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 Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/tata-motors-ltd' target='_blank' rel='noopener'>Tata Motors Ltd</a></li><li><a href='/entities/anton-oilfield-services-gp' target='_blank' rel='noopener'>Anton Oilfield</a></li><li><a href='/entities/china-south-city-holdings' target='_blank' rel='noopener'>China South City</a></li><li><a href='/entities/panda-green-energy-group-ltd' target='_blank' rel='noopener'>Panda Green</a></li><li><a href='/entities/gcl-new-energy-holdings-ltd' target='_blank' rel='noopener'>Gcl New Energy Holdings</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Tata Motors LtdAnton OilfieldChina South CityPanda GreenGcl New Energy Holdingsand more...

The Asia HY Trade Book for the month of November 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 November 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 - November 2021 - Lucror Analytics

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Latest industry sales volume for wheel loader and excavator still point to a challenging period for <a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a> even the stock trades on inexpensive multiples. We think that the tough industry outlook in the near term will keep its valuation depressed, until there is a better YoY volume comparison after 1Q22. Based on industry figures, wheel loader and excavator sales volume was down by 12.3% and 30.6% YoY in Oct, respectively.Domestic market has experienced more significant pressure, and has underperformed overseas market. Even with a sharp rise in special purpose bond issuance by local governments in 3Q21, it will take time to translate into the end-demand. We still consider Lonking a quality company with solid financial position, but it is too early to jump back in. We also see risk of lowering dividend payout ratio on the back of a weaker result in FY21F.

Latest industry sales volume for wheel loader and excavator still point to a challenging period for Lonking Holdings (3339 HK) even the stock trades on inexpensive multiples. We think that the tough industry outlook in the near term will keep its valuation depressed, until there is a better YoY volume comparison after 1Q22. Based on industry figures, wheel loader and excavator sales volume was down by 12.3% and 30.6% YoY in Oct, respectively.Domestic market has experienced more significant pressure, and has underperformed overseas market. Even with a sharp rise in special purpose bond issuance by local governments in 3Q21, it will take time to translate into the end-demand. We still consider Lonking a quality company with solid financial position, but it is too early to jump back in. We also see risk of lowering dividend payout ratio on the back of a weaker result in FY21F.

China Specialist, Auto and Industrial Specialist

Victoria Li

Thematic (Sector/Industry)

We expect China construction machinery sector sales go down further in 2022E.Demand from infrastructure sector would be limited by reduced financial support from local governments on infrastructure investment. Demand from property sector would remain weak, due to tighten regulation for loans to real estate sector and weakening market demand on new properties.Demand from mining sector would be weak as well, with commodity capacity control policy. Demand from coal mining could go up in the next few months with coal mine restarts but will trend down once coal prices stabilize in line with China's carbon-neutrality strategyAlthough share prices of Zoomlion (1157.HK) and Sany Heavy (600031.CH) have been halved from their highs in 1H2021 and have priced in the down cycle, they would be under pressure with sector fundamental remaining weak in 2022E.

We expect China construction machinery sector sales go down further in 2022E.Demand from infrastructure sector would be limited by reduced financial support from local governments on infrastructure investment. Demand from property sector would remain weak, due to tighten regulation for loans to real estate sector and weakening market demand on new properties.Demand from mining sector would be weak as well, with commodity capacity control policy. Demand from coal mining could go up in the next few months with coal mine restarts but will trend down once coal prices stabilize in line with China's carbon-neutrality strategyAlthough share prices of Zoomlion (1157.HK) and Sany Heavy (600031.CH) have been halved from their highs in 1H2021 and have priced in the down cycle, they would be under pressure with sector fundamental remaining weak in 2022E.

China Construction Machinery Outlook 2022E

China

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

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Zoomlion Heavy Industry S A (000157 CH)

Weekly Wrap - 26 Nov 2021

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

Weekly Wrap - 21 Nov 2021

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

Asia HY Trade Book - November 2021 - Lucror Analytics

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

Lucror Analytics

Lonking (3339 HK): Still Too Early

Weak industry volume for wheel loader and excavator will continue to weigh on Lonking, despite the retreat in share price and low valuations....

Osbert Tang, CFA

China Construction Machinery Outlook 2022E

We expect China construction machinery sector sales go down further in 2022E.Demand from infrastructure sector would be limited

Victoria Li

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