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 Country Garden as “Low Risk” on the LARA scale. The company has expanded rapidly over the years, and is one of the largest property developers in China by sales. Due to its size, we believe it is systemically important to the country’s property industry. That said, the company could face rising execution risks due to its large land inventory in lower-tier cities, where demand is weakening and ASPs may have peaked. Moreover, the company’s fast churn strategy and heavy reliance on the development business will leave it more susceptible to an industry downturn, as compared to peers. Positively, the leverage profile is moderate and has been stable. Country Garden also has a broad debt maturity profile and access to diverse sources of capital. Our fundamental Credit Bias is “Stable”, owing to Country Garden's improving revenue recognition and manageable financial profile. The slower pace of land acquisitions should help the company maintain its financial profile amid rising land costs. That said, Country Garden faces weaker contracted sales growth and margins may decline. We view Country Garden as “Weak” on the LAGA scale, mainly due to the: [1] large and unwieldy Board, with 13 members; [2] presence of multiple family members on the Board; and [3] weak INEDs who have served for long periods and hold a sizeable number of shares. In addition, there is a moderate amount of ongoing related-party transactions, mainly with the Yeung family’s outside businesses. That said, we take some comfort from Country Garden's operating track record and its competent senior management team. We move our recommendation on the COGARD curve to "Buy" from "Hold".

  We view Country Garden as “Low Risk” on the LARA scale. The company has expanded rapidly over the years, and is one of the largest property developers in China by sales. Due to its size, we believe it is systemically important to the country’s property industry. That said, the company could face rising execution risks due to its large land inventory in lower-tier cities, where demand is weakening and ASPs may have peaked. Moreover, the company’s fast churn strategy and heavy reliance on the development business will leave it more susceptible to an industry downturn, as compared to peers. Positively, the leverage profile is moderate and has been stable. Country Garden also has a broad debt maturity profile and access to diverse sources of capital.   Our fundamental Credit Bias is “Stable”, owing to Country Garden's improving revenue recognition and manageable financial profile. The slower pace of land acquisitions should help the company maintain its financial profile amid rising land costs. That said, Country Garden faces weaker contracted sales growth and margins may decline.   We view Country Garden as “Weak” on the LAGA scale, mainly due to the: [1] large and unwieldy Board, with 13 members; [2] presence of multiple family members on the Board; and [3] weak INEDs who have served for long periods and hold a sizeable number of shares. In addition, there is a moderate amount of ongoing related-party transactions, mainly with the Yeung family’s outside businesses. That said, we take some comfort from Country Garden's operating track record and its competent senior management team.   We move our recommendation on the COGARD curve to "Buy" from "Hold".  

Country Garden - Tear Sheet - Lucror Analytics

Country Garden Holdings Co

Country Garden - Tear Sheet - Lucror Analytics