ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p>The Philippines has been of the worst-hit countries in South-East Asia by COVID-19, given its strict and lengthy lockdown. Its GDP growth declined by -16.5% in 2Q2020 versus an average growth rate of +6.4% between 2010 to 2019. Now the country is coming out of lockdown, we are seeing the first signs of recovery and look for a way to play this resurgence story. </p>
<p><a href="https://www.smartkarma.com/entities/gt-capital-holdings-inc" target="_blank" data-smartkarma-citation="entities:215:1" rel="noopener">GT Capital Holdings (GTCAP PM)</a> is an interesting proxy for post-COVID-19 recovery in the Philippines, as the distributor for Toyota vehicles in the country. It also has a controlling stake in <a href="https://www.smartkarma.com/entities/metropolitan-bank-trust" target="_blank" data-smartkarma-citation="entities:326:1" rel="noopener">Metropolitan Bank &amp; Trust (MBT PM)</a>, one of the nation's best quality banks. </p>
<p>The most recent car sales numbers from the Philippines showed a slowing decline in auto sales in September of -22% versus a -44% decline YoY for 9M2020. Passenger cars saw a lesser decline of -12% YoY in September but saw a sharp rebound MoM of +54% in that month.</p>
<p>Subsidiary <a href="https://www.smartkarma.com/entities/metropolitan-bank-trust" target="_blank" data-smartkarma-citation="entities:326:1" rel="noopener">Metropolitan Bank &amp; Trust (MBT PM)</a> continues to shift its customers to digital channels, with 79% of total transactions in 2Q2020 online versus 69% a year ago, and continues to see strong underlying growth in PPOP. </p>
<p><a href="https://www.smartkarma.com/entities/gt-capital-holdings-inc" target="_blank" data-smartkarma-citation="entities:215:1" rel="noopener">GT Capital Holdings (GTCAP PM)</a> property arm Federal Land has been increasingly successfully marketing properties by digital means, whilst AXA Philippines is already performing well with most of its policies now being sold through digital channels. </p>
<p>Its infrastructure exposure through <a href="https://www.smartkarma.com/entities/metro-pacific-investments-co" target="_blank" data-smartkarma-citation="entities:1054:1" rel="noopener">Metro Pacific Investments Co (MPI PM)</a> is also seeing a much-improved performance, with a pick up in toll-road traffic and electricity consumption. </p>
<p><a href="https://www.smartkarma.com/entities/gt-capital-holdings-inc" target="_blank" data-smartkarma-citation="entities:215:1" rel="noopener">GT Capital Holdings (GTCAP PM)</a> trades on 7.4x FY21E PER versus a 3-year average of 11.7x forward PER, and 0.5x FY2020 PBV versus a 3-year average of 1.1x PBV.  Better numbers should lead to a re-rating of the company back toward historical levels. </p>

The Philippines has been of the worst-hit countries in South-East Asia by COVID-19, given its strict and lengthy lockdown. Its GDP growth declined by -16.5% in 2Q2020 versus an average growth rate of +6.4% between 2010 to 2019. Now the country is coming out of lockdown, we are seeing the first signs of recovery and look for a way to play this resurgence story. 
GT Capital Holdings (GTCAP PM) is an interesting proxy for post-COVID-19 recovery in the Philippines, as the distributor for Toyota vehicles in the country. It also has a controlling stake in Metropolitan Bank &amp; Trust (MBT PM), one of the nation's best quality banks. 
The most recent car sales numbers from the Philippines showed a slowing decline in auto sales in September of -22% versus a -44% decline YoY for 9M2020. Passenger cars saw a lesser decline of -12% YoY in September but saw a sharp rebound MoM of +54% in that month.
Subsidiary Metropolitan Bank &amp; Trust (MBT PM) continues to shift its customers to digital channels, with 79% of total transactions in 2Q2020 online versus 69% a year ago, and continues to see strong underlying growth in PPOP. 
GT Capital Holdings (GTCAP PM) property arm Federal Land has been increasingly successfully marketing properties by digital means, whilst AXA Philippines is already performing well with most of its policies now being sold through digital channels. 
Its infrastructure exposure through Metro Pacific Investments Co (MPI PM) is also seeing a much-improved performance, with a pick up in toll-road traffic and electricity consumption. 
GT Capital Holdings (GTCAP PM) trades on 7.4x FY21E PER versus a 3-year average of 11.7x forward PER, and 0.5x FY2020 PBV versus a 3-year average of 1.1x PBV.  Better numbers should lead to a re-rating of the company back toward historical levels. 

