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

In our view, CAP’s Q1/19 results were very weak but in line with expectations, considering the lower petrochemical product prices. In our FY 2018 Earnings Flash, we had forecast that “FY 2019 [would] be weaker than the prior year, and probably in line with Q4/18.” Positively, the EBITDA margin seems to be stabilising, with no q-o-q deterioration. The financial risk profile weakened significantly, but the balance sheet remained strong on account of CAP's large cash position and acceptable leverage and interest coverage ratios. For the rest of FY 2019, we expect the EBITDA margin to remain around 11-12%, consistent with management’s downcycle forecast (it had guided for 10-20% trough-peak margins). We revise our revenue forecast downwards and our margin projection upwards, to reflect respectively the drop in petrochemical prices and the stabilisation in spreads. We expect credit metrics will worsen while remaining healthy. We anticipate Debt/EBITDA of 2-2.5x, which is still decent on an absolute basis and in consideration of the cycle. Our fundamental Credit Bias on CAP remains “Stable”, as the strength of the company's balance sheet more than outweighs its large capex plan and the ongoing weakness in petrochemical margins. We maintain our "Hold" recommendation on the TPIAIJ '24s, which seem to be fairly valued relative to other Indonesian BB industrial names.  .

   In our view, CAP’s Q1/19 results were very weak but in line with expectations, considering the lower petrochemical product prices. In our FY 2018 Earnings Flash, we had forecast that “FY 2019 [would] be weaker than the prior year, and probably in line with Q4/18.” Positively, the EBITDA margin seems to be stabilising, with no q-o-q deterioration. The financial risk profile weakened significantly, but the balance sheet remained strong on account of CAP's large cash position and acceptable leverage and interest coverage ratios.    For the rest of FY 2019, we expect the EBITDA margin to remain around 11-12%, consistent with management’s downcycle forecast (it had guided for 10-20% trough-peak margins). We revise our revenue forecast downwards and our margin projection upwards, to reflect respectively the drop in petrochemical prices and the stabilisation in spreads. We expect credit metrics will worsen while remaining healthy. We anticipate Debt/EBITDA of 2-2.5x, which is still decent on an absolute basis and in consideration of the cycle.    Our fundamental Credit Bias on CAP remains “Stable”, as the strength of the company's balance sheet more than outweighs its large capex plan and the ongoing weakness in petrochemical margins.    We maintain our "Hold" recommendation on the TPIAIJ '24s, which seem to be fairly valued relative to other Indonesian BB industrial names.  . 

Chandra Asri - Earnings Flash - Q1 FY 2019 Results - Lucror Analytics

Chandra Asri Petrochemical

Chandra Asri - Earnings Flash - Q1 FY 2019 Results - Lucror Analytics