

Asia HY Monthly - Indonesian Property Update (2020) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the impact of the ongoing COVID-19...

Lucror Analytics

Morning Views Asia: 361 Degrees International, Medco Energi, NagaCorp Ltd, China Times Publishing Co

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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