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 Pan Brothers as “High Risk” on the LARA scale. The company is small relative to global peers and operates in the challenging textile industry. That said, it is run by an experienced management team and backed by a solid shareholder base. Our assessment reflects the risks associated with the company's: [1] high leverage due to large working capital requirements; [2] small scale and presence in a fragmented industry, with limited bargaining power; [3] concentrated customer base; and [4] seasonal cash flow. Our view also considers these strengths: [1] a track record of consistent earnings, built on a cost pass-through model; [2] long-term customer relationships with global apparel brands, which provide solid short-term contractual revenue visibility; and [3] sound liquidity, given cash on hand and committed working capital facilities. Our fundamental Credit Bias on Pan Brothers is “Stable”. We believe leverage will remain elevated in the near term, as the company seeks to expand its production capacity. That said, we do not expect a material near-term deterioration in the credit profile either. The company should continue to grow earnings while keeping margins stable, supported by higher production. We view the group as “Moderate” on the LAGA scale, given the broad ownership base, experienced management, limited related-party transactions and track record of the two families behind senior management. Our opinion also takes into account the weak regulatory oversight, as Pan Brothers is listed on the Jakarta exchange.

  We view Pan Brothers as “High Risk” on the LARA scale. The company is small relative to global peers and operates in the challenging textile industry. That said, it is run by an experienced management team and backed by a solid shareholder base. Our assessment reflects the risks associated with the company's: [1] high leverage due to large working capital requirements; [2] small scale and presence in a fragmented industry, with limited bargaining power; [3] concentrated customer base; and [4] seasonal cash flow. Our view also considers these strengths: [1] a track record of consistent earnings, built on a cost pass-through model; [2] long-term customer relationships with global apparel brands, which provide solid short-term contractual revenue visibility; and [3] sound liquidity, given cash on hand and committed working capital facilities.   Our fundamental Credit Bias on Pan Brothers is “Stable”. We believe leverage will remain elevated in the near term, as the company seeks to expand its production capacity. That said, we do not expect a material near-term deterioration in the credit profile either. The company should continue to grow earnings while keeping margins stable, supported by higher production.   We view the group as “Moderate” on the LAGA scale, given the broad ownership base, experienced management, limited related-party transactions and track record of the two families behind senior management. Our opinion also takes into account the weak regulatory oversight, as Pan Brothers is listed on the Jakarta exchange. 

Pan Brothers - Tear Sheet - Lucror Analytics