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 Hopson Development Holdings Limited as "High Risk" on the LARA scale. Our assessment primarily reflects the company's poor sales execution and weak financial risk profile. The positives are its high-quality land bank in premium locations at low cost, and the cash-generating investment property profile. The company has very strong margins given its positioning as a high-end property developer, but this also exposes it to high regulatory and market risk. This strategy has also resulted in slow asset movement and a large inventory base, exacerbating the liquidity pressure. Hopson has witnessed low growth in the past 10 years compared to peers. That said, it has a large land bank mainly located in top-tier cities, where land parcels are becoming increasingly scarce. Leverage has been moderate, and we remain cautious on a potential increase of debt given the large capital requirements to grow investment properties and accelerating contracted sales. However, it will take time, before the company’s credit metrics improve meaningfully. Our Credit Bias on Hopson is “Stable”, given the growth in contracted sales, steady recurring income, moderate leverage and improved liquidity. However, we remain cautious on a potential increase in leverage, given the capital required to grow the investment property profile. Weaknesses include: [1] a poor track record on sales execution in the past 10 years; and [2] inadequate corporate governance, with an ineffective Board and potential political risk. We view Hopson as "Inadequate" on the LAGA scale, given the: [1] ineffective Board dominated by Chu family members; [2] high turnover of senior management, with the CEO post vacant for six years; [3] weak INEDs; [4] potential political risk from Chairman Mr Chu’s extensive government connections; and [5] related-party transactions. Positively, the company has a good track record of calling its bonds (in 2015 and 2016).

  We view Hopson Development Holdings Limited as "High Risk" on the LARA scale. Our assessment primarily reflects the company's poor sales execution and weak financial risk profile. The positives are its high-quality land bank in premium locations at low cost, and the cash-generating investment property profile. The company has very strong margins given its positioning as a high-end property developer, but this also exposes it to high regulatory and market risk. This strategy has also resulted in slow asset movement and a large inventory base, exacerbating the liquidity pressure.   Hopson has witnessed low growth in the past 10 years compared to peers. That said, it has a large land bank mainly located in top-tier cities, where land parcels are becoming increasingly scarce. Leverage has been moderate, and we remain cautious on a potential increase of debt given the large capital requirements to grow investment properties and accelerating contracted sales. However, it will take time, before the company’s credit metrics improve meaningfully.   Our Credit Bias on Hopson is “Stable”, given the growth in contracted sales, steady recurring income, moderate leverage and improved liquidity. However, we remain cautious on a potential increase in leverage, given the capital required to grow the investment property profile. Weaknesses include: [1] a poor track record on sales execution in the past 10 years; and [2] inadequate corporate governance, with an ineffective Board and potential political risk.   We view Hopson as "Inadequate" on the LAGA scale, given the: [1] ineffective Board dominated by Chu family members; [2] high turnover of senior management, with the CEO post vacant for six years; [3] weak INEDs; [4] potential political risk from Chairman Mr Chu’s extensive government connections; and [5] related-party transactions. Positively, the company has a good track record of calling its bonds (in 2015 and 2016). 

Hopson Development

Hopson - Tear Sheet - Lucror Analytics