GT Capital Holdings (GTCAP PM) - A Philippines Recovery Prospect

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Melco International Development / Event-Driven

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<p>This week in <strong>StubWorld</strong> ...</p>
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<p><a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International Development (200 HK)</a>'s 54.88% subsidiary <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts &amp; Entertainment (MLCO US)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0206/2020020601305.pdf" target="_blank" rel="noopener">announced</a> it will no longer acquire an additional 9.99% in <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a>. But the reasons behind the decision go beyond that stated.</p>
<p>Having recently acquired a 25% in <a href="https://www.smartkarma.com/entities/manila-water-co-inc" target="_blank" data-smartkarma-citation="entities:22789:1" rel="noopener">Manila Water Co (MWC PM)</a>, Enrique Razon will now take control of the water utility from <a href="https://www.smartkarma.com/entities/ayala-corporation" target="_blank" data-smartkarma-citation="entities:1474:1" rel="noopener">Ayala Corporation (AC PM)</a>.</p>
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<p>Preceding my comments on Melco and Ayala are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...


Melco International Development (200 HK)'s 54.88% subsidiary Melco Resorts &amp; Entertainment (MLCO US) announced it will no longer acquire an additional 9.99% in Crown Resorts (CWN AU). But the reasons behind the decision go beyond that stated.
Having recently acquired a 25% in Manila Water Co (MWC PM), Enrique Razon will now take control of the water utility from Ayala Corporation (AC PM).


Preceding my comments on Melco and Ayala are the weekly setup/unwind tables for Asia-Pacific Holdcos.




These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.




StubWorld: Melco Steps Back From Crown; Ayala Hands Over Control Of Manila Water

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/ayala-corporation" target="_blank" data-smartkarma-citation="entities:1474:1" rel="noopener">Ayala Corporation (AC PM)</a> trades around its one-year low discount to NAV as the Duterte administration steps up its investigation into various Ayala Group-connected industrial/utility contracts, inked under prior administrations.</p>
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<p>Preceding my comments on Ayala and <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...


Ayala Corporation (AC PM) trades around its one-year low discount to NAV as the Duterte administration steps up its investigation into various Ayala Group-connected industrial/utility contracts, inked under prior administrations.


Preceding my comments on Ayala and Ecopro Co Ltd (086520 KS) are the weekly setup/unwind tables for Asia-Pacific Holdcos.




These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.






StubWorld: Ayala Corp Under Pressure As Govt Probes Contracts

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Metro Pacific Hospital Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/metro-pacific-hospital-holdings-inc" target="_blank" data-smartkarma-citation="entities:28306:1" rel="noopener">Metro Pacific Hospital Holdings Inc (HOSP PM)</a> (MPHHI) is looking to raise about US$1.5bn in its upcoming Philippines IPO. We have previously looked at the company in:</p>
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<a href="https://www.smartkarma.com/insights/metro-pacific-hospitals-pre-ipo-review-largest-private-hospital-group-in-the-philippines" target="_blank" data-smartkarma-citation="insights:32555" rel="noopener">Metro Pacific Hospitals Pre-IPO Review - Largest Private Hospital Group in the Philippines</a> </li>
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<a href="https://www.smartkarma.com/insights/metro-pacific-hospitals-pre-ipo-review-a-closer-look-at-acquisitions-and-investments" target="_blank" data-smartkarma-citation="insights:32633" rel="noopener">Metro Pacific Hospitals Pre-IPO Review - A Closer Look at Acquisitions and Investments</a> </li>
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<p>In this insight, we share our initial thoughts on MPHHI's valuation and the assumptions we have used to derive its valuation.</p>
<p><strong>Just as we were about to publish this insight, news had hit the wire that the IPO will be postponed owing to a <a href="https://uk.reuters.com/article/us-metro-pacific-m-a-kkr/kkr-and-gic-buy-42-5-stake-in-philippines-top-hospital-chain-idUKKBN1WU00X" target="_blank" rel="noopener">US$685 investment from KKR-led consortium</a>. But, since it's a private equity investment, the deal will be back sometime and hence, we've decided to publish this insight anyways for future reference.</strong></p>

