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.

High Yield Experts

Credit Analyst, Lucror Analytics

Chuanyi Zhou

Credit Analyst

Credit

We view 361 Degrees as “High Risk” on the LARA scale. The company has maintained its market position in recent years, resulting in seemingly healthy profit margins and cash flow. Management negotiated the 2012-2013 industry downturn well, and maintained the margins thereafter. The industry outlook is encouraging, given the sustained growth in disposable income in China. That said, 361’s small scale and market share are concerns, especially in an industry where consumer brand recognition is strongest for global names such as Adidas, Nike and Puma. Moreover, industry players could intensify price competition to gain market share. Our fundamental Credit Bias on 361 is "Negative", given its unusually large cash balance. The company chose to issue USD Notes in 2016, despite apparently having significant cash on hand. We are sceptical about the credibility of its financial information. Our key concerns include: [1] seemingly high operating margins that are better than those of industry leaders, particularly given its mass-market focus and low prices; [2] low inventory levels with high prepayments, which could be a sign of round-tripping; and [3] an excessive cash position that generates very little interest income. We view 361 as “Inadequate” on the LAGA scale. One major negative is that the company is controlled by two families that hold over 70% of its shares. We are concerned about the veracity of its financial statements, and that the independent directors may be ineffective.

   We view 361 Degrees as “High Risk” on the LARA scale. The company has maintained its market position in recent years, resulting in seemingly healthy profit margins and cash flow. Management negotiated the 2012-2013 industry downturn well, and maintained the margins thereafter. The industry outlook is encouraging, given the sustained growth in disposable income in China. That said, 361’s small scale and market share are concerns, especially in an industry where consumer brand recognition is strongest for global names such as Adidas, Nike and Puma. Moreover, industry players could intensify price competition to gain market share.    Our fundamental Credit Bias on 361 is "Negative", given its unusually large cash balance. The company chose to issue USD Notes in 2016, despite apparently having significant cash on hand. We are sceptical about the credibility of its financial information. Our key concerns include: [1] seemingly high operating margins that are better than those of industry leaders, particularly given its mass-market focus and low prices; [2] low inventory levels with high prepayments, which could be a sign of round-tripping; and [3] an excessive cash position that generates very little interest income.    We view 361 as “Inadequate” on the LAGA scale. One major negative is that the company is controlled by two families that hold over 70% of its shares. We are concerned about the veracity of its financial statements, and that the independent directors may be ineffective. 

361 Degrees - Tear Sheet - Lucror Analytics

361 Degrees International

361 Degrees - Tear Sheet - Lucror Analytics