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

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-29012'>Adani Green Energy</a></li><li><a href='#lucror-entity-8258'>Japfa Comfeed Indonesia</a></li><li><a href='#lucror-entity-20844'>Medco Energi</a></li><li><a href='#lucror-entity-8550'>Pakuwon Jati</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.Adani Green EnergyJapfa Comfeed IndonesiaMedco EnergiPakuwon Jati

Morning Views Asia: Adani Green Energy, Japfa Comfeed Indonesia, Medco Energi, Pakuwon Jati

Medco Energi's FY 2023 numbers were acceptable in our view. The top line and margins softened, weighed down by reduced oil & gas (O&G) selling prices and slightly lower production volumes. FCF was negative and net debt increased, owing to the acquisition of a 20% stake in two O&G blocks at Oman in December. While leverage weakened, Net Debt/EBITDA remained acceptable at 2.5x at FYE 2023. We believe earnings may continue declining in FY 2024, as management has guided for production to decrease further (mainly driven by lower working interest at Corridor Block PSC). Still, we believe Medco can generate slightly positive FCF in FY 2024 if it does not undertake new acquisitions. Liquidity is sound, and we note positively that the company’s sizeable equity stake in copper and gold mining JV Amman Mineral Internasional (listed on IDX) would provide it with meaningful financial flexibility if needed. We revise our LARA to “Medium Risk” from “High Risk”, considering Medco’s longer reserve life and track record of proactive debt management.

  Medco Energi's FY 2023 numbers were acceptable in our view. The top line and margins softened, weighed down by reduced oil & gas (O&G) selling prices and slightly lower production volumes. FCF was negative and net debt increased, owing to the acquisition of a 20% stake in two O&G blocks at Oman in December. While leverage weakened, Net Debt/EBITDA remained acceptable at 2.5x at FYE 2023.   We believe earnings may continue declining in FY 2024, as management has guided for production to decrease further (mainly driven by lower working interest at Corridor Block PSC). Still, we believe Medco can generate slightly positive FCF in FY 2024 if it does not undertake new acquisitions. Liquidity is sound, and we note positively that the company’s sizeable equity stake in copper and gold mining JV Amman Mineral Internasional (listed on IDX) would provide it with meaningful financial flexibility if needed.   We revise our LARA to “Medium Risk” from “High Risk”, considering Medco’s longer reserve life and track record of proactive debt management. 

Medco Energi - Earnings Flash - FY 2023 Results - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Medco Energi's ESG as "Adequate", in line with its scores for the Environmental, Social and Governance pillars. Controversies are "Immaterial" and Disclosure is "Adequate".

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We assess Medco Energi's ESG as "Adequate", in line with its scores for the Environmental, Social and Governance pillars. Controversies are "Immaterial" and Disclosure is "Adequate". 

Medco Energi - ESG Report - Lucror Analytics

External broker reports(aggregated public sources), MNC Sekuritas

MNC Sekuritas

External broker reports(aggregated public sources)

MNC Sekuritas, the first wholly-owned subsidiary established by the Group back in 1989, provides a complete range of services, from equity, fixed income, investment banking to providing research to optimize clients’ investments. Thus far, the company has more than 140 points of sales with over 100,000 clients. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>The global crude oil prices showed a hike in Apr-2024 with average Brent spot price stood at USD89.0/BBL and WTI at USD84.4/BBL, respectively increasing from USD84.7/BBL and USD80.4/BBL.</li><li>This climb was mainly driven by the easing global oil inventories following OPEC’s decision to implement voluntary production cuts until 1H24, resulting in an average of 0.3mbpd global oil stocks reduction.</li><li>Concurrently, the heating geopolitical friction in Middle East amid Iran and Israel, also contributed to the global oil prices. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The global crude oil prices showed a hike in Apr-2024 with average Brent spot price stood at USD89.0/BBL and WTI at USD84.4/BBL, respectively increasing from USD84.7/BBL and USD80.4/BBL.This climb was mainly driven by the easing global oil inventories following OPEC’s decision to implement voluntary production cuts until 1H24, resulting in an average of 0.3mbpd global oil stocks reduction.Concurrently, the heating geopolitical friction in Middle East amid Iran and Israel, also contributed to the global oil prices. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Oil and Gas: Fragile Recovery: Not Out of the Red Yet

Indonesia

PT Medco Energi Internasional Tbk is an integrated energy company. The Company explores for and produces oil and gas both in Indonesia and internationally, operates gas-fired power plants in Panaran I, Batam Island, and develops renewable fuels such as Bio-fuel.

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Medco Energi (MEDC IJ)

Morning Views Asia: Adani Green Energy, Japfa Comfeed Indonesia, Medco Energi, Pakuwon Jati

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

Lucror Analytics

Medco Energi - Earnings Flash - FY 2023 Results - Lucror Analytics

Medco Energi's FY 2023 numbers were acceptable in our view. The top line and margins softened, weighed down by reduced oil & gas (O&G)...

Lucror Analytics

Medco Energi - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Medco Energi's ESG as...

Lucror Analytics

Medco Energi - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Medco Energi's ESG as...

Lucror Analytics

Oil and Gas: Fragile Recovery: Not Out of the Red Yet

The global crude oil prices showed a hike in Apr-2024 with average Brent spot price stood at USD89.0/BBL and WTI at USD84.4/BBL, respectively...

MNC Sekuritas

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