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 are commencing full coverage of Ronshine. We view Ronshine as “High Risk” on the LARA scale. Financial risk is elevated, with leverage high amid the company’s aggressive debt-funded expansion. Ronshine faces a pressing need for refinancing in the next two years, given its rapid post-listing, debt-funded expansion in 2016 and 2017. We remain cautious on the lack of transparency and its short listing history. The new, key markets of Shanghai and Hangzhou are very competitive and tend to be subject to tight government controls. Ronshine’s aggressive land acquisitions add to the execution risk, creating challenges in terms of sell-through and achieving satisfactory margins. Positives include strong contracted sales growth and the quality land bank. Investors could give some credit to potential support from the Oushi and Zhenro groups, which are controlled by Chairman Ou Zonghong’s brothers. That said, there is little transparency on the companies' relationships. Our Credit Bias on Ronshine is “Stable”, in view of its efforts at deleveraging and the slowing pace of expansion in 2018. We like the company’s geographical exposure, quality land bank, strong contracted sales, decent access to capital, and possible support from brother companies. That said, we note the company has a short-dated maturity profile and a pressing need for refinancing in the next two years. In addition, Ronshine’s key markets are very competitive and subject to tight government controls. We remain cautious on the company’s increasing cost of financing and related-party transactions. We view Ronshine's corporate governance as “Weak” on the LAGA scale, as: [1] founder and controlling shareholder Mr Ou Zonghong holds 64.4% of the company; [2] Mr Ou is both Chairman of the Board and CEO; [3] the three INEDs have extensive experience, but serve on the Boards of many listed companies, making them less effective; INED Lo Wing Yan William is also an INED of Hsin Chong Group, which defaulted last year; and [4] there is a lack of transparency on related-party transactions with entities controlled by Chairman Mr Ou's brothers.

   We are commencing full coverage of Ronshine.    We view Ronshine as “High Risk” on the LARA scale. Financial risk is elevated, with leverage high amid the company’s aggressive debt-funded expansion. Ronshine faces a pressing need for refinancing in the next two years, given its rapid post-listing, debt-funded expansion in 2016 and 2017. We remain cautious on the lack of transparency and its short listing history. The new, key markets of Shanghai and Hangzhou are very competitive and tend to be subject to tight government controls. Ronshine’s aggressive land acquisitions add to the execution risk, creating challenges in terms of sell-through and achieving satisfactory margins. Positives include strong contracted sales growth and the quality land bank. Investors could give some credit to potential support from the Oushi and Zhenro groups, which are controlled by Chairman Ou Zonghong’s brothers. That said, there is little transparency on the companies' relationships.    Our Credit Bias on Ronshine is “Stable”, in view of its efforts at deleveraging and the slowing pace of expansion in 2018. We like the company’s geographical exposure, quality land bank, strong contracted sales, decent access to capital, and possible support from brother companies. That said, we note the company has a short-dated maturity profile and a pressing need for refinancing in the next two years. In addition, Ronshine’s key markets are very competitive and subject to tight government controls. We remain cautious on the company’s increasing cost of financing and related-party transactions.    We view Ronshine's corporate governance as “Weak” on the LAGA scale, as: [1] founder and controlling shareholder Mr Ou Zonghong holds 64.4% of the company; [2] Mr Ou is both Chairman of the Board and CEO; [3] the three INEDs have extensive experience, but serve on the Boards of many listed companies, making them less effective; INED Lo Wing Yan William is also an INED of Hsin Chong Group, which defaulted last year; and [4] there is a lack of transparency on related-party transactions with entities controlled by Chairman Mr Ou's brothers. 

Ronshine China Holdings

Ronshine - Tear Sheet - Lucror Analytics