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

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

China Specialist, Auto and Industrial Specialist

Victoria Li

Equity Bottom-Up

Zoomlion Heavy Industry H / Equity Bottom-Up

We expect sales growths of late cycle products in construction machinery remain robust this year. 2021E sales growth of excavator (the main early cycle product) might beat market expectation and be as strong as 2020 levels, vs. market expected 10% yoy. In March, China's excavator sales grew by 60% yoy to 79,035 units, much stronger than market expected.Zoomlion, as the leading manufacturer with dominant market shares of late cycle products, would benefit from strong market demand on concrete machines and cranes in domestic market and further market expanding in One Belt One Road regions. In excavator segment, Zoomlion is gaining market share quickly. All the above would secure the company's earnings grow solid in 2021-2022E.Zoomlion's valuation remains attractive. Currently local brokers' average expected EPS of 2021E stands at Rmb1.1, indicating 8.9x P/E 20201E, lower than its historical average. Also, better than expected excavator market demand and Zoomlion's market share gain bring earnings upside potential.

We expect sales growths of late cycle products in construction machinery remain robust this year. 2021E sales growth of excavator (the main early cycle product) might beat market expectation and be as strong as 2020 levels, vs. market expected 10% yoy. In March, China's excavator sales grew by 60% yoy to 79,035 units, much stronger than market expected.Zoomlion, as the leading manufacturer with dominant market shares of late cycle products, would benefit from strong market demand on concrete machines and cranes in domestic market and further market expanding in One Belt One Road regions. In excavator segment, Zoomlion is gaining market share quickly. All the above would secure the company's earnings grow solid in 2021-2022E.Zoomlion's valuation remains attractive. Currently local brokers' average expected EPS of 2021E stands at Rmb1.1, indicating 8.9x P/E 20201E, lower than its historical average. Also, better than expected excavator market demand and Zoomlion's market share gain bring earnings upside potential. 

Zoomlion (1157.HK): Buy on Flow Through of Construction Strength into Late Cycle Products

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

HK/China Equity Long-Short

Osbert Tang, CFA

Demand for construction machinery stayed very resilient in Mar, with 60% YoY growth for industry excavator sales and 53% growth for wheel loader. These figures concluded an extremely solid 1Q21 in the history of the industry, as sales was up 85% and 60.7% for the quarter. We believe <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> is a direct beneficiary of the good momentum.Initial figures from Lonking suggested that the company is tracking closely the industry sales for excavator but outperformed on wheel loader sales significantly in 1Q21. This reversed the trend of underperformance in last year, and the market should take this positively. In our view, at 5.3x PER, 1.1x P/B and 11.3% dividend yield for FY21, together with an ROE of 21.5% and net cash of HK$0.90/share, who can afford not to take a look on Lonking?

Demand for construction machinery stayed very resilient in Mar, with 60% YoY growth for industry excavator sales and 53% growth for wheel loader. These figures concluded an extremely solid 1Q21 in the history of the industry, as sales was up 85% and 60.7% for the quarter. We believe Lonking Holdings (3339 HK) is a direct beneficiary of the good momentum.Initial figures from Lonking suggested that the company is tracking closely the industry sales for excavator but outperformed on wheel loader sales significantly in 1Q21. This reversed the trend of underperformance in last year, and the market should take this positively. In our view, at 5.3x PER, 1.1x P/B and 11.3% dividend yield for FY21, together with an ROE of 21.5% and net cash of HK$0.90/share, who can afford not to take a look on Lonking?

Lonking (3339 HK): 1Q21 Industry Figures Blown Through the Roof

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-14882'>Seazen (Formerly Future Land)</a></li><li><a href='#lucror-entity-18067'>Yestar Healthcare Holdings</a></li><li><a href='#lucror-entity-7817'>Zoomlion Heavy Industry H</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.Seazen (Formerly Future Land)Yestar Healthcare HoldingsZoomlion Heavy Industry H

Morning Views Asia: Seazen (Formerly Future Land), Yestar Healthcare Holdings

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)

Asia HY Trade Book - April 2021 - Lucror Analytics

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

Lucror Analytics

Zoomlion (1157.HK): Buy on Flow Through of Construction Strength into Late Cycle Products

We expect sales growths of late cycle products in construction machinery remain robust this year. 2021E sales growth of excavator might beat market...

Victoria Li

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

Lonking (3339 HK): 1Q21 Industry Figures Blown Through the Roof

While industry construction machinery sales are strong, the more important message is that Lonking has been tracking well against the figures and...

Osbert Tang, CFA

Morning Views Asia: Seazen (Formerly Future Land), Yestar Healthcare Holdings

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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