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 Shui On Land as “Medium Risk” on the LARA scale. Our opinion is underpinned by the company's portfolio of high-quality assets situated in prime locations in major Chinese cities. It has a large investment property portfolio, which generates sufficient recurring revenue to cover more than half of adjusted interest expenses. As of 30 June 2019, the investment properties were worth CNY 50 bn, covering 1.2x of total debt. Shui On could dispose of assets to boost cash flow, if needed. These factors are balanced against the company’s: [1] small scale; [2] moderately weak but improving financial profile; and [3] moderate use of perpetual securities (12% of adjusted debt at 30 June 2019). Our fundamental Credit Bias is “Negative”, on account of the deterioration in earnings and the weaker financial profile. We expect FY 2019 revenue recognition to remain poor. That said, the company has good access to financing, as evidenced by its track record of bond issuances at competitive interest costs. We view the company as “Weak” on the LAGA scale due to: [1] concentration of ownership with Chairman Vincent Lo, who holds a 57% stake; [2] appointment of Mr Lo’s daughter, Stephanie Lo, as ED in August 2018; [3] lack of separation of duties between Chairman and CEO positions (both held by Mr Lo); and [4] outside business interests held by Mr Lo, mainly SOCAM and other group entities. Five of the nine Board members are independent, but four of them have been in their positions since May 2006. Positively, recurring related-party transactions are not significant.

  We view Shui On Land as “Medium Risk” on the LARA scale. Our opinion is underpinned by the company's portfolio of high-quality assets situated in prime locations in major Chinese cities. It has a large investment property portfolio, which generates sufficient recurring revenue to cover more than half of adjusted interest expenses. As of 30 June 2019, the investment properties were worth CNY 50 bn, covering 1.2x of total debt. Shui On could dispose of assets to boost cash flow, if needed. These factors are balanced against the company’s: [1] small scale; [2] moderately weak but improving financial profile; and [3] moderate use of perpetual securities (12% of adjusted debt at 30 June 2019).   Our fundamental Credit Bias is “Negative”, on account of the deterioration in earnings and the weaker financial profile. We expect FY 2019 revenue recognition to remain poor. That said, the company has good access to financing, as evidenced by its track record of bond issuances at competitive interest costs.   We view the company as “Weak” on the LAGA scale due to: [1] concentration of ownership with Chairman Vincent Lo, who holds a 57% stake; [2] appointment of Mr Lo’s daughter, Stephanie Lo, as ED in August 2018; [3] lack of separation of duties between Chairman and CEO positions (both held by Mr Lo); and [4] outside business interests held by Mr Lo, mainly SOCAM and other group entities. Five of the nine Board members are independent, but four of them have been in their positions since May 2006. Positively, recurring related-party transactions are not significant.  

Shui On Land - Tear Sheet - Lucror Analytics