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 view Sunac as "High Risk" on the LARA scale. Our assessment reflects the company's: [1] rapid growth (and the associated risk); [2] debt-funded expansion; [3] weak debt maturity profile, with substantial short- and medium-term bank loans; and [4] poor operating margins. These factors are partly mitigated by the company’s fast cash conversion and proven ability to access capital markets. Sunac may remain highly levered as it grows quickly, expanding into other major T1 and T2 cities in southern and western China. The company also continues to seek expansion opportunities through acquisitions, which could further weaken the balance sheet. Our fundamental Credit Bias on Sunac is "Stable", based on the signs of recovery in contracted sales and the company's progress in deleveraging. We like Sunac's solid saleable resources, good track record of sales execution and access to funding. That said, we remain cautious on the company's liquidity profile, investment discipline and lack of transparency. We view the company as "Weak" on the LAGA scale, mainly on account of: [1] the poor investment discipline and disclosure; [2] substantial related-party transactions; and [3] Chairman Sun Hongbin's 45.4% control and track record of aggressive management. These negatives are partly offset by the strong Executive Board.

   We view Sunac as "High Risk" on the LARA scale. Our assessment reflects the company's: [1] rapid growth (and the associated risk); [2] debt-funded expansion; [3] weak debt maturity profile, with substantial short- and medium-term bank loans; and [4] poor operating margins. These factors are partly mitigated by the company’s fast cash conversion and proven ability to access capital markets. Sunac may remain highly levered as it grows quickly, expanding into other major T1 and T2 cities in southern and western China. The company also continues to seek expansion opportunities through acquisitions, which could further weaken the balance sheet.    Our fundamental Credit Bias on Sunac is "Stable", based on the signs of recovery in contracted sales and the company's progress in deleveraging. We like Sunac's solid saleable resources, good track record of sales execution and access to funding. That said, we remain cautious on the company's liquidity profile, investment discipline and lack of transparency.    We view the company as "Weak" on the LAGA scale, mainly on account of: [1] the poor investment discipline and disclosure; [2] substantial related-party transactions; and [3] Chairman Sun Hongbin's 45.4% control and track record of aggressive management. These negatives are partly offset by the strong Executive Board. 

Sunac China Holdings

Sunac - Tear Sheet - Lucror Analytics