Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

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.

Credit

The Asia HY Trade Book for the month of April includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of April includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - April 2021 - Lucror Analytics

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-6159'>China SCE</a></li><li><a href='#lucror-entity-8108'>Hopson Development</a></li><li><a href='#lucror-entity-1776'>Indika Energy</a></li><li><a href='#lucror-entity-28672'>Powerlong Commercial Management Holdings</a></li><li><a href='#lucror-entity-21047'>Ronshine China Holdings</a></li><li><a href='#lucror-entity-10365'>Sirtex Medical</a></li><li><a href='#lucror-entity-8085'>Times China</a></li><li><a href='#lucror-entity-14152'>Yanlord Land</a></li><li><a href='#lucror-entity-24592'>Yanzhou Coal Mining</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.China SCEHopson DevelopmentIndika EnergyPowerlong Commercial Management HoldingsRonshine China HoldingsSirtex MedicalTimes ChinaYanlord LandYanzhou Coal Mining

Morning Views Asia: China SCE, Hopson Development, Indika Energy

In this month’s “In-Focus” section, we provide an update on the Chinese property sector, including operational trends and regulatory developments, as well as an overview of the FY 2020 results of most developers under our full coverage. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we provide an update on the Chinese property sector, including operational trends and regulatory developments, as well as an overview of the FY 2020 results of most developers under our full coverage.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market. 

Asia HY Monthly - Chinese Property Update (2021) - Lucror Analytics

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead, despite overwhelming odds.

The Chief Executive Officer of SGX-listed Marco Polo Marine Ltd struggled for many months to keep his marine logistics company afloat, amidst a protracted downturn in the oil and gas industry that began with plunging crude prices in mid-2015.

“Those days were the toughest I had ever encountered,” Lee recalled. “Everything crumbled when oil prices collapsed. Most of my peers in the industry went belly-up because funding from the banks evaporated. If we had also thrown in the towel, all our stakeholders, employees, and subcontractors would have suffered, so we chose the hardest route, which is to try and save the company instead.”

Lee spent nearly a year looking for investors and liquidity sources to shore up Marco Polo. In November 2017, he found nine new investors who pooled together S$60 million in rescue financing for the Group. Apricot Capital, Yanlord, Penguin International, Soilbuild, Goldbell, and Oxley were some of the companies named in association with the equity injection deal.

“When we were searching for investors, I visited 150 people, and was rejected 141 times. The process of knocking on every single door - one after another - wasn’t an easy one,” he admitted.

At the end of the day, it was all about staying the course. “As cliched as it may sound, I really learnt what perseverance, stamina and commitment means,” he added. “It all boils down to a ‘never say die’ attitude.”

Four years on, following a massive debt restructuring and refinancing exercise, Marco Polo has cleaned up its balance sheet, and swung from a net debt to a net cash position. As at 30 September 2020, net debt to equity was a negative 14%, while cash and cash equivalents stood at S$13.6 million.

“That period was quite a rollercoaster ride, and now, the Group is finally out of the woods,” Lee said.

“Today, while oil and gas remains our bread and butter, we’re actively expanding our business ventures, and focused on transitioning into the renewable energy sector. This is a fledgling industry with huge opportunities, as countries and organisations increasingly turn to green energy sources. This augurs well for our growth prospects.”

Post-Restructuring Pivot

Listed on the then SGX Sesdaq in 2007 and migrated to the Mainboard in 2009, Marco Polo Marine principally engages in shipping and shipyard operations. Its shipping business revolves around the chartering of Offshore Supply Vessels (OSVs), which comprise Anchor Handling Tug Supply (AHTS) vessels for deployment in regional waters, as well as chartering of tugboats and barges by customers engaged in the mining, commodities, construction, infrastructure and land reclamation industries.

The shipyard operations focus on shipbuilding as well as ship maintenance, repair, outfitting and conversion services, carried out in its shipyard in Batam, Indonesia. Occupying a total land area of about 34 hectares with a seafront of approximately 650 meters, the shipyard also houses three dry docks, boosting the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.

