Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

<a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> has not been very fortunate in the past few weeks; rising cases in Bangkok that caused the management to call off the BeerCo IPO, dampened investors' excitement on the value unlocking event. Its high debt also is another factor that its share price does not get re-rated compared to its peers. In ASEAN, <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> is trading at a slight discount to <a href="https://www.smartkarma.com/entities/saigon-beer-alcohol-beverage" target="_blank" data-smartkarma-citation="entities:23645:1" rel="noopener">Saigon Beer Alcohol Beverage (SAB VN)</a> although the latter's profitability is much higher with little debt. 
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For Asian beverage investors, there are other stocks with similar profitability profiles with lower debt and much bigger markets (North Asia) such as <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> , <a href="https://www.smartkarma.com/entities/china-resources-beer-holdings" target="_blank" data-smartkarma-citation="entities:399:1" rel="noopener">China Resources Beer Holdings (291 HK)</a> that receive more attention from investors.
 For ASEAN beverage investors, Thai Beverage is one of the bigger and more prominent beverage companies although it is not the most profitable and the debt burden has caused some investors to shun it but it should still be a valid choice especially when it is trading at a discount such as currently. 
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Thai Beverage (THBEV SP) has not been very fortunate in the past few weeks; rising cases in Bangkok that caused the management to call off the BeerCo IPO, dampened investors' excitement on the value unlocking event. Its high debt also is another factor that its share price does not get re-rated compared to its peers. In ASEAN, Thai Beverage (THBEV SP) is trading at a slight discount to Saigon Beer Alcohol Beverage (SAB VN) although the latter's profitability is much higher with little debt. 

For Asian beverage investors, there are other stocks with similar profitability profiles with lower debt and much bigger markets (North Asia) such as Tsingtao Brewery Co Ltd H (168 HK) , China Resources Beer Holdings (291 HK) that receive more attention from investors.
 For ASEAN beverage investors, Thai Beverage is one of the bigger and more prominent beverage companies although it is not the most profitable and the debt burden has caused some investors to shun it but it should still be a valid choice especially when it is trading at a discount such as currently. 


Thai Beverage (Thbev): Delayed Beer IPO and Undervaluation

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

PT Surya Citra Media Tbk / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> released results last week, which were striking in how well the company coped with months of not being able to produce new content due to COVID-19 restrictions. This year should see a recovery in its FTA TV advertising revenues but an increasingly positive impact from its digital business.
The company managed to maintain its number 1 &amp; 2  position in terms of audience share in 2020, despite playing re-runs, demonstrating the strength of its drama content.
Competitor <a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> surged ahead with the success of its drama series Iketan Cinta, which dented <a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> year-end rankings but it has started to regain share in 1Q2021. 
<a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ</a> plans to produce 300 hours of high-quality drama content in 2021 versus 110 hours in 2020, which should help to secure audience share along with more sponsored events such as concerts. 
Vidio.com continues to gain ground in terms of paying subscribers and already ranks as the number three player in terms of paying subs in Indonesia. 
The company is ahead of the curve in terms of progress in the move from analog to digital, with parallel broadcasts already being trialed.
<a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> trades on 19.0x FY21E and 15.7x FY22E PER, versus its 5-year average of 18.6x forward PER, making it look relatively attractive.

PT Surya Citra Media Tbk (SCMA IJ) released results last week, which were striking in how well the company coped with months of not being able to produce new content due to COVID-19 restrictions. This year should see a recovery in its FTA TV advertising revenues but an increasingly positive impact from its digital business.
The company managed to maintain its number 1 &amp; 2  position in terms of audience share in 2020, despite playing re-runs, demonstrating the strength of its drama content.
Competitor Media Nusantara Citra (MNCN IJ) surged ahead with the success of its drama series Iketan Cinta, which dented PT Surya Citra Media Tbk (SCMA IJ) year-end rankings but it has started to regain share in 1Q2021. 
PT Surya Citra Media Tbk (SCMA IJ plans to produce 300 hours of high-quality drama content in 2021 versus 110 hours in 2020, which should help to secure audience share along with more sponsored events such as concerts. 
Vidio.com continues to gain ground in terms of paying subscribers and already ranks as the number three player in terms of paying subs in Indonesia. 
The company is ahead of the curve in terms of progress in the move from analog to digital, with parallel broadcasts already being trialed.
PT Surya Citra Media Tbk (SCMA IJ) trades on 19.0x FY21E and 15.7x FY22E PER, versus its 5-year average of 18.6x forward PER, making it look relatively attractive.

PT Surya Citra Media Tbk (SCMA IJ) - From Analog to Digital

<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> is the best quality Multi-finance company in Indonesia and one of our highest conviction buy ideas, given the prospect of a strong recovery in new loans together with the funding in place to execute on that growth. 
The company has a focus on providing finance for used cars and other vehicles but also provides top-up financing to its existing customers with a track record at higher interest rates.
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> has a strong track record historically with ROEs historically as high as 25% and ROA at 8%, which we think can be achieved again over the next 2-3 years.
The company is targeting to grow new loans +50% this year and already has the funding in place to do so, with credit lines mainly coming from local banks and local bond issuance.
Bank Indonesia's recent announcement of a reduction in the downpayment requirement for auto loans and a reduction in luxury tax should also provide a tailwind for growth in the sector over the next few months.
We also see the potential for collaboration in the digital space for <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a>, specifically with <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ),</a> possibly with <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago Tbk PT (ARTO IJ)</a> given that all three have a common shareholder in the shape of TPG Northstar.  
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> trades on 1.4x PBV with a forecast ROE of 15.5% in 2021and 20% in 2022, with EPS forecast to grow +70% and +40% over the next two years. It is not inconceivable that the company could trade up to 2.0x FY2021 PBV given the improvements in its returns but it could trade significantly higher should it forge any digital tie-ups.

