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 August, geopolitical risks increased. The escalation in the trade war and events in Argentina and Turkey were on emerging-market investors’ minds, leading to heightened risk aversion. On September 1st, the US placed tariffs on an additional USD 100 bn worth of Chinese goods, after which Beijing retaliated with imposts on USD 75 bn of US goods. In summary, the US now has tariffs on roughly USD 550 bn in Chinese imports, while China has duties on about USD 110 bn of its USD 120 bn in imports from the US.
In late August, President Donald Trump threatened to force American companies to exit China pursuant to the International Emergency Economic Powers Act (IEEPA), which he can trigger by declaring a national emergency. The effect would be to freeze Chinese assets in the US and to exclude Chinese institutions from the US financial system.

In August, geopolitical risks increased. The escalation in the trade war and events in Argentina and Turkey were on emerging-market investors’ minds, leading to heightened risk aversion. On September 1st, the US placed tariffs on an additional USD 100 bn worth of Chinese goods, after which Beijing retaliated with imposts on USD 75 bn of US goods. In summary, the US now has tariffs on roughly USD 550 bn in Chinese imports, while China has duties on about USD 110 bn of its USD 120 bn in imports from the US.
In late August, President Donald Trump threatened to force American companies to exit China pursuant to the International Emergency Economic Powers Act (IEEPA), which he can trigger by declaring a national emergency. The effect would be to freeze Chinese assets in the US and to exclude Chinese institutions from the US financial system.

Asia HY Monthly – Chinese Property Update (August 2019)

Credit Analyst, Lucror Analytics

Chuanyi Zhou

Credit Analyst

Yuzhou Properties’ H1/19 results were weaker than expected, despite the top-line growth. The improvement in contracted sales was good, but revenue growth appears slow given the strong contracted sales in previous years. Moreover, the company did not seem to slow down its rapid pace of expansion, which has been putting pressure on leverage. Yuzhou continues to take on more borrowings with higher financing cost. Margins have been declining, especially with the land cost increasing. Credit metrics weakened, as the mild top-line increase could not fully offset the increase in borrowings and financing costs. We are mainly concerned about the company’s aggressive debt-funded expansion. Moreover, about half of its debt is denominated in the USD or HKD and will likely be vulnerable to a devaluation of the CNY.

   Yuzhou Properties’ H1/19 results were weaker than expected, despite the top-line growth. The improvement in contracted sales was good, but revenue growth appears slow given the strong contracted sales in previous years. Moreover, the company did not seem to slow down its rapid pace of expansion, which has been putting pressure on leverage. Yuzhou continues to take on more borrowings with higher financing cost. Margins have been declining, especially with the land cost increasing.    Credit metrics weakened, as the mild top-line increase could not fully offset the increase in borrowings and financing costs. We are mainly concerned about the company’s aggressive debt-funded expansion. Moreover, about half of its debt is denominated in the USD or HKD and will likely be vulnerable to a devaluation of the CNY. 

Yuzhou Properties - Earnings Flash - H1 FY 2019 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.

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 - 28 Aug 2019

The Asia HY Trade Recommendations report for August includes a summary of our recommendations, as well as our high-conviction ideas. We also provide relative-value charts and lists of the bonds in the Lucror Asia HY index.

   The Asia HY Trade Recommendations report for August includes a summary of our recommendations, as well as our high-conviction ideas. We also provide relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Recommendations - August 2019 - Lucror Analytics

Lucror Analytics - Morning Views Asia - 12 Aug 2019

China

Yuzhou Group Holdings Company Limited develops residential properties in southern China.

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Yuzhou Group (1628 HK)

Asia HY Monthly – Chinese Property Update (August 2019)

In August, geopolitical risks increased. The escalation in the trade war and events in Argentina and Turkey were on emerging-market investors’...

Lucror Analytics

Yuzhou Properties - Earnings Flash - H1 FY 2019 Results - Lucror Analytics

Yuzhou Properties’ H1/19 results were weaker than expected, despite the top-line growth. The improvement in contracted sales was good, but...

Lucror Analytics

Lucror Analytics - Morning Views Asia - 28 Aug 2019

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 Recommendations - August 2019 - Lucror Analytics

The Asia HY Trade Recommendations report for August includes a summary of our recommendations, as well as our high-conviction ideas. We also...

Lucror Analytics

Lucror Analytics - Morning Views Asia - 12 Aug 2019

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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