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 ENN Natural Gas as "Medium Risk" on the LARA scale. This reflects the company's long operating track record and diversified business profile, albeit balanced by its exposure to commodity price risks and possible changes in government policies. In addition, ENN Natural Gas has significant related-party transactions. Our fundamental Credit Bias is "Stable". ENN Natural Gas' financial metrics should be stable going forward, supported by good performance in the downstream city gas operations. However, leverage and liquidity could come under pressure if the company makes further acquisitions to expand its operations in the clean energy sector. Controversies are "Immaterial". ENN Natural Gas is exposed to high regulatory risks due to the nature of the mining industry, given its exposure to mining activities via subsidiary Xinneng Mining. The industry also faces extreme scrutiny from environmental agencies, on account of the industry's negative environmental impact. That said, ENN Natural Gas has not been accused of environmental violations in this regard. The company signed an 11-year purchase agreement with Novatek (Russia) in January 2022, for the supply of LNG from 2025. While the agreement was signed before the outbreak of the Russia-Ukraine war, it is unclear if ENN Natural Gas will face sanctions from the West. During a meeting in September 2022, Russian President Vladimir Putin and Chinese President Xi Jinping agreed on all key conditions for a new natural gas supply deal, though the timeline for a formal agreement was not mentioned. We remain cautious in this regard, as further geopolitical developments could trigger sanctions on Chinese gas companies if the agreement is signed or stricter rules are imposed on Russia-related activities. Hence, we view the ESG Impact on Credit as "Moderately Negative".

  We view ENN Natural Gas as "Medium Risk" on the LARA scale. This reflects the company's long operating track record and diversified business profile, albeit balanced by its exposure to commodity price risks and possible changes in government policies. In addition, ENN Natural Gas has significant related-party transactions.   Our fundamental Credit Bias is "Stable". ENN Natural Gas' financial metrics should be stable going forward, supported by good performance in the downstream city gas operations. However, leverage and liquidity could come under pressure if the company makes further acquisitions to expand its operations in the clean energy sector.   Controversies are "Immaterial". ENN Natural Gas is exposed to high regulatory risks due to the nature of the mining industry, given its exposure to mining activities via subsidiary Xinneng Mining. The industry also faces extreme scrutiny from environmental agencies, on account of the industry's negative environmental impact. That said, ENN Natural Gas has not been accused of environmental violations in this regard. The company signed an 11-year purchase agreement with Novatek (Russia) in January 2022, for the supply of LNG from 2025. While the agreement was signed before the outbreak of the Russia-Ukraine war, it is unclear if ENN Natural Gas will face sanctions from the West. During a meeting in September 2022, Russian President Vladimir Putin and Chinese President Xi Jinping agreed on all key conditions for a new natural gas supply deal, though the timeline for a formal agreement was not mentioned. We remain cautious in this regard, as further geopolitical developments could trigger sanctions on Chinese gas companies if the agreement is signed or stricter rules are imposed on Russia-related activities. Hence, we view the ESG Impact on Credit as "Moderately Negative". 

ENN Natural Gas - Tear Sheet - Lucror Analytics