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

Tata Steel has reported weak Q4 and FY 2019-20 results, partly due to a sharp slowdown in the Indian economy pre-COVID 19 and partly owing to the impact of the pandemic in Q4/19-20. The financial risk profile deteriorated significantly. Liquidity remained weak, albeit the company's cash position more than doubled q-o-q, as management focussed on liquidity to offset the negative impact of COVID-19. Q1/20-21 will likely be the weakest quarter of the financial year, due to the full impact of the lockdown.

  Tata Steel has reported weak Q4 and FY 2019-20 results, partly due to a sharp slowdown in the Indian economy pre-COVID 19 and partly owing to the impact of the pandemic in Q4/19-20. The financial risk profile deteriorated significantly. Liquidity remained weak, albeit the company's cash position more than doubled q-o-q, as management focussed on liquidity to offset the negative impact of COVID-19. Q1/20-21 will likely be the weakest quarter of the financial year, due to the full impact of the lockdown. 

Tata Steel - Earnings Flash - Q4 And FY 2019-20 Results - Lucror Analytics

Leonard Law, CFA

The Asia HY Trade Recommendations report for the month of June includes a summary of our recommendations. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Recommendations report for the month of June includes a summary of our recommendations. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Recommendations - June 2020 - 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-8205'>China South City</a></li><li><a href='#lucror-entity-20934'>Tata Steel Ltd</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.China South CityTata Steel Ltd

Morning Views Asia: China South City, Tata Steel Ltd

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-315'>Softbank Group</a></li><li><a href='#lucror-entity-20934'>Tata Steel Ltd</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.Softbank GroupTata Steel Ltd

Morning Views Asia: Softbank Group, Tata Steel Ltd

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

Inflated profits, aged assets, negative cashflow
JFE has been inflating profits by under depreciating and cashflow by underinvesting. In FY2019, it will barely breakeven and liabilities may rise by Y400bn. FY2020 will be far worse. Even before COVID, Japanese demand was falling and the steel cycle was turning down. At today’s non trough steel spreads, JFE is lossmaking and business cashflow is structurally negative. By YE FY20, JFE will have raised Y300bn plus the Y30bn of maturing bonds to fund the renewal of its over-valued, aging assets. It has listed non core assets, but debt will be over 8x EBITDA. No covenants mean debt can keep rising, but will never be repaid. Equity holders will be wiped out. SELL.

Inflated profits, aged assets, negative cashflow
JFE has been inflating profits by under depreciating and cashflow by underinvesting. In FY2019, it will barely breakeven and liabilities may rise by Y400bn. FY2020 will be far worse. Even before COVID, Japanese demand was falling and the steel cycle was turning down. At today’s non trough steel spreads, JFE is lossmaking and business cashflow is structurally negative. By YE FY20, JFE will have raised Y300bn plus the Y30bn of maturing bonds to fund the renewal of its over-valued, aging assets. It has listed non core assets, but debt will be over 8x EBITDA. No covenants mean debt can keep rising, but will never be repaid. Equity holders will be wiped out. SELL.

India

Tata Steel Ltd. is an integrated steel producer which manufactures a variety of steel products. The Company's products include steel ball bearing rings, alloy steel bearing rings, annular forgings, flanges, bearings, welded steel tubes, cold rolled strips and seamless tubes. Tata Steel also manufactures metallurgical machinery.

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Tata Steel Ltd (TATA IN)

Tata Steel - Earnings Flash - Q4 And FY 2019-20 Results - Lucror Analytics

Tata Steel has reported weak Q4 and FY 2019-20 results, partly due to a sharp slowdown in the Indian economy pre-COVID 19 and partly owing to the...

Lucror Analytics

Asia HY Trade Recommendations - June 2020 - Lucror Analytics

The Asia HY Trade Recommendations report for the month of June includes a summary of our recommendations. The report also features relative-value...

Lucror Analytics

Morning Views Asia: China South City, Tata Steel Ltd

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

Lucror Analytics

Morning Views Asia: Softbank Group, Tata Steel Ltd

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

Lucror Analytics

JFE Holdings: Off to the Scrap Heap

Inflated profits, aged assets, negative cashflow JFE has been inflating profits by under depreciating and cashflow by underinvesting. In FY2019, it...

Bucephalus Research Partnership

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