Tapping on this core expertise, Marco Polo is pivoting to the renewables sector, providing customised solutions in the chartering, development, fabrication, and construction of bespoke renewable energy assets for its customers.

In particular, the Group is actively pursuing contracts for the construction of offshore wind farm vessels in the region. Although the specifications are different from those used in oil and gas exploration projects, vessels can be deployed to support certain parts of the wind farm installation and construction, without additional capital expenditure.

“Offshore wind farms are low-hanging fruit in the region - there is a lot of potential for the construction and installation of such projects in Taiwan and many opportunities in countries like South Korea, Japan and Vietnam,” Lee said.

Analysts point out that the offshore wind as well as oil and gas industries share technologies and elements of their supply chains. The International Energy Agency (IEA) estimates that 40% of the full-lifetime costs of an offshore wind project, including construction, has significant synergies with the offshore oil and gas sector.

“The burgeoning offshore wind energy industry in Asia is in its nascent stage, where structures are still installed in shallow waters with depths of up to 50-60 metres. This presents a tremendous area of opportunity for Marco Polo Marine, whose fleet specialises in those depths,” UOB-Kay Hian said in a company report published in August last year.

“Of particular interest is the Taiwan offshore wind market, one of the fastest growing in the world - the government targets to produce 15.5 gigawatts of electricity through offshore wind by 2035, making it the most sought-after destination for the world’s top offshore wind developers as they seek a foothold in Asia,” it added.

Green Economy Focus

Meanwhile, Marco Polo continues to grapple with a number of challenges, not the least of which is weaker oil demand due to the global downturn following COVID-19. Oil prices fell dramatically in the early stages of the pandemic, and have only partially recovered to pre-crisis levels.

For its ship chartering business, the Group will step up marketing efforts and explore additional revenue sources by going beyond Southeast Asia, although the success of such efforts ultimately depends on containment of the pandemic. Utilisation of its tugboats and barges is expected to improve as construction activity in Singapore progressively resumes. As for the shipyard division, it will focus on securing ship repair and maintenance orders from regional ship owners.

One saving grace is that the COVID-19 has brought sustainability and clean energy sources into even greater focus, Lee noted.

“Investors have shied away from traditional coal projects and a lot of liquidity has poured into renewables - this has picked up during the pandemic,” he added. “The move towards a sustainable and green economy is developing faster than anticipated, and we want to ensure that we are part of that shift.”

Understandably, there’s much to keep the 44-year-old up late into the night. “I am a worrier, an over-thinker,” Lee admitted with a laugh. “I constantly worry about the ever-changing business environment, and I’m always turning over in mind all the “what ifs”.”

“But I have learnt to take it much easier now. If turning around the company didn’t floor me then, there’s very little that would kill me now. We just have to face each problem, and solve it one step at a time. I always remind myself that no matter how tough the situation may appear to be, with perseverance and hard work, we can still get through it,” he added.

Lee has two daughters and a son, aged six to 20. The values that he wants to impart to his children include honesty and sheer grit.

“Integrity is one of the key reasons our investors were willing to put their money with Marco Polo Marine - when they invested, they invested in me and my team,” Lee said.

“Likewise, without determination, we would not be here today. I always tell my kids, never be scared of what is ahead, just do it, and when you need to make a decision, just make it. If it doesn’t work out, keep at it, work at it, until it does - these should be your life’s values.” Marco Polo Marine Ltd

Listed on SGX Mainboard since 2007, Marco Polo Marine is an integrated marine logistics company, which has expanded to become a reputable player in the region. The Group’s ship chartering business provides Offshore Supply Vessels (OSVs) as well as tugboats and barges, which are deployed in regional waters for its customers in the offshore oil and gas, mining, commodities, construction and infrastructure sectors. The Group’s shipyard business undertakes shipbuilding and maintenance as well as repair, outfitting and conversion services in Batam, Indonesia.

