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

Beijing Energy International Holding / Credit

Beijing Energy International Holding (686 HK)

We view Panda Green Energy (PGE) as “High Risk” on the LARA scale. This reflects risks associated with: [1] the company's short track record and rapid expansion; [2] poor financial risk profile; [3] weak cash flow, with rising receivables; [4] heightened refinancing risk; and [5] uncertainties in the regulatory environment. Our opinion also considers the association with China Merchants Group ?(CMG, 22.75% indirect shareholder), which provides management and operational assistance. Our fundamental Credit Bias for the company's standalone profile is "Negative" due to the weak business risk profile, in particular the long tariff receivable cycle and poor liquidity. In February 2019, PGE raised HKD 1.7 bn in new equity from existing and additional shareholders (mainly SOE entities). This should ease refinancing risk in the short term, and reflects the decent shareholder support. However, it is unclear whether timely and sustainable support will be provided going forward. We view the group as “Weak” on the LAGA scale, mainly due to the poor visibility and limited disclosure on its refinancing plans. PGE is 22.75% owned and controlled by China Merchants New Energy Group (CMNEG), which is in turn 100% indirectly owned by the central government SASAC (moderate). The Board of Directors is well structured. However, the Chairman/CEO, co-Chairman and co-CEO all have various roles in other companies (mostly subsidiaries of CMG). We have our doubts on their effectiveness (weak). Moreover, the INEDs appear to be professional directors and their effectiveness is unclear (weak). The level of related-party transactions is low (moderate).

   We view Panda Green Energy (PGE) as “High Risk” on the LARA scale. This reflects risks associated with: [1] the company's short track record and rapid expansion; [2] poor financial risk profile; [3] weak cash flow, with rising receivables; [4] heightened refinancing risk; and [5] uncertainties in the regulatory environment. Our opinion also considers the association with China Merchants Group ?(CMG, 22.75% indirect shareholder), which provides management and operational assistance.    Our fundamental Credit Bias for the company's standalone profile is "Negative" due to the weak business risk profile, in particular the long tariff receivable cycle and poor liquidity. In February 2019, PGE raised HKD 1.7 bn in new equity from existing and additional shareholders (mainly SOE entities). This should ease refinancing risk in the short term, and reflects the decent shareholder support. However, it is unclear whether timely and sustainable support will be provided going forward.    We view the group as “Weak” on the LAGA scale, mainly due to the poor visibility and limited disclosure on its refinancing plans. PGE is 22.75% owned and controlled by China Merchants New Energy Group (CMNEG), which is in turn 100% indirectly owned by the central government SASAC (moderate). The Board of Directors is well structured. However, the Chairman/CEO, co-Chairman and co-CEO all have various roles in other companies (mostly subsidiaries of CMG). We have our doubts on their effectiveness (weak). Moreover, the INEDs appear to be professional directors and their effectiveness is unclear (weak). The level of related-party transactions is low (moderate). 

Panda Green Energy - Tear Sheet - Lucror Analytics