Daily Brief Credit: Morning Views Asia: China Hongqiao and more

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.

• China Hongqiao
• Continuum Green Energy

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:

1. Biocon Ltd
2. Yankuang Energy Group
3. Wynn Macau Ltd
4. Rakuten
5. China Jinmao Holdings

and more…

The Asia Trade Book for September 2024 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 across Asia HY and crossover credits.

Please reach out to our analysts to discuss any of these ideas, or other trade recommendations from our Asia coverage.

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:

1. Vedanta Resources
2. Meituan
3. Yankuang Energy Group
4. Genting Bhd
5. Delhi International Airport Limited

and more…

New World Development’s (NWD) FY 2023-24 results were weak, but in line with expectations as flagged by the company’s profit warning earlier in September. We expect the company’s revenue and EBITDA to improve in FY 2024-25, supported by new project launches in Hong Kong as well as contributions from new K11 commercial assets in Hong Kong and Mainland China.

While NWD has continued to reduce net debt, leverage weakened on account of the weaker earnings and smaller asset base (due to disposals). Cash/ST Debt is inadequate, though we believe the company’s liquidity is manageable due to its continued access to financing. In particular, we note positively NWD’s receipt of a HKD 1 bn unsecured loan, as well as its ability to tap the USD bond market in August 2024.

The resignation of Adrian Cheng as NWD’s CEO (as well as from the Boards of NWD’s sister companies) is surprising in our view, though we believe the impact is credit neutral.

We move to “Buy” from “Hold” on the NWDEVL notes, as we view the yields as attractive.

The Europe HY Trade Book for September 2024 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

In our latest Asia Monthly, we discuss the performance of major Asian credit indices and review UST curve movements in August 2024. We also provide a recap of major news and macroeconomic releases, including those from the US, China, India, Indonesia and Japan.

In addition, we summarise the Top/Bottom performers, recent USD bond issuances and rating actions in Asian corporate credit, as well as a list of our recent research. The Asia Monthly publication serves to keep investors updated on developments in the Asian corporate USD bond market.

New World Development’s (NWD) FY 2023-24 results were weak, but in line with expectations as flagged by the company’s profit warning earlier in September. We expect the company’s revenue and EBITDA to improve in FY 2024-25, supported by new project launches in Hong Kong as well as contributions from new K11 commercial assets in Hong Kong and Mainland China.

While NWD has continued to reduce net debt, leverage weakened on account of the weaker earnings and smaller asset base (due to disposals). Cash/ST Debt is inadequate, though we believe the company’s liquidity is manageable due to its continued access to financing. In particular, we note positively NWD’s receipt of a HKD 1 bn unsecured loan, as well as its ability to tap the USD bond market in August 2024.

The resignation of Adrian Cheng as NWD’s CEO (as well as from the Boards of NWD’s sister companies) is surprising in our view, though we believe the impact is credit neutral.

We move to “Buy” from “Hold” on the NWDEVL notes, as we view the yields as attractive.