The company website is: <a href="http://www.marcopolomarine.com.sg">www.marcopolomarine.com.sg</a> 
Click <a href="https://www.sgx.com/securities/equities/5LY">here </a>for the company's StockFacts page. 
For the year ended 30 September 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/QQYC4T8CH6OZ2TJB/640673_MPML-%20FY2020%20Results%20Announcement.pdf">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://www.sgx.com/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    MPM-CEO


It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead, despite overwhelming odds.

The Chief Executive Officer of SGX-listed Marco Polo Marine Ltd struggled for many months to keep his marine logistics company afloat, amidst a protracted downturn in the oil and gas industry that began with plunging crude prices in mid-2015.

“Those days were the toughest I had ever encountered,” Lee recalled. “Everything crumbled when oil prices collapsed. Most of my peers in the industry went belly-up because funding from the banks evaporated. If we had also thrown in the towel, all our stakeholders, employees, and subcontractors would have suffered, so we chose the hardest route, which is to try and save the company instead.”

Lee spent nearly a year looking for investors and liquidity sources to shore up Marco Polo. In November 2017, he found nine new investors who pooled together S$60 million in rescue financing for the Group. Apricot Capital, Yanlord, Penguin International, Soilbuild, Goldbell, and Oxley were some of the companies named in association with the equity injection deal.

“When we were searching for investors, I visited 150 people, and was rejected 141 times. The process of knocking on every single door - one after another - wasn’t an easy one,” he admitted.

At the end of the day, it was all about staying the course. “As cliched as it may sound, I really learnt what perseverance, stamina and commitment means,” he added. “It all boils down to a ‘never say die’ attitude.”

Four years on, following a massive debt restructuring and refinancing exercise, Marco Polo has cleaned up its balance sheet, and swung from a net debt to a net cash position. As at 30 September 2020, net debt to equity was a negative 14%, while cash and cash equivalents stood at S$13.6 million.

“That period was quite a rollercoaster ride, and now, the Group is finally out of the woods,” Lee said.

“Today, while oil and gas remains our bread and butter, we’re actively expanding our business ventures, and focused on transitioning into the renewable energy sector. This is a fledgling industry with huge opportunities, as countries and organisations increasingly turn to green energy sources. This augurs well for our growth prospects.”

Post-Restructuring Pivot

Listed on the then SGX Sesdaq in 2007 and migrated to the Mainboard in 2009, Marco Polo Marine principally engages in shipping and shipyard operations. Its shipping business revolves around the chartering of Offshore Supply Vessels (OSVs), which comprise Anchor Handling Tug Supply (AHTS) vessels for deployment in regional waters, as well as chartering of tugboats and barges by customers engaged in the mining, commodities, construction, infrastructure and land reclamation industries.

The shipyard operations focus on shipbuilding as well as ship maintenance, repair, outfitting and conversion services, carried out in its shipyard in Batam, Indonesia. Occupying a total land area of about 34 hectares with a seafront of approximately 650 meters, the shipyard also houses three dry docks, boosting the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.

Tapping on this core expertise, Marco Polo is pivoting to the renewables sector, providing customised solutions in the chartering, development, fabrication, and construction of bespoke renewable energy assets for its customers.

In particular, the Group is actively pursuing contracts for the construction of offshore wind farm vessels in the region. Although the specifications are different from those used in oil and gas exploration projects, vessels can be deployed to support certain parts of the wind farm installation and construction, without additional capital expenditure.

“Offshore wind farms are low-hanging fruit in the region - there is a lot of potential for the construction and installation of such projects in Taiwan and many opportunities in countries like South Korea, Japan and Vietnam,” Lee said.

Analysts point out that the offshore wind as well as oil and gas industries share technologies and elements of their supply chains. The International Energy Agency (IEA) estimates that 40% of the full-lifetime costs of an offshore wind project, including construction, has significant synergies with the offshore oil and gas sector.

“The burgeoning offshore wind energy industry in Asia is in its nascent stage, where structures are still installed in shallow waters with depths of up to 50-60 metres. This presents a tremendous area of opportunity for Marco Polo Marine, whose fleet specialises in those depths,” UOB-Kay Hian said in a company report published in August last year.

