Senior Credit Analyst, Lucror Analytics

Trung Nguyen

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 our view, Indika Energy's 9M/23 results were weaker than expected due to a sharp decline in Kideco's production and sales volume in Q3, lower-than-expected profitability at Kideco (which accounts for 90% of Indika's EBITDA) and negative OCF, which came as a surprise. The balance sheet turned to a net debt position, after a few quarters of net cash. Liquidity remains sound, with a large (albeit fast shrinking) cash position. OCF and FCF were negative, which was surprising as Indika has previously managed to generate positive FCF even when coal prices were lower than current levels. The last time the company generated negative FCF was in 2015, during a major coal downturn. We believe that the negative OCF may be due to the new businesses, which are ramping up. Indika's key business strategy in the medium term is to diversify away from and reduce its reliance on coal-related activities, with the company aiming to derive 50% of its revenue from non-coal sources by 2025. The new businesses include a gold mine, renewable energy solutions (mainly solar power), electric scooters and several digital technology businesses.

  In our view, Indika Energy's 9M/23 results were weaker than expected due to a sharp decline in Kideco's production and sales volume in Q3, lower-than-expected profitability at Kideco (which accounts for 90% of Indika's EBITDA) and negative OCF, which came as a surprise. The balance sheet turned to a net debt position, after a few quarters of net cash. Liquidity remains sound, with a large (albeit fast shrinking) cash position.   OCF and FCF were negative, which was surprising as Indika has previously managed to generate positive FCF even when coal prices were lower than current levels. The last time the company generated negative FCF was in 2015, during a major coal downturn. We believe that the negative OCF may be due to the new businesses, which are ramping up. Indika's key business strategy in the medium term is to diversify away from and reduce its reliance on coal-related activities, with the company aiming to derive 50% of its revenue from non-coal sources by 2025. The new businesses include a gold mine, renewable energy solutions (mainly solar power), electric scooters and several digital technology businesses. 

Indika Energy - Earnings Flash - 9M FY 2023 Results - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Indika Energy’s ESG as "Adequate", in line with its Environmental, Social and Governance scores. 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 view Indika Energy’s ESG as "Adequate", in line with its Environmental, Social and Governance scores. Controversies are "Immaterial" and Disclosure is “Adequate”. 

Indika Energy - ESG Report - Lucror Analytics

Leonard Law, CFA

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/adani-green-energy-ltd' target='_blank' rel='noopener'>Adani Green Energy</a></li><li><a href='/entities/vedanta-resources-ltd' target='_blank' rel='noopener'>Vedanta Resources</a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/geely-automobile-holdings-ltd' target='_blank' rel='noopener'>Geely Auto</a></li><li><a href='/entities/first-pacific-co-ltd' target='_blank' rel='noopener'>First Pacific Co</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Adani Green EnergyVedanta ResourcesChina Jinmao HoldingsGeely AutoFirst Pacific Coand more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/medco-energi-internasional-tbk-pt' target='_blank' rel='noopener'>Medco Energi</a></li><li><a href='/entities/nagacorp-ltd' target='_blank' rel='noopener'>NagaCorp Ltd</a></li><li><a href='/entities/china-vanke-co-ltd' target='_blank' rel='noopener'>China Vanke </a></li><li><a href='/entities/lippo-malls-indonesia-retail-trust' target='_blank' rel='noopener'>Lippo Malls Indonesia Retail Trust</a></li><li><a href='/entities/tata-motors-ltd' target='_blank' rel='noopener'>Tata Motors Ltd</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Medco EnergiNagaCorp LtdChina Vanke Lippo Malls Indonesia Retail TrustTata Motors Ltdand more...

Adani Ports & Special Economic Zone / Credit

Adani Ports & Special Economic Zone (ADSEZ IN)

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/shui-on-land-ltd' target='_blank' rel='noopener'>Shui On Land</a></li><li><a href='/entities/seazen' target='_blank' rel='noopener'>Seazen (Formerly Future Land)</a></li><li><a href='/entities/yuexiu-property-co-ltd' target='_blank' rel='noopener'>Yuexiu Property </a></li><li><a href='/entities/china-hongqiao-group-ltd' target='_blank' rel='noopener'>China Hongqiao</a></li><li><a href='/entities/longfor-properties' target='_blank' rel='noopener'>Longfor Properties</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Shui On LandSeazen (Formerly Future Land)Yuexiu Property China HongqiaoLongfor Propertiesand more...

Indonesia

Indika Energy is an integrated Indonesian energy company providing solutions across energy resources, services, and infrastructure. Its energy resources business focuses on coal exploration, production, and processing, while its energy services segment offers engineering, procurement, construction, operations, and maintenance for various energy sectors. The company also handles mining transportation, logistics, and electricity generation through its energy infrastructure business. Indika Energy is headquartered in Jakarta, Indonesia, and was founded in 2000.

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Indika Energy (INDY IJ)

Indika Energy - Earnings Flash - 9M FY 2023 Results - Lucror Analytics

In our view, Indika Energy's 9M/23 results were weaker than expected due to a sharp decline in Kideco's production and sales volume in Q3,...

Lucror Analytics

Indika Energy - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Indika Energy’s ESG as...

Lucror Analytics

Weekly Wrap - 27 Oct 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

Weekly Wrap - 20 Oct 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

Weekly Wrap - 13 Oct 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

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