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.

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess China Vanke's ESG as "Adequate". The company has "Adequate" scores for the Social and Governance pillars, and a "Weak" score for the Environmental pillar. 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 China Vanke's ESG as "Adequate". The company has "Adequate" scores for the Social and Governance pillars, and a "Weak" score for the Environmental pillar. Controversies are "Immaterial" and Disclosure is "Adequate". 

China Vanke - ESG Report - Lucror Analytics

Credit

We view China Vanke as "Low Risk" on the LARA scale, given the company's: [1] leading market position in terms of sales and branding; [2] sound financial profile; and [3] diversified geographical coverage. Vanke is transitioning to become a more diversified company, with increased exposure outside the residential project sector and higher participation in the "Rail+Property" development model. Furthermore, the company is able to acquire land at lower cost amid the current bleak environment, and has lower financing costs due to its ties to the state. Our fundamental Credit Bias on Vanke is "Stable", given its adequate liquidity and sound credit metrics. We expect the company to have good access to funding, thanks to its status as a state-owned enterprise. That said, negative sentiment in the industry could weigh on Vanke's performance.

 We view China Vanke as "Low Risk" on the LARA scale, given the company's: [1] leading market position in terms of sales and branding; [2] sound financial profile; and [3] diversified geographical coverage. Vanke is transitioning to become a more diversified company, with increased exposure outside the residential project sector and higher participation in the "Rail+Property" development model. Furthermore, the company is able to acquire land at lower cost amid the current bleak environment, and has lower financing costs due to its ties to the state.  Our fundamental Credit Bias on Vanke is "Stable", given its adequate liquidity and sound credit metrics. We expect the company to have good access to funding, thanks to its status as a state-owned enterprise. That said, negative sentiment in the industry could weigh on Vanke's performance.

China Vanke - Tear Sheet - Lucror Analytics

Equity Research in HK and Mainland China

Li Tang

Thematic (Sector/Industry)

<ul>
<li>Following the repeated calls for stability of the economy and the housing market, local governments are stepping up support.</li>
<li>More cities cut the down-payment ratio for the first home buyers</li>
<li>In 2022 we expect a nuanced policy response to the downturn in the housing market:</li>
</ul>


Following the repeated calls for stability of the economy and the housing market, local governments are stepping up support.
More cities cut the down-payment ratio for the first home buyers
In 2022 we expect a nuanced policy response to the downturn in the housing market:


<ul>
<li>Big six state-owned banks cut mortgage rates in Guangzhou city</li>
<li>More cities have seen new home prices rise, according to data from the NBS report</li>
<li>Some cities cut downpayment ratios for the first home buyers</li>
</ul>


Big six state-owned banks cut mortgage rates in Guangzhou city
More cities have seen new home prices rise, according to data from the NBS report
Some cities cut downpayment ratios for the first home buyers


Policy Flexibility May Dictate China Property Direction

<ul>
<li>Relevant government departments have reportedly issued opinions on the supervision of presales funds</li>
<li>Property lending dropped YoY in January despite adequate liquidity in last month</li>
<li>We think policy support is still inadequate and should step up in the real estate sector on the demand-side</li>
</ul>


Relevant government departments have reportedly issued opinions on the supervision of presales funds
Property lending dropped YoY in January despite adequate liquidity in last month
We think policy support is still inadequate and should step up in the real estate sector on the demand-side


China Plan Easing Rules on Presales Funds Held in Escrow

China

China Vanke Co., Ltd. operates real estate development businesses.  The Company provides housing renovation, housing loans, real estate brokerage, and other businesses. China Vanke also operates logistics, material supply, and other businesses.

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China Vanke (000002 CH)

China Vanke - ESG Report - Lucror Analytics

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

Lucror Analytics

China Vanke - Tear Sheet - Lucror Analytics

We view China Vanke as "Low Risk" on the LARA scale, given the company's: [1] leading market position in terms of sales and branding; [2] sound...

Lucror Analytics

China Cities Start Cutting Down-Payments

In terms of the investment impact, we expect the home market recovery to continue to be differentiated by region and developer

Li Tang

Policy Flexibility May Dictate China Property Direction

We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support.

Li Tang

China Plan Easing Rules on Presales Funds Held in Escrow

Recovery of the real estate sector is still reliant on the demand side, which should take longer to recover as people wait for policy support and...

Li Tang

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Market Cap (USDm)

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