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

We view Central China as “Medium Risk” on the LARA scale. The company’s projects are geographically concentrated in Henan, China's third-most populous province. Although this exposes Central China to policy and political changes within the province, we believe the risks are partly mitigated by the company's deep market knowledge, brand recognition and established relationships with the local government and construction companies. We note that Central China maintains a high cash balance, which underpins its liquidity position. That said, the extensive use of JVs has led to lower transparency, and the company has provided substantial guarantees to debt held at the JVs. Our fundamental Credit Bias is “Stable”, supported by the robust sales growth. These should translate into higher revenue recognition and cash collection going forward. Although the company has increased its expansion pace, we believe the risks can be mitigated by its good execution track record, supported by the company's leading brand name and market position in Henan.  We view Central China as “Weak” on the LAGA scale. This takes into account: [1] the high degree of control exerted by founder and Chairman Wu Po Sum, who controls a 75% stake; [2] the presence of Mr Wu’s daughter as a NED on the Board; [3] bond covenant breaches in 2011; and [4] small but ongoing related-party transactions. That said, we deem the company's disclosures as slightly better compared to Hong Kong-listed peers.  We move our recommendation on the CENCHI curve to "Buy" from "Hold" on a relative value basis.

  We view Central China as “Medium Risk” on the LARA scale. The company’s projects are geographically concentrated in Henan, China's third-most populous province. Although this exposes Central China to policy and political changes within the province, we believe the risks are partly mitigated by the company's deep market knowledge, brand recognition and established relationships with the local government and construction companies. We note that Central China maintains a high cash balance, which underpins its liquidity position. That said, the extensive use of JVs has led to lower transparency, and the company has provided substantial guarantees to debt held at the JVs.   Our fundamental Credit Bias is “Stable”, supported by the robust sales growth. These should translate into higher revenue recognition and cash collection going forward. Although the company has increased its expansion pace, we believe the risks can be mitigated by its good execution track record, supported by the company's leading brand name and market position in Henan.    We view Central China as “Weak” on the LAGA scale. This takes into account: [1] the high degree of control exerted by founder and Chairman Wu Po Sum, who controls a 75% stake; [2] the presence of Mr Wu’s daughter as a NED on the Board; [3] bond covenant breaches in 2011; and [4] small but ongoing related-party transactions. That said, we deem the company's disclosures as slightly better compared to Hong Kong-listed peers.    We move our recommendation on the CENCHI curve to "Buy" from "Hold" on a relative value basis. 

Central China - Tear Sheet - Lucror Analytics

Central China Real Estate

Central China - Tear Sheet - Lucror Analytics