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

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

Credit

The ?H1/19 results from Binhai Investment (BHI) were weaker than expected as the company continued to report margin deterioration, continuing the trend observed since FY 2016. This was due to slower cost pass-through, as well as more lacklustre profitability from users connected under coal-to-gas arrangements during FY 2018. The financial profile deteriorated, with Net Debt/LTM EBITDA at 4.5x (FYE 2018: 3.4x). We expect the company to continue generating negative FCF. Positively, impairment losses on trade receivables were low in H1/19. BHI remains in arbitration proceedings with Tianjin Steel Pipe (which defaulted on its payments to BHI in FY 2017), but it might still have to impair up to HKD 40 mn of receivables from this related party. On a standalone basis. we expect BHI will be able to refinance the USD 300 mn 4.45% Notes due November 2020, albeit at a higher interest cost compared to the existing coupon. This is supported by the company’s high proportion (91%) of unencumbered pipeline assets, decent banking relationships, as well as its moderate leverage. Moreover, the indenture incorporates a letter of support from its SOE parent, TEDA, which provides a small degree of comfort.

   The ?H1/19 results from Binhai Investment (BHI) were weaker than expected as the company continued to report margin deterioration, continuing the trend observed since FY 2016. This was due to slower cost pass-through, as well as more lacklustre profitability from users connected under coal-to-gas arrangements during FY 2018. The financial profile deteriorated, with Net Debt/LTM EBITDA at 4.5x (FYE 2018: 3.4x). We expect the company to continue generating negative FCF.    Positively, impairment losses on trade receivables were low in H1/19. BHI remains in arbitration proceedings with Tianjin Steel Pipe (which defaulted on its payments to BHI in FY 2017), but it might still have to impair up to HKD 40 mn of receivables from this related party.    On a standalone basis. we expect BHI will be able to refinance the USD 300 mn 4.45% Notes due November 2020, albeit at a higher interest cost compared to the existing coupon. This is supported by the company’s high proportion (91%) of unencumbered pipeline assets, decent banking relationships, as well as its moderate leverage. Moreover, the indenture incorporates a letter of support from its SOE parent, TEDA, which provides a small degree of comfort. 

Binhai Investment - Earnings Flash - H1 FY 2019 Results - Lucror Analytics