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

In this month’s “In-Focus” section, we provide an update on the Chinese property sector, including trends in contracted sales and operations, as well as regulatory developments. 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 trends in contracted sales and operations, as well as regulatory developments.    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 - Lucror Analytics

The Asia HY Trade Recommendations report for August 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 August 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 - August 2019 - Lucror Analytics

Trung Nguyen

We view Azure Power as “Medium Risk” on the LARA scale. We like the stable and predictable revenues and EBITDA, which are supported by: [1] a stable amount of solar radiation; [2] fixed tariffs based on long-term PPAs (25 years); and [3] minimal operating costs, as solar panels have no moving parts. However, the credit profile is weighed down by the company's high leverage, limited scale and short track record. The key risk is that the PPAs could be cancelled or re-negotiated. Our fundamental Credit Bias is “Stable”, due to the stable and predictable revenues and EBITDA. We view Azure’s corporate governance as “Moderate” on the LAGA scale, mainly owing to the reputable and diversified institutional shareholder base, experienced Board directors and public listing on the NYSE.

   We view Azure Power as “Medium Risk” on the LARA scale. We like the stable and predictable revenues and EBITDA, which are supported by: [1] a stable amount of solar radiation; [2] fixed tariffs based on long-term PPAs (25 years); and [3] minimal operating costs, as solar panels have no moving parts. However, the credit profile is weighed down by the company's high leverage, limited scale and short track record. The key risk is that the PPAs could be cancelled or re-negotiated.    Our fundamental Credit Bias is “Stable”, due to the stable and predictable revenues and EBITDA.    We view Azure’s corporate governance as “Moderate” on the LAGA scale, mainly owing to the reputable and diversified institutional shareholder base, experienced Board directors and public listing on the NYSE. 

Azure Power - Tear Sheet - Lucror Analytics

In our view, Azure Power’s Q1/19-20 results were acceptable. Positively, revenue and operating capacity rose more quickly than expected. That said, earnings growth failed to match the revenue increase, due to one-time costs related to the management changes. Debt grew faster than earnings, leading to slight deterioration in leverage. That said, we maintain our forecasts for FY 2019-20 and foresee that leverage will be stable. On the call, the new management team said it plans to reduce leverage and improve disclosures, which bodes well for creditors.

   In our view, Azure Power’s Q1/19-20 results were acceptable. Positively, revenue and operating capacity rose more quickly than expected. That said, earnings growth failed to match the revenue increase, due to one-time costs related to the management changes. Debt grew faster than earnings, leading to slight deterioration in leverage. That said, we maintain our forecasts for FY 2019-20 and foresee that leverage will be stable. On the call, the new management team said it plans to reduce leverage and improve disclosures, which bodes well for creditors. 

Azure Power - Earnings Flash - Q1 FY 2019-20 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 - 13 Aug 2019

India

Azure Power Global Limited operates as an independent solar power producer. The Company designs, constructs, maintains, and operates solar energy projects. Azure Power Global serves customers worldwide.

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Azure Power Global Ltd (AZRE US)

Asia HY Monthly - Chinese Property Update - Lucror Analytics

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

Lucror Analytics

Asia HY Trade Recommendations - August 2019 - Lucror Analytics

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

Lucror Analytics

Azure Power - Tear Sheet - Lucror Analytics

We view Azure Power as “Medium Risk” on the LARA scale. We like the stable and predictable revenues and EBITDA, which are supported by: [1] a...

Lucror Analytics

Azure Power - Earnings Flash - Q1 FY 2019-20 Results - Lucror Analytics

In our view, Azure Power’s Q1/19-20 results were acceptable. Positively, revenue and operating capacity rose more quickly than expected. That...

Lucror Analytics

Lucror Analytics - Morning Views Asia - 13 Aug 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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