“Of particular interest is the Taiwan offshore wind market, one of the fastest growing in the world - the government targets to produce 15.5 gigawatts of electricity through offshore wind by 2035, making it the most sought-after destination for the world’s top offshore wind developers as they seek a foothold in Asia,” it added.

Green Economy Focus

Meanwhile, Marco Polo continues to grapple with a number of challenges, not the least of which is weaker oil demand due to the global downturn following COVID-19. Oil prices fell dramatically in the early stages of the pandemic, and have only partially recovered to pre-crisis levels.

For its ship chartering business, the Group will step up marketing efforts and explore additional revenue sources by going beyond Southeast Asia, although the success of such efforts ultimately depends on containment of the pandemic. Utilisation of its tugboats and barges is expected to improve as construction activity in Singapore progressively resumes. As for the shipyard division, it will focus on securing ship repair and maintenance orders from regional ship owners.

One saving grace is that the COVID-19 has brought sustainability and clean energy sources into even greater focus, Lee noted.

“Investors have shied away from traditional coal projects and a lot of liquidity has poured into renewables - this has picked up during the pandemic,” he added. “The move towards a sustainable and green economy is developing faster than anticipated, and we want to ensure that we are part of that shift.”

Understandably, there’s much to keep the 44-year-old up late into the night. “I am a worrier, an over-thinker,” Lee admitted with a laugh. “I constantly worry about the ever-changing business environment, and I’m always turning over in mind all the “what ifs”.”

“But I have learnt to take it much easier now. If turning around the company didn’t floor me then, there’s very little that would kill me now. We just have to face each problem, and solve it one step at a time. I always remind myself that no matter how tough the situation may appear to be, with perseverance and hard work, we can still get through it,” he added.

Lee has two daughters and a son, aged six to 20. The values that he wants to impart to his children include honesty and sheer grit.

“Integrity is one of the key reasons our investors were willing to put their money with Marco Polo Marine - when they invested, they invested in me and my team,” Lee said.

“Likewise, without determination, we would not be here today. I always tell my kids, never be scared of what is ahead, just do it, and when you need to make a decision, just make it. If it doesn’t work out, keep at it, work at it, until it does - these should be your life’s values.”   Marco Polo Marine Ltd

Listed on SGX Mainboard since 2007, Marco Polo Marine is an integrated marine logistics company, which has expanded to become a reputable player in the region. The Group’s ship chartering business provides Offshore Supply Vessels (OSVs) as well as tugboats and barges, which are deployed in regional waters for its customers in the offshore oil and gas, mining, commodities, construction and infrastructure sectors. The Group’s shipyard business undertakes shipbuilding and maintenance as well as repair, outfitting and conversion services in Batam, Indonesia.

The company website is: www.marcopolomarine.com.sg  
Click here for the company's StockFacts page.  
For the year ended 30 September 2020 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Marco Polo Marine Turns Tide, Steers into New Chapter

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-240'>Sunac China Holdings</a></li><li><a href='#lucror-entity-14152'>Yanlord Land</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Sunac China HoldingsYanlord Land

Morning Views Asia: Sunac China Holdings, Yanlord Land

Singapore

Yanlord Land Group Ltd is a real estate development company. The Company develops high-end residential property projects in the Peoples Republic of China.

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Yanlord Land (YLLG SP)

Asia HY Trade Book - April 2021 - Lucror Analytics

The Asia HY Trade Book for the month of April includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

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Morning Views Asia: China SCE, Hopson Development, Indika Energy

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

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Asia HY Monthly - Chinese Property Update (2021) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Chinese property sector, including operational trends and regulatory...

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Marco Polo Marine Turns Tide, Steers into New Chapter

It was during some of the darkest days in his entrepreneurial journey that Sean Lee learnt what it takes to forge ahead,...

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Morning Views Asia: Sunac China Holdings, Yanlord Land

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

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