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

China Vanke’s H1/23 results were in line with our expectations, with single-digit growth in overall revenue but ongoing margin pressure. The company realised CNY 201 bn of revenue in the period, up 2.9% y-o-y, while attributable profit fell 19.4% to CNY 9.87 bn. Booked revenue from property development was CNY 171 bn (-4.5%), owing to weakness in settlement area (-5.2%) and settlement gross margin (-1.6 ppts). LTM adjusted debt climbed 2.3% y-o-y to CNY 347 bn at end-June, leading to weakened credit metrics. That said, the developer managed to optimise its debt structure in H1/23, with less exposure to short-term and offshore debt. The LTM cash balance declined 11% to CNY 120 bn, but covered short-term debt by 2.4x (FYE 2022: 2.0x). The company has no offshore debt due in H2/23 but will have two USD bonds coming due in 2024, with total outstanding principle of USD 1.2 bn. We believe Vanke faces ongoing destocking and margin pressure. That said, the company appears to have smooth access to external funding, with prudent cash-flow management. We see limited near-term repayment risk. Our fundamental Credit Bias on Vanke is "Stable". We maintain our "Buy" recommendation on the 2024 bonds, as the yields for these notes appear to be more attractive, but revise our recommendation on the rest of the curve to "Hold" from "Buy".

  China Vanke’s H1/23 results were in line with our expectations, with single-digit growth in overall revenue but ongoing margin pressure. The company realised CNY 201 bn of revenue in the period, up 2.9% y-o-y, while attributable profit fell 19.4% to CNY 9.87 bn. Booked revenue from property development was CNY 171 bn (-4.5%), owing to weakness in settlement area (-5.2%) and settlement gross margin (-1.6 ppts).   LTM adjusted debt climbed 2.3% y-o-y to CNY 347 bn at end-June, leading to weakened credit metrics. That said, the developer managed to optimise its debt structure in H1/23, with less exposure to short-term and offshore debt. The LTM cash balance declined 11% to CNY 120 bn, but covered short-term debt by 2.4x (FYE 2022: 2.0x). The company has no offshore debt due in H2/23 but will have two USD bonds coming due in 2024, with total outstanding principle of USD 1.2 bn.   We believe Vanke faces ongoing destocking and margin pressure. That said, the company appears to have smooth access to external funding, with prudent cash-flow management. We see limited near-term repayment risk. Our fundamental Credit Bias on Vanke is "Stable". We maintain our "Buy" recommendation on the 2024 bonds, as the yields for these notes appear to be more attractive, but revise our recommendation on the rest of the curve to "Hold" from "Buy". 

China Vanke - Earnings Flash - H1 FY 2023 Results - Lucror Analytics