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

Melco Resorts’s Q4/18 earnings were strong, supported by a 25% y-o-y increase in EBITDA that outperformed the industry at large. That said, earnings growth was more subdued for the full year at just 4%. We note that GGR growth in Macau slowed to only 6% in Q4, compared to 17% for the first three quarters.  We continue to view MLCO’s dividend and share-repurchase policies as being very aggressive. Although the company has yet to release its cash-flow statement, we expect full-year FCF to be negative after accounting for capex and shareholder returns. Further large-scale share repurchases in 2019 would be highly credit negative, in our opinion. The company's financial metrics weakened in Q4/18, with Debt/EBITDA rising to 3.7x at FYE (FYE 2017: 3.5x). We believe MLCO has better revenue stability than peers such as Wynn Macau, owing to its focus on the mass market. Wynn Macau is more reliant on the volatile VIP segment, which is more exposed to regulatory changes. According to MLCO’s ?management, non-VIP segments accounted for more than 90% of the company’s luck-adjusted EBITDA from Macau. We move to “Buy” on the newly issued STCITY ‘24s, while keeping our “Hold” recommendation on the MPEL ‘25s.

   Melco Resorts’s Q4/18 earnings were strong, supported by a 25% y-o-y increase in EBITDA that outperformed the industry at large. That said, earnings growth was more subdued for the full year at just 4%. We note that GGR growth in Macau slowed to only 6% in Q4, compared to 17% for the first three quarters.     We continue to view MLCO’s dividend and share-repurchase policies as being very aggressive. Although the company has yet to release its cash-flow statement, we expect full-year FCF to be negative after accounting for capex and shareholder returns. Further large-scale share repurchases in 2019 would be highly credit negative, in our opinion. The company's financial metrics weakened in Q4/18, with Debt/EBITDA rising to 3.7x at FYE (FYE 2017: 3.5x).    We believe MLCO has better revenue stability than peers such as Wynn Macau, owing to its focus on the mass market. Wynn Macau is more reliant on the volatile VIP segment, which is more exposed to regulatory changes. According to MLCO’s ?management, non-VIP segments accounted for more than 90% of the company’s luck-adjusted EBITDA from Macau.    We move to “Buy” on the newly issued STCITY ‘24s, while keeping our “Hold” recommendation on the MPEL ‘25s. 

Melco Resorts - Earnings Flash - Q4 FY 2018 Results - Lucror Analytics

Melco Resorts & Entertainment

Melco Resorts - Earnings Flash - Q4 FY 2018 Results - Lucror Analytics