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

Trung Nguyen

Senior Credit Analyst

Credit

CAR Inc’s Q4 and 2018 results were weak, as operating stats continued to deteriorate, with ?RevPAC also decreasing. Revenue per car declined while the acquisition cost per car rose. We expect the growth in fleet size to moderate in 2019, anticipating a substantial increase in disposals as the existing fleet ages and offsets vehicle additions. Vehicles added in 2019 will likely be fewer than the 45 k added in 2017 and 2018, due to the large capex entailed (CNY 4.5 bn and CNY 5.1 bn respectively), which resulted in large negative FCF. The new fleet capacity taken on in 2018 should gain traction and generate more cash flows in 2019. However, we still expect CAR Inc's credit profile to deteriorate slightly at FYE 2019, as we anticipate high capex, funded by debt, to grow the fleet size. We remain concerned about the deterioration in CAR Inc's business fundamentals, especially compared to closest competitor eHi Car Services. We are also concerned over management's poor capital allocation. The company continues to invest in non-core businesses (e.g. UCAR and electric-vehicle manufacturers) and make share buybacks, albeit slowing down (CNY 1.24 bn in 2017, CNY 0.2 bn in 2018), while borrowing more to fund the capital-intensive core business. Our fundamental Credit Bias remains “Negative”, as we expect further operational deterioration, misalignment of interests (share buybacks and adverse related-party transactions) and poor capital allocation. We revise our LARA to "High Risk" from "Medium Risk", seeing no end to the current deteriorating trend. We maintain "Not Recommended" on the bonds, due to the expected decline in profitability and the financial risk profile, as CAR is focused on maintaining its leadership position rather than profitability.

   CAR Inc’s Q4 and 2018 results were weak, as operating stats continued to deteriorate, with ?RevPAC also decreasing. Revenue per car declined while the acquisition cost per car rose.    We expect the growth in fleet size to moderate in 2019, anticipating a substantial increase in disposals as the existing fleet ages and offsets vehicle additions. Vehicles added in 2019 will likely be fewer than the 45 k added in 2017 and 2018, due to the large capex entailed (CNY 4.5 bn and CNY 5.1 bn respectively), which resulted in large negative FCF.    The new fleet capacity taken on in 2018 should gain traction and generate more cash flows in 2019. However, we still expect CAR Inc's credit profile to deteriorate slightly at FYE 2019, as we anticipate high capex, funded by debt, to grow the fleet size.    We remain concerned about the deterioration in CAR Inc's business fundamentals, especially compared to closest competitor eHi Car Services. We are also concerned over management's poor capital allocation. The company continues to invest in non-core businesses (e.g. UCAR and electric-vehicle manufacturers) and make share buybacks, albeit slowing down (CNY 1.24 bn in 2017, CNY 0.2 bn in 2018), while borrowing more to fund the capital-intensive core business.    Our fundamental Credit Bias remains “Negative”, as we expect further operational deterioration, misalignment of interests (share buybacks and adverse related-party transactions) and poor capital allocation. We revise our LARA to "High Risk" from "Medium Risk", seeing no end to the current deteriorating trend.    We maintain "Not Recommended" on the bonds, due to the expected decline in profitability and the financial risk profile, as CAR is focused on maintaining its leadership position rather than profitability. 

CAR Inc - Earnings Flash - FY 2018 Results - Lucror Analytics

Car Inc

CAR Inc - Earnings Flash - FY 2018 Results - Lucror Analytics