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

Shui On Land's (SOL) FY 2023 results were slightly weak, in our view. Positively, the company’s rental income increased moderately, supported by contributions from new commercial assets and China’s re-opening from the pandemic. Recurring operating income from rentals and property management covered 0.8x of interest expense. In addition, the gross margin remained very strong, even as revenue from the property development segment was halved on account of lower sales and deliveries. Negatively, SOL’s net debt climbed 14% from FYE 2022, owing to lower cash collections and its acquisition of a Shanghai project in April 2023. Moreover, the company’s increased asset encumbrance would reduce its financial flexibility. Liquidity is weak, considering the thin unrestricted cash balance and substantial refinancing needs over the next 12 months. That said, the company might be able to pledge or dispose of more assets to raise cash.

  Shui On Land's (SOL) FY 2023 results were slightly weak, in our view. Positively, the company’s rental income increased moderately, supported by contributions from new commercial assets and China’s re-opening from the pandemic. Recurring operating income from rentals and property management covered 0.8x of interest expense. In addition, the gross margin remained very strong, even as revenue from the property development segment was halved on account of lower sales and deliveries.   Negatively, SOL’s net debt climbed 14% from FYE 2022, owing to lower cash collections and its acquisition of a Shanghai project in April 2023. Moreover, the company’s increased asset encumbrance would reduce its financial flexibility. Liquidity is weak, considering the thin unrestricted cash balance and substantial refinancing needs over the next 12 months. That said, the company might be able to pledge or dispose of more assets to raise cash. 

Shui On Land - Earnings Flash - FY 2023 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.<ul><li><a href='#lucror-entity-4153'>Shui On Land</a></li><li><a href='#lucror-entity-13363'>Sunny Optical Technology Group</a></li><li><a href='#lucror-entity-22202'>Vedanta Resources</a></li><li><a href='#lucror-entity-18097'>Yuexiu Property </a></li></ul>

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.Shui On LandSunny Optical Technology GroupVedanta ResourcesYuexiu Property 

Morning Views Asia: Shui On Land, Sunny Optical Technology Group, Vedanta Resources, Yuexiu Property  

Shui On Land's (SOL) H1/23 results were acceptable in our view, as the company reported improved revenue recognition from property sales and largely stable rental income. SOL's operations remained strong, with robust demand for its project launches. Still, management retained its guidance for a 52% y-o-y decline in FY 2023 contracted sales, largely due to the timing of sale launches. Negatively, net debt climbed 8% from FYE 2022, as the company acquired a project in Shanghai during April. SOL has tight liquidity. That said, it will likely have sufficient resources to repay the USD 500 mn bond coming due in November 2023. The company does not appear to be in immediate financial distress overall, despite negative news about its bondholder identification exercise last month.

  Shui On Land's (SOL) H1/23 results were acceptable in our view, as the company reported improved revenue recognition from property sales and largely stable rental income. SOL's operations remained strong, with robust demand for its project launches. Still, management retained its guidance for a 52% y-o-y decline in FY 2023 contracted sales, largely due to the timing of sale launches. Negatively, net debt climbed 8% from FYE 2022, as the company acquired a project in Shanghai during April.   SOL has tight liquidity. That said, it will likely have sufficient resources to repay the USD 500 mn bond coming due in November 2023. The company does not appear to be in immediate financial distress overall, despite negative news about its bondholder identification exercise last month. 

Shui On Land - Earnings Flash - H1 FY 2023 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.<ul><li><a href='#lucror-entity-16010'>Agung Podomoro Land</a></li><li><a href='#lucror-entity-4153'>Shui On Land</a></li></ul>

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.Agung Podomoro LandShui On Land

Morning Views Asia: Agung Podomoro Land, Shui On Land

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

  The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days. 

Chinese Property Weekly - 11 March 2022 - Lucror Analytics

China

Shui On Land Limited engages principally in the development, sale, leasing, management and ownership of residential, office, retail, entertainment and cultural properties in the PRC.

Shui On Land (272 HK)

Shui On Land - Earnings Flash - FY 2023 Results - Lucror Analytics

Shui On Land's (SOL) FY 2023 results were slightly weak, in our view. Positively, the company’s rental income increased moderately, supported by...

Lucror Analytics

Morning Views Asia: Shui On Land, Sunny Optical Technology Group, Vedanta Resources, Yuexiu Property

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Shui On Land - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

Shui On Land's (SOL) H1/23 results were acceptable in our view, as the company reported improved revenue recognition from property sales and...

Lucror Analytics

Morning Views Asia: Agung Podomoro Land, Shui On Land

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Chinese Property Weekly - 11 March 2022 - Lucror Analytics

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments,...

Lucror Analytics