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

<ul>
<li>We believe that New World Development's (NWD) focus for the proposed exchange offers is to reduce its outstanding debt, mainly by restructuring the existing perps.</li>
<li>Hence, the exercise, if completed, would be credit positive for the company.</li>
<li>This would in turn support the prices of the existing straight bonds.</li>
</ul>


We believe that New World Development's (NWD) focus for the proposed exchange offers is to reduce its outstanding debt, mainly by restructuring the existing perps.
Hence, the exercise, if completed, would be credit positive for the company.
This would in turn support the prices of the existing straight bonds.


New World Development - Event Flash - Exchange Offers For All USD Perps And Bonds - Lucror Analytics

Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>New World announced FY25 results, market reaction was initially negative, due to losses to shareholders.  Stock was down 10% post open but rebounded quickly to recover all the losses</li>
<li>However, we think the market has neglected the other positives: strong contract sales, resilient IP earnings, improved total debt, stabilized gearing and lower borrow cost</li>
<li>Market is forward-looking, we think NWD, as a leveraged play, will benefit the most in rate cut cycle.  At current valuation (0.12x PB) – we continue to stay bullish</li>
</ul>


New World announced FY25 results, market reaction was initially negative, due to losses to shareholders.  Stock was down 10% post open but rebounded quickly to recover all the losses
However, we think the market has neglected the other positives: strong contract sales, resilient IP earnings, improved total debt, stabilized gearing and lower borrow cost
Market is forward-looking, we think NWD, as a leveraged play, will benefit the most in rate cut cycle.  At current valuation (0.12x PB) – we continue to stay bullish


A Contrarian View on New World: Market Is Forward-Looking, Bet on Leveraged Play in Rate Cut Cycle

<ul>
<li>New World Development's (NWD) FY 2024-25 results were weak, with the company reporting another large net loss of HKD 16.3 bn (after the HKD 19.7 bn loss in FY 2023-24), mainly driven by impairment losses.</li>
<li>Underlying business performance was also soft, as core operating profit (excluding one-off items) fell 13% y-o-y.</li>
<li>That said, OCF was strong and FCF was positive. This was supported by higher property deliveries in Hong Kong, lower capex (for land and construction) and G&amp;A expenses, as well as the stoppage of dividend payments and perpetual distributions.</li>
</ul>


New World Development's (NWD) FY 2024-25 results were weak, with the company reporting another large net loss of HKD 16.3 bn (after the HKD 19.7 bn loss in FY 2023-24), mainly driven by impairment losses.
Underlying business performance was also soft, as core operating profit (excluding one-off items) fell 13% y-o-y.
That said, OCF was strong and FCF was positive. This was supported by higher property deliveries in Hong Kong, lower capex (for land and construction) and G&amp;A expenses, as well as the stoppage of dividend payments and perpetual distributions.


New World Development - Earnings Flash - FY 2024-25 Results - Lucror Analytics

<ul>
<li>The Fed announced a 25bps rate cut, which is largely anticipated by the market.  The SEP median estimate indicates 2 more cuts in 2025</li>
<li>Regarding HK policy address, there are no meaningful positive surprise related to the property market.  It highlights the importance of Northern Metropolis development, and improving home ownership, and talent admission</li>
<li>Investors should see-through these and focus on big picture: macro developments, monetary policy, and sector fundamentals.  Pick company with attractive valuation and catalysts: NWD, Link REIT, CICT, COLI, VNET, GDS</li>
</ul>


The Fed announced a 25bps rate cut, which is largely anticipated by the market.  The SEP median estimate indicates 2 more cuts in 2025
Regarding HK policy address, there are no meaningful positive surprise related to the property market.  It highlights the importance of Northern Metropolis development, and improving home ownership, and talent admission
Investors should see-through these and focus on big picture: macro developments, monetary policy, and sector fundamentals.  Pick company with attractive valuation and catalysts: NWD, Link REIT, CICT, COLI, VNET, GDS


RE Stock Implications from Fed's Rate Cut and HK PA: Focus on Big Picture, Macro and Sector Drivers

Trung Nguyen

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: Greenko Energy, New World Development</li>
<li>UST yields fell 2-3 bps yesterday, following the release of weaker than expected November ADP payrolls data. The yield on the 2Y and 10Y UST declined 2 bps to 3.49% and 4.06%, respectively. Equities rose, as the labour market slowdown reinforced market expectations for a Fed rate cut this month. The S&amp;P 500 advanced 0.3% to 6,850, while the Nasdaq was up 0.2% at 23,454.</li>
<li>In the US, the ADP employment report showed that private-sector payrolls declined by 32 k in November (10 k e / 47 k revised p), with payrolls having fallen in four of the past six months. Hiring has been choppy of late, as employers weather cautious consumers and an uncertain macroeconomic environment, according to ADP chief economist Nela Richardson. While the November slowdown was broad-based, it was led by a pullback among small businesses.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: Greenko Energy, New World Development
UST yields fell 2-3 bps yesterday, following the release of weaker than expected November ADP payrolls data. The yield on the 2Y and 10Y UST declined 2 bps to 3.49% and 4.06%, respectively. Equities rose, as the labour market slowdown reinforced market expectations for a Fed rate cut this month. The S&amp;P 500 advanced 0.3% to 6,850, while the Nasdaq was up 0.2% at 23,454.
In the US, the ADP employment report showed that private-sector payrolls declined by 32 k in November (10 k e / 47 k revised p), with payrolls having fallen in four of the past six months. Hiring has been choppy of late, as employers weather cautious consumers and an uncertain macroeconomic environment, according to ADP chief economist Nela Richardson. While the November slowdown was broad-based, it was led by a pullback among small businesses.


Hong Kong

New World Development Company Limited, through its subsidiaries, develops and invests in properties, provides contracting services, property management, and transportation services.  The Company also operates infrastructure business, telecommunication services, department stores, hotels and restaurants, and media and technology business.

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New World Development (17 HK)

New World Development - Event Flash - Exchange Offers For All USD Perps And Bonds - Lucror Analytics

We believe that New World Development's (NWD) focus for the proposed exchange offers is to reduce its outstanding debt, mainly by restructuring...

Lucror Analytics

A Contrarian View on New World: Market Is Forward-Looking, Bet on Leveraged Play in Rate Cut Cycle

After FY25 results, NWD was down 10% post Monday's open but recovered all the losses. We are forward looking and think the worst is behind us -...

Jacob Cheng

New World Development - Earnings Flash - FY 2024-25 Results - Lucror Analytics

New World Development's (NWD) FY 2024-25 results were weak, with the company reporting another large net loss of HKD 16.3 bn (after the HKD...

Lucror Analytics

RE Stock Implications from Fed's Rate Cut and HK PA: Focus on Big Picture, Macro and Sector Drivers

Investors should see through Fed's 25bps rate cut and HK's Policy Address, and focus on macro development, geopolitical risks, as well as sector...

Jacob Cheng

Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: Greenko Energy, New World Development

Lucror Analytics

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