Daily Brief Credit: West China Cement – Earnings Flash – FY 2022 Results – Lucror Analytics and more

West China Cement’s (WCC) FY 2022 results were overall acceptable. The company reported slightly weaker earnings for its core business in Mainland China, as lower sales volumes (amid COVID-19-related disruptions and the subdued real estate sector) and increased raw material costs more than offset surprisingly positive ASP growth.

Importantly, WCC’s expansion in Africa is taking shape, as its plant in Mozambique has ramped up quickly and achieved high capacity utilisation in the first two years of operations. The company’s plants in Africa enjoy substantially higher ASP than those in China, which should support the overall gross margin.

We expect WCC’s FCF to remain deeply negative in FY 2023, which will lead to a further weakening of its net leverage (2.6x at FYE 2022). We believe FCF may turn positive in FY 2024, when the bulk of the company’s new projects in Africa are due to complete and commence operations.

• Established in 1946, Turkiye Garanti Bank (Garanti) is Turkey’s second-largest private bank.
• As of June, 30 2017, it reported consolidated assets of TRY 335,942 MM, aided by a pioneering position in all lines of business by pursuing a profitable and sustainable growth strategy.
• Garanti is an integrated financial services group that operates in the corporate, commercial, SME, payment systems, retail, private and investment banking sectors, along with its subsidiaries in pension and life insurance, leasing, factoring, brokerage, and asset management.

• Established in 1993 and headquartered in Cairo (Egypt), the African Export-Import Bank (“AFREXI”) is a sub-regional Multilateral Development Bank (MDB) that was established by its then 27 member states (now 44 countries) to promote intra-African and extra-African trade.
• The bank is universally recognised as an MDB under Article 102 of the United Nations Charter and enjoys supranational status in all its member states.
• Being an MDB accords AFREXI certain rights and privileges not accorded to normal financial institutions within its member countries.

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.

• ENN Natural Gas
• Japfa Comfeed Indonesia
• Vedanta Resources

• IQVIA Holdings is an global healthcare-tech major providing services to the clinical research and health information technology sectors.
• In partnership with Tasso, they have launched the first self-collection safety lab panel for clinical trial participants in the United States, enhancing their decentralized clinical trial capabilities.
• Our focus is on analyzing the financial strength and the debt servicing capability of the company and the analysis does not differentiate among debt instruments.

• Ultrapar is one of the largest Brazilian companies (USD 12.5bn market cap) with almost 80 years of history and leading positions in the markets in which it operates.
• The company is involved in the LPG (liquid petroleum gas) and fuel distribution, operation of a drugstore chain, the production of ethylene oxide and its derivatives and liquid bulk storage services.
• Its business mix provides stable cash flows as it balances resilient businesses such as the sale of LPG for residential use and fuels for light vehicles.

• This is our first report on Martin Marietta Materials, a major global manufacturer of heavy construction materials and aggregates.
• As pricing growth dramatically accelerated, bad weather and a number of large Martin Marietta geographies had a negative impact on product delivery.
• Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.

• Roper Technologies is a diversified software and tech investment player.
• The company makes pertinent investments in technology companies with a high base of cash and negative working capital with the objective of maximizing the returns on the capital employed.
• Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.