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

Central China Real Estate’s (CCRE) H1/21 results were significantly weaker than expected, owing to the gross margin contraction, weakened leverage and reduced cash collections. We anticipate continued deterioration in the gross margin over the next 1-2 years, owing to rising land costs and marketing discounts. Leverage rose due to an uptick in land-acquisition spending, albeit management has indicated that this might slow in H2. We are becoming increasingly concerned about CCRE’s weak corporate governance, including Chairman Wu Po Sum’s willingness to balance the interests of debt and equity holders. The aggressive H1/21 interim dividend comes on the back of CCRE’s spin-off of the profitable Central China Management to shareholders in May (at the expense of bondholders). As a result of the spin-off, CCRE breached another of the Three Red Lines, with its Net Debt/Equity rising above 100%. We also view negatively the repeated provision of financial guarantees to, as well as increasing related-party transactions with, entities owned by the Chairman. We maintain our recommendation to “Buy” the short-dated ‘22s and ‘23s, while moving to “Hold” on the rest of the curve.

  Central China Real Estate’s (CCRE) H1/21 results were significantly weaker than expected, owing to the gross margin contraction, weakened leverage and reduced cash collections. We anticipate continued deterioration in the gross margin over the next 1-2 years, owing to rising land costs and marketing discounts. Leverage rose due to an uptick in land-acquisition spending, albeit management has indicated that this might slow in H2.   We are becoming increasingly concerned about CCRE’s weak corporate governance, including Chairman Wu Po Sum’s willingness to balance the interests of debt and equity holders. The aggressive H1/21 interim dividend comes on the back of CCRE’s spin-off of the profitable Central China Management to shareholders in May (at the expense of bondholders). As a result of the spin-off, CCRE breached another of the Three Red Lines, with its Net Debt/Equity rising above 100%. We also view negatively the repeated provision of financial guarantees to, as well as increasing related-party transactions with, entities owned by the Chairman.   We maintain our recommendation to “Buy” the short-dated ‘22s and ‘23s, while moving to “Hold” on the rest of the curve. 

Central China - Earnings Flash - H1 FY 2021 Results - Lucror Analytics