Credit

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.

• Meituan

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.

• Vista Land & Lifescapes

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.

• Adani Green Energy

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.

• Anton Oilfield
• Greentown China

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 Jinmao Holdings
• Yuexiu Property

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 Vanke
• Melco Resorts and Entertainment (Philippines)

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.

• Tata Motors ADR
• Xiaomi Corp

Melco Resorts and Entertainment (MLCO) announced yesterday that it is planning to issue USD 500 mn in 8NC3 notes. In addition, subsidiary Studio City has initiated a tender offer to repurchase up to USD 100 mn of the STCITY 6.0 ’25s. We view positively MLCO’s proposed bond issuance and the maturity extension of its credit facilities, as well as Studio City’s tender offer, as they demonstrate management’s proactive approach in managing the company’s debt maturities. The transactions will significantly reduce MLCO’s refinancing risk in FY 2025, as the company would have c. USD 1.5 bn of availability under its credit facilities that can be used to help repay the USD 1.0 bn MPEL 4.875 ’25s due in June 2025. Moreover, management has committed to prioritise debt reduction over dividend payments in FY 2024.

We view the price talk of 7.75-7.875% as fair.

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.

• Pakuwon Jati
• Sunny Optical Technology Group

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.

• Greentown China

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 Vanke
• Indika Energy
• Vedanta Resources

Indika Energy’s FY 2023 numbers were soft as projected, owing to lower coal prices and the impact of the new licence for 91%-owned PT Kideco Jaya Agung. While Indika’s financial risk profile deteriorated significantly, the credit metrics remained robust within the rating category. Liquidity stayed sound.

The company should have a more difficult year in FY 2024, with decreased selling prices, revenue and earnings expected. That said, we still believe Indika can generate positive FCF, given its low-cost position.

The company is set to redeem the c. USD 294 mn outstanding USD 5.875% 11/24 notes on May 3rd at par. While the redemption will be leverage neutral, we view the move as credit positive. Indika will only have the USD 2025 bonds remaining after the 2024 notes redemption, and these can be almost fully funded by the holdco’s cash position.

Medco Energi’s FY 2023 numbers were acceptable in our view. The top line and margins softened, weighed down by reduced oil & gas (O&G) selling prices and slightly lower production volumes. FCF was negative and net debt increased, owing to the acquisition of a 20% stake in two O&G blocks at Oman in December. While leverage weakened, Net Debt/EBITDA remained acceptable at 2.5x at FYE 2023.

We believe earnings may continue declining in FY 2024, as management has guided for production to decrease further (mainly driven by lower working interest at Corridor Block PSC). Still, we believe Medco can generate slightly positive FCF in FY 2024 if it does not undertake new acquisitions. Liquidity is sound, and we note positively that the company’s sizeable equity stake in copper and gold mining JV Amman Mineral Internasional (listed on IDX) would provide it with meaningful financial flexibility if needed.

We revise our LARA to “Medium Risk” from “High Risk”, considering Medco’s longer reserve life and track record of proactive debt management.

Anton Oilfield’s FY 2023 results were strong, with revenue growth accelerating to levels not registered since H1/19. The strong FCF boosted the cash balance. The company’s financial risk profile improved significantly, with Net Debt/EBITDA below 1x and healthy interest coverage ratios. Liquidity is adequate.

We expect the business’ positive momentum to continue in FY 2024. H1 is projected to be significantly better y-o-y, while H2 is anticipated to improve only marginally due to the high base effect.

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.

• Gajah Tunggal
• Rakuten
• Road King Infrastructure
• SK Hynix