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 Tunas Baru Lampung (TBLA) as “High Risk” on the LARA scale. This reflects the risks associated with its: (1) small scale and geographically concentrated operations; (2) volatile working capital and OCF, on account of the uncertainty over import quotas for the refined-sugar business; and (3) moderately weak financial profile. These are partly offset by the company’s low cash costs and vertically integrated business model, which reduces exposure to cyclical crude palm oil prices. While we acknowledge TBLA’s questionable environmental sustainability and governance track record, we believe the risk is mitigated by the company’s domestic-focused business model. Our fundamental Credit Bias on TBLA is “Negative”. We are cautious on the company’s working capital volatility, which we will monitor. Expansionary capex also remains higher than expected, which could weigh on the financial profile. That said, TBLA's margins and earnings should be more resilient than peers’, thanks to its vertical integration and production of non-discretionary household products. We view TBLA's corporate governance as “Weak” on the LAGA scale. This takes into account the effective control of the company by Widarto and Santoso Winata (combined ownership of 55%), the company's questionable environmental record, as well as concerns over the effectiveness of the Board of Commissioners and Directors, given the presence of family members on both Boards.

  We view Tunas Baru Lampung (TBLA) as “High Risk” on the LARA scale. This reflects the risks associated with its: (1) small scale and geographically concentrated operations; (2) volatile working capital and OCF, on account of the uncertainty over import quotas for the refined-sugar business; and (3) moderately weak financial profile. These are partly offset by the company’s low cash costs and vertically integrated business model, which reduces exposure to cyclical crude palm oil prices.   While we acknowledge TBLA’s questionable environmental sustainability and governance track record, we believe the risk is mitigated by the company’s domestic-focused business model.   Our fundamental Credit Bias on TBLA is “Negative”. We are cautious on the company’s working capital volatility, which we will monitor. Expansionary capex also remains higher than expected, which could weigh on the financial profile. That said, TBLA's margins and earnings should be more resilient than peers’, thanks to its vertical integration and production of non-discretionary household products.   We view TBLA's corporate governance as “Weak” on the LAGA scale. This takes into account the effective control of the company by Widarto and Santoso Winata (combined ownership of 55%), the company's questionable environmental record, as well as concerns over the effectiveness of the Board of Commissioners and Directors, given the presence of family members on both Boards. 

Tunas Baru - Tear Sheet - Lucror Analytics