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

We noted in February that the proverbial can was being kicked down the road on a number of major issues. Unfortunately, this trend continued in April, with a decision on Brexit being delayed by up to six months after the UK Parliament decided (with a one-vote margin) to extend the date for a hard exit. The other major issues still up in the air are the US-Sino trade war, the Fed’s rate policy and deleveraging in China. Interestingly, this has done little to impact investor sentiment, with the S&amp;P 500 hitting a new high during the month and Asian HY returns continuing to be positive.

We noted in February that the proverbial can was being kicked down the road on a number of major issues. Unfortunately, this trend continued in April, with a decision on Brexit being delayed by up to six months after the UK Parliament decided (with a one-vote margin) to extend the date for a hard exit. The other major issues still up in the air are the US-Sino trade war, the Fed’s rate policy and deleveraging in China. Interestingly, this has done little to impact investor sentiment, with the S&amp;P 500 hitting a new high during the month and Asian HY returns continuing to be positive.

Asia HY Monthly – Asia Ex-India 2018 Results Overview (April 2019)

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

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

	Asia HY Trade Recommendations - April 2019 - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Chinese property sector, including contracted sales trends, regulatory actions and financing conditions. We also broadly comment on the FY 2018 results for developers under our 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 contracted sales trends, regulatory actions and financing conditions. We also broadly comment on the FY 2018 results for developers under our 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 - China Property Update - Lucror Analytics

Trung Nguyen

Fosun’s financial profile weakened slightly in FY 2018, mainly on account of the increase in debt (+23% y-o-y). At FYE 2018, Debt/Capitalisation and Debt/EBITDA weakened to 55% and 7.2x, respectively (FY 2017: 54% and 5.7x). In addition, the estimated market value of the company's subsidiaries decreased 17%, owing to volatility in secondary markets. Consequently, Debt/Market Value worsened to 64% (FYE 2017: 43%). While Fosun has remained highly acquisitive, the company has also carried out various asset disposals to raise cash. During the year, Fosun carried out more than 70 investments worth CNY 28.5 bn while divesting CNY 17 bn worth of assets. In 2018, it completed the re-organisation of Yuyuan, and also listed its tourism business on the HKEX. Consequently, more than half of Fosun’s consolidated revenue are now derived from listed entities. In our view, this significantly improves the transparency of Fosun’s investment portfolio. We move to "Hold" from "Not Recommended" on the FOSUNI Notes, on account of the improved transparency. In addition, we revise our Credit Bias to "Stable" from "Negative".

   Fosun’s financial profile weakened slightly in FY 2018, mainly on account of the increase in debt (+23% y-o-y). At FYE 2018, Debt/Capitalisation and Debt/EBITDA weakened to 55% and 7.2x, respectively (FY 2017: 54% and 5.7x). In addition, the estimated market value of the company's subsidiaries decreased 17%, owing to volatility in secondary markets. Consequently, Debt/Market Value worsened to 64% (FYE 2017: 43%).    While Fosun has remained highly acquisitive, the company has also carried out various asset disposals to raise cash. During the year, Fosun carried out more than 70 investments worth CNY 28.5 bn while divesting CNY 17 bn worth of assets. In 2018, it completed the re-organisation of Yuyuan, and also listed its tourism business on the HKEX. Consequently, more than half of Fosun’s consolidated revenue are now derived from listed entities. In our view, this significantly improves the transparency of Fosun’s investment portfolio.    We move to "Hold" from "Not Recommended" on the FOSUNI Notes, on account of the improved transparency. In addition, we revise our Credit Bias to "Stable" from "Negative". 

Fosun - Earnings Flash - FY 2018 Results - 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.

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. 

Lucror Analytics - Morning Views Asia - 27 Mar 2019

China

Fosun International Limited operates diversified businesses. The Company manufactures steel, develops property, manufactures pharmaceuticals, and holds interests in retailers, financial services providers, and gold and iron mining.

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Fosun International (656 HK)

Asia HY Monthly – Asia Ex-India 2018 Results Overview (April 2019)

We noted in February that the proverbial can was being kicked down the road on a number of major issues. Unfortunately, this trend continued in...

Lucror Analytics

Asia HY Trade Recommendations - April 2019 - Lucror Analytics

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

Lucror Analytics

Asia HY Monthly - China Property Update - Lucror Analytics

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

Lucror Analytics

Fosun - Earnings Flash - FY 2018 Results - Lucror Analytics

Fosun’s financial profile weakened slightly in FY 2018, mainly on account of the increase in debt (+23% y-o-y). At FYE 2018, Debt/Capitalisation...

Lucror Analytics

Lucror Analytics - Morning Views Asia - 27 Mar 2019

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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