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 January 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 January 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 - January 2021 - Lucror Analytics

This month, we review the developments of 2020, an extraordinary year from an investor’s perspective, and give our outlook for the year ahead.  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.

  This month, we review the developments of 2020, an extraordinary year from an investor’s perspective, and give our outlook for the year ahead.    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 - 2020 In Review And 2021 Outlook - Lucror Analytics

The Asia HY Trade Book for the month of December 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 December 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 - December 2020 - Lucror Analytics

Asia Fixed Income Analyst

Derek Silva

Rising aluminum prices, a fresh equity top-up fundraising, a strong position as one of the world’s biggest aluminium producers, and still yielding over 10% for short-dated paper. What’s not to love about China Hongqiao’s bonds?
What’s not so lovely about Hongqiao (bond ticker: HONGQI) is the bumpy ride that bond investors have suffered from several significant 5-10 point drops over the years. That’s not unusual for equity investors, but it is for bonds, particularly when they’re short-dated and issued by a global industrial powerhouse. The issuer has endured negative headlines from regulators, environmental controversies and short-selling research firms.
The closest direct peer is Chalco but it is IG-rated and lower yielding due to State ownership. Another industrial comparable would be Yingde Gases, but its bonds are trading with a low yield-to-call and no upside left due to much stronger fundamentals. One would expect a company with Hongqiao’s scale, vertical integration and top-quartile position in the cost curve to be IG rated by now, but these factors have yet to translate to consistently strong free cash flow and deleveraging.
So, while Asia credit is gaining more positive attention now and the search for yield is stronger than ever, a 10% yield should be very tempting for both the 2022 and 2023 maturities. But when it comes to Hongqiao’s bonds, it’s always better to buy on the dip, because there’s often a dip with this issuer.

Rising aluminum prices, a fresh equity top-up fundraising, a strong position as one of the world’s biggest aluminium producers, and still yielding over 10% for short-dated paper. What’s not to love about China Hongqiao’s bonds?
What’s not so lovely about Hongqiao (bond ticker: HONGQI) is the bumpy ride that bond investors have suffered from several significant 5-10 point drops over the years. That’s not unusual for equity investors, but it is for bonds, particularly when they’re short-dated and issued by a global industrial powerhouse. The issuer has endured negative headlines from regulators, environmental controversies and short-selling research firms.
The closest direct peer is Chalco but it is IG-rated and lower yielding due to State ownership. Another industrial comparable would be Yingde Gases, but its bonds are trading with a low yield-to-call and no upside left due to much stronger fundamentals. One would expect a company with Hongqiao’s scale, vertical integration and top-quartile position in the cost curve to be IG rated by now, but these factors have yet to translate to consistently strong free cash flow and deleveraging.
So, while Asia credit is gaining more positive attention now and the search for yield is stronger than ever, a 10% yield should be very tempting for both the 2022 and 2023 maturities. But when it comes to Hongqiao’s bonds, it’s always better to buy on the dip, because there’s often a dip with this issuer.

China Hongqiao: A No-Brainer at 10% Yield? Not if You Can Wait for the Dip

In this month’s “In-Focus” section, we provide an update on the Macau gaming sector, including our market outlook, concession renewals and a peer comparison of the four companies 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 Macau gaming sector, including our market outlook, concession renewals and a peer comparison of the four companies 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 - Macau Gaming Update - Lucror Analytics

China

China Hongqiao Group Ltd. manufactures aluminum products. The Company's aluminum products consist of molten aluminum alloy, aluminum alloy ingots and aluminum busbars.

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China Hongqiao (1378 HK)

Asia HY Trade Book - January 2021 - Lucror Analytics

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

Lucror Analytics

Asia HY Monthly - 2020 In Review And 2021 Outlook - Lucror Analytics

This month, we review the developments of 2020, an extraordinary year from an investor’s perspective, and give our outlook for the year ahead. ...

Lucror Analytics

Asia HY Trade Book - December 2020 - Lucror Analytics

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

Lucror Analytics

China Hongqiao: A No-Brainer at 10% Yield? Not if You Can Wait for the Dip

A 10% yield should be tempting for short-dated bonds from an industry giant. But when it comes to Hongqiao’s bonds, it’s always better to buy on...

Derek Silva

Asia HY Monthly - Macau Gaming Update - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Macau gaming sector, including our market outlook, concession renewals and a peer...

Lucror Analytics

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52-week Range

Market Cap (USDm)

P/E

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