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 MGM China as "Medium Risk" on the LARA scale. The company has a good operating track record in the Macau gaming market, supported by two high-quality assets (MGM Macau and MGM Cotai). Our view also takes into account the company's geographical concentration and exposure to Chinese regulatory changes. Over the medium to long term, Macau's gaming industry should benefit from the rising affluence and discretionary income of China's growing middle class. That said, the industry has grappled with almost three years of cash burn amid the COVID-19 pandemic, resulting in heavily deteriorated financial profiles for all Macau gaming operators. Our fundamental Credit Bias on MGM China is "Stable", supported by a faster than anticipated lifting of COVID-19 related travel restrictions in Macau. We expect the company to generate positive EBITDA and FCF in FY 2023, which may enable it to gradually deleverage to near pre-pandemic levels by late FY 2024. In addition, MGM China has modest capex plans and historically lower dividend payouts compared to peers, which should support earlier deleveraging. The company has very strong liquidity, and no debt maturities until May 2024. Controversies are "Immaterial". Some ESG-compliant funds may be prohibited from investing in MGM China, due to the nature of its core business (casinos). That said, Macau's gaming industry is established, transparent and highly regulated. We believe the curtailment of junket activities would help to further raise operators’ transparency. Moreover, the authorities are seeking to reduce the city’s reliance on gaming and promote leisure tourism in the medium term. These factors should mitigate ESG-related risks. Overall, the ESG Impact on Credit is "Neutral".

  We view MGM China as "Medium Risk" on the LARA scale. The company has a good operating track record in the Macau gaming market, supported by two high-quality assets (MGM Macau and MGM Cotai). Our view also takes into account the company's geographical concentration and exposure to Chinese regulatory changes. Over the medium to long term, Macau's gaming industry should benefit from the rising affluence and discretionary income of China's growing middle class. That said, the industry has grappled with almost three years of cash burn amid the COVID-19 pandemic, resulting in heavily deteriorated financial profiles for all Macau gaming operators.   Our fundamental Credit Bias on MGM China is "Stable", supported by a faster than anticipated lifting of COVID-19 related travel restrictions in Macau. We expect the company to generate positive EBITDA and FCF in FY 2023, which may enable it to gradually deleverage to near pre-pandemic levels by late FY 2024. In addition, MGM China has modest capex plans and historically lower dividend payouts compared to peers, which should support earlier deleveraging. The company has very strong liquidity, and no debt maturities until May 2024.   Controversies are "Immaterial". Some ESG-compliant funds may be prohibited from investing in MGM China, due to the nature of its core business (casinos). That said, Macau's gaming industry is established, transparent and highly regulated. We believe the curtailment of junket activities would help to further raise operators’ transparency. Moreover, the authorities are seeking to reduce the city’s reliance on gaming and promote leisure tourism in the medium term. These factors should mitigate ESG-related risks. Overall, the ESG Impact on Credit is "Neutral".  

MGM China - Tear Sheet - Lucror Analytics

MGM China Holdings

MGM China - Tear Sheet - Lucror Analytics