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

We view Chandra Asri Petrochemical (CAP) as “Medium Risk” on the LARA scale, mainly due to the balance sheet’s strength and the conservative financial policy, which together more than offset the cyclical business. The company is well-positioned as Indonesia's largest petrochemicals producer in a fast-growing market. The business is volatile and dependent on the spreads between naphtha and its products. That said, CAP has advantages in terms of its strategic location and relationships with customers, which allow it to command a slight premium over the regional benchmark. The large capex programme to grow capacity and downstream expansion is conservatively funded by both debt and equity (from rights offerings, which have been supported by the shareholders). Key risks stem from the volatility of spreads between naphtha and its products, as well as execution risks for new projects. Our Credit Bias on CAP is “Stable”, as the balance sheet’s strength more than offsets the margin pressure (spreads between naphtha and its products are narrowing) and large capex plan. We view CAP’s corporate governance as “Moderate” on the LAGA scale. Our assessment takes into account: [1] its long track record of operations and listing history (since 1994) (positive); [2] the shareholder structure, with a reasonably large outside shareholder (SCG) providing checks and balances (SCG has two seats on the Board of Commissioners - occupied by SCG’s CFO and CEO - and two seats on the Board of Directors) (neutral to positive); [3] the Board structure, with an independent president commissioner (positive); and [4] ongoing and significant related-party transactions (negative). We believe that SCG's strong reputation with respect to corporate governance mitigates the reputational effect related to controlling shareholder Prajogo Pangestu, who has been linked with corruption in the past. We maintain our "Buy" recommendation on the TPIAIJ '24s.

   We view Chandra Asri Petrochemical (CAP) as “Medium Risk” on the LARA scale, mainly due to the balance sheet’s strength and the conservative financial policy, which together more than offset the cyclical business. The company is well-positioned as Indonesia's largest petrochemicals producer in a fast-growing market. The business is volatile and dependent on the spreads between naphtha and its products. That said, CAP has advantages in terms of its strategic location and relationships with customers, which allow it to command a slight premium over the regional benchmark. The large capex programme to grow capacity and downstream expansion is conservatively funded by both debt and equity (from rights offerings, which have been supported by the shareholders). Key risks stem from the volatility of spreads between naphtha and its products, as well as execution risks for new projects.    Our Credit Bias on CAP is “Stable”, as the balance sheet’s strength more than offsets the margin pressure (spreads between naphtha and its products are narrowing) and large capex plan.    We view CAP’s corporate governance as “Moderate” on the LAGA scale. Our assessment takes into account: [1] its long track record of operations and listing history (since 1994) (positive); [2] the shareholder structure, with a reasonably large outside shareholder (SCG) providing checks and balances (SCG has two seats on the Board of Commissioners - occupied by SCG’s CFO and CEO - and two seats on the Board of Directors) (neutral to positive); [3] the Board structure, with an independent president commissioner (positive); and [4] ongoing and significant related-party transactions (negative). We believe that SCG's strong reputation with respect to corporate governance mitigates the reputational effect related to controlling shareholder Prajogo Pangestu, who has been linked with corruption in the past.    We maintain our "Buy" recommendation on the TPIAIJ '24s. 

Chandra Asri - Tear Sheet - Lucror Analytics