Metro Pacific Hospital Holdings Inc (HOSP PM) (MPHHI) is looking to raise about US$1.5bn in its upcoming Philippines IPO. We have previously looked at the company in:


Metro Pacific Hospitals Pre-IPO Review - Largest Private Hospital Group in the Philippines 

Metro Pacific Hospitals Pre-IPO Review - A Closer Look at Acquisitions and Investments 

In this insight, we share our initial thoughts on MPHHI's valuation and the assumptions we have used to derive its valuation.
Just as we were about to publish this insight, news had hit the wire that the IPO will be postponed owing to a US$685 investment from KKR-led consortium. But, since it's a private equity investment, the deal will be back sometime and hence, we've decided to publish this insight anyways for future reference.

Metro Pacific Hospitals Pre-IPO Review - Early Thoughts on Valuation

<p><a href="https://www.smartkarma.com/entities/metro-pacific-hospital-holdings-inc" target="_blank" data-smartkarma-citation="entities:28306:1" rel="noopener">Metro Pacific Hospital Holdings Inc (HOSP PM)</a> (MPHHI) is looking to raise about US$1.5bn in its upcoming Philippines IPO. We shared our initial thoughts on the IPO in:</p>
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<a href="https://www.smartkarma.com/insights/metro-pacific-hospitals-pre-ipo-review-largest-private-hospital-group-in-the-philippines" target="_blank" data-smartkarma-citation="insights:32555" rel="noopener">Metro Pacific Hospitals Pre-IPO Review - Largest Private Hospital Group in the Philippines</a> </li>
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<p>In this insight, we will take a closer look at the company structure, the ownership of each hospital, and the timeline of these acquisitions or investments.</p>

Metro Pacific Hospital Holdings Inc (HOSP PM) (MPHHI) is looking to raise about US$1.5bn in its upcoming Philippines IPO. We shared our initial thoughts on the IPO in:


Metro Pacific Hospitals Pre-IPO Review - Largest Private Hospital Group in the Philippines 

In this insight, we will take a closer look at the company structure, the ownership of each hospital, and the timeline of these acquisitions or investments.

Metro Pacific Hospitals Pre-IPO Review - A Closer Look at Acquisitions and Investments

Philippines

Metro Pacific Investments Corporation is an investment holding company. The Company, through its subsidiaries, provides water, sanitation and sewerage services, and also operates in real estate, infrastructure projects, toll roads, electricity distribution, hospital operations and light rail.

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Metro Pacific Investments Co (MPI PM)

GT Capital Holdings (GTCAP PM) - A Philippines Recovery Prospect

GT Capital provides high-quality, yet high beta exposure to the Philippines recovery though banking, autos, utilities, and property

Angus Mackintosh

StubWorld: Melco Steps Back From Crown; Ayala Hands Over Control Of Manila Water

This week in StubWorld ... Melco International Development (200 HK)'s 54.88% subsidiary Melco Resorts & Entertainment (MLCO US) announced it...

David Blennerhassett

StubWorld: Ayala Corp Under Pressure As Govt Probes Contracts

This week in StubWorld ... Ayala Corporation (AC PM) trades around its one-year low discount to NAV as the Duterte administration steps up its...

David Blennerhassett

Metro Pacific Hospitals Pre-IPO Review - Early Thoughts on Valuation

Metro Pacific Hospital Holdings Inc (HOSP PM) (MPHHI) is looking to raise about US$1.5bn in its upcoming Philippines IPO. We have previously looked...

Zhen Zhou, Toh

Metro Pacific Hospitals Pre-IPO Review - A Closer Look at Acquisitions and Investments

Metro Pacific Hospital Holdings Inc (HOSP PM) (MPHHI) is looking to raise about US$1.5bn in its upcoming Philippines IPO. We shared our initial...

Zhen Zhou, Toh

Price Gauge

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