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 Zoomlion as “High Risk” on the LARA scale. This mainly reflects its weak financial profile. The company has concentrated exposure to China’s construction-machinery segment, which is in turn reliant on infrastructure and construction spending in the country. Globally, the industry is dominated by a few MNCs. Zoomlion has a strong domestic market position and is the world’s sixth-largest heavy machinery manufacturer. Being an SOE, the company enjoys a close affiliation with the Chinese government. This improves its access to refinancing capital. We also anticipate that the construction machinery industry will benefit from rising replacement demand and infrastructure development. Our fundamental Credit Bias is "Negative", on account of Zoomlion’s high leverage and low profitability. Moreover, growth in the new agricultural machinery business is limited. The bulk of the company’s finance lease receivables were overdue but not yet impaired. This suggests poor working capital management and aggressive financial policies. Moreover, the dividend payout ratio remains very aggressive at almost 100%. We view the group's corporate governance as “Weak” on the LAGA scale. This takes into account: [1] that Zhan Chunxin holds both the Chairman and CEO positions; and [2] the significant presence of government-related executives on the Board and senior management. These are balanced by the presence of four INEDs (out of seven Board members), the periodic rotation of non-executive directors, as well as minimal related-party transactions.

   We view Zoomlion as “High Risk” on the LARA scale. This mainly reflects its weak financial profile. The company has concentrated exposure to China’s construction-machinery segment, which is in turn reliant on infrastructure and construction spending in the country. Globally, the industry is dominated by a few MNCs.    Zoomlion has a strong domestic market position and is the world’s sixth-largest heavy machinery manufacturer. Being an SOE, the company enjoys a close affiliation with the Chinese government. This improves its access to refinancing capital. We also anticipate that the construction machinery industry will benefit from rising replacement demand and infrastructure development.    Our fundamental Credit Bias is "Negative", on account of Zoomlion’s high leverage and low profitability. Moreover, growth in the new agricultural machinery business is limited. The bulk of the company’s finance lease receivables were overdue but not yet impaired. This suggests poor working capital management and aggressive financial policies. Moreover, the dividend payout ratio remains very aggressive at almost 100%.    We view the group's corporate governance as “Weak” on the LAGA scale. This takes into account: [1] that Zhan Chunxin holds both the Chairman and CEO positions; and [2] the significant presence of government-related executives on the Board and senior management. These are balanced by the presence of four INEDs (out of seven Board members), the periodic rotation of non-executive directors, as well as minimal related-party transactions. 

Zoomlion Heavy Industry H

Zoomlion - Tear Sheet - Lucror Analytics