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

Credit Analyst, Lucror Analytics

Chuanyi Zhou

Credit Analyst

Credit

We view China South City​ (CSC) as “High Risk” on the LARA scale, given the refinancing risk and increasing financing costs. We also note the risks associated with: [1] CSC's rapid debt-funded expansion and weak financial risk profile; [2] the inherent volatility associated with commercial developments; and [3] potential regulatory changes, including delays in government-led supporting infrastructure projects. That said, positives include the: [1] shift to fast-churn property sales; [2] operational recovery from the impact of the pandemic, with good contracted sales; [3] above average, albeit declining, operating margins, thanks to the cheap land bank; and [4] decent geographical diversification in regional centres. Access to funding is a critical factor in CSC’s case, given the company’s continuous need for refinancing. Even though financing costs have been increasing over the years, the company continues to raise expensive offshore bonds. This could suggest challenges in accessing funding onshore. Our fundamental Credit Bias on CSC is “Negative”, given the company’s weak liquidity profile and refinancing risk. The credit profile looks set to remain highly leveraged in the coming year, making CSC vulnerable to further deterioration in the economy. That said, the recovery in contracted sales and rental income are positives. We view CSC as “Weak” on the LAGA scale. This is primarily due to: [1] the weak Executive Board; [2] high turnover for both the Board and management; [3] poor clarity in terms of related companies being direct competitors; and [4] potential changes in the shareholding structure.

   We view China South City​ (CSC) as “High Risk” on the LARA scale, given the refinancing risk and increasing financing costs. We also note the risks associated with: [1] CSC's rapid debt-funded expansion and weak financial risk profile; [2] the inherent volatility associated with commercial developments; and [3] potential regulatory changes, including delays in government-led supporting infrastructure projects. That said, positives include the: [1] shift to fast-churn property sales; [2] operational recovery from the impact of the pandemic, with good contracted sales; [3] above average, albeit declining, operating margins, thanks to the cheap land bank; and [4] decent geographical diversification in regional centres.    Access to funding is a critical factor in CSC’s case, given the company’s continuous need for refinancing. Even though financing costs have been increasing over the years, the company continues to raise expensive offshore bonds. This could suggest challenges in accessing funding onshore.    Our fundamental Credit Bias on CSC is “Negative”, given the company’s weak liquidity profile and refinancing risk. The credit profile looks set to remain highly leveraged in the coming year, making CSC vulnerable to further deterioration in the economy. That said, the recovery in contracted sales and rental income are positives.    We view CSC as “Weak” on the LAGA scale. This is primarily due to: [1] the weak Executive Board; [2] high turnover for both the Board and management; [3] poor clarity in terms of related companies being direct competitors; and [4] potential changes in the shareholding structure. 

China South City - Tear Sheet - Lucror Analytics