BFI Finance Indonesia (BFIN IJ) is the best quality Multi-finance company in Indonesia and one of our highest conviction buy ideas, given the prospect of a strong recovery in new loans together with the funding in place to execute on that growth. 
The company has a focus on providing finance for used cars and other vehicles but also provides top-up financing to its existing customers with a track record at higher interest rates.
BFI Finance Indonesia (BFIN IJ) has a strong track record historically with ROEs historically as high as 25% and ROA at 8%, which we think can be achieved again over the next 2-3 years.
The company is targeting to grow new loans +50% this year and already has the funding in place to do so, with credit lines mainly coming from local banks and local bond issuance.
Bank Indonesia's recent announcement of a reduction in the downpayment requirement for auto loans and a reduction in luxury tax should also provide a tailwind for growth in the sector over the next few months.
We also see the potential for collaboration in the digital space for BFI Finance Indonesia (BFIN IJ), specifically with Gojek (1379371D IJ), possibly with Bank Jago Tbk PT (ARTO IJ) given that all three have a common shareholder in the shape of TPG Northstar.  
BFI Finance Indonesia (BFIN IJ) trades on 1.4x PBV with a forecast ROE of 15.5% in 2021and 20% in 2022, with EPS forecast to grow +70% and +40% over the next two years. It is not inconceivable that the company could trade up to 2.0x FY2021 PBV given the improvements in its returns but it could trade significantly higher should it forge any digital tie-ups. 

BFI Finance Indonesia (BFIN IJ) - High-Quality AutoPlay with a Digital Twist?

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/cheerwin" target="_blank" data-smartkarma-citation="entities:31314:1" rel="noopener">Cheerwin (6601 HK)</a>  is a leading one-stop multi category household care and personal care platform in China. The company has set the terms for its IPO where it plans to raise HK$2.0-2.4bn (approx. US$265-313m) at an indicative IPO price range of HK$7.8-9.2 per share.In our previous insight, we discussed Cheerwin’s business model, segments and financials. Refer the extract below from our previous insight:<div class="content-highlight">The household care market in China is forecasted to grow steadily over the next few years driven by increased urbanisation, growing per capita disposable income, segmentation of product categories and growing innovation. In addition, the Covid-19 outbreak also has accelerated the demand for household care products, especially disinfectants, hand sanitizers and other personal hygiene products. Though the company’s revenues have been growing at lower single digits, we believe strong growth prospects attached to the Chinese household care market alongside diversifying into other verticals such as pet care and personal care markets should help Cheerwin generate stable revenues</div>

Cheerwin (6601 HK)  is a leading one-stop multi category household care and personal care platform in China. The company has set the terms for its IPO where it plans to raise HK$2.0-2.4bn (approx. US$265-313m) at an indicative IPO price range of HK$7.8-9.2 per share.In our previous insight, we discussed Cheerwin’s business model, segments and financials. Refer the extract below from our previous insight:The household care market in China is forecasted to grow steadily over the next few years driven by increased urbanisation, growing per capita disposable income, segmentation of product categories and growing innovation. In addition, the Covid-19 outbreak also has accelerated the demand for household care products, especially disinfectants, hand sanitizers and other personal hygiene products. Though the company’s revenues have been growing at lower single digits, we believe strong growth prospects attached to the Chinese household care market alongside diversifying into other verticals such as pet care and personal care markets should help Cheerwin generate stable revenues

Cheerwin IPO: Fairly Valued Compared to Recent IPOs in the Household, Personal and Pet Care Markets

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Quantitative Analysis

Since our Original on <a href="https://www.smartkarma.com/insights/asia-dividend-forecasting-the-rise-and-fall-of-dividends-across-asian-companies" target="_blank" data-smartkarma-citation="insights:43022" rel="noopener">Asia Dividend Forecasting | The Rise and Fall of Dividends Across Asian Companies</a>, published on Sep 30 2020, this is our first quarterly update. Our models take into account latest reported fiscal year-end financials to provide updated results. We also discuss companies where there is notable change in our conviction level based on updated data.
At the webinar in October, there was also a request for conducting price movement analysis corresponding to forward dividend growth/cut for our back-test results. This analysis is now available. Our results show a high correlation between price movements and dividend growth/cut, suggesting that users of our models will benefit from guiding their investment decisions based on dividend growth/cut outlook.

Since our Original on Asia Dividend Forecasting | The Rise and Fall of Dividends Across Asian Companies, published on Sep 30 2020, this is our first quarterly update. Our models take into account latest reported fiscal year-end financials to provide updated results. We also discuss companies where there is notable change in our conviction level based on updated data.
At the webinar in October, there was also a request for conducting price movement analysis corresponding to forward dividend growth/cut for our back-test results. This analysis is now available. Our results show a high correlation between price movements and dividend growth/cut, suggesting that users of our models will benefit from guiding their investment decisions based on dividend growth/cut outlook.

Asia Dividend Forecasting | Quarterly Update 1.0

Indonesia

PT Unilever Indonesia Tbk manufactures soaps, detergents, margarine, oil and dairy based foods, tea based beverages, ice cream, and cosmetics.

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Unilever Indonesia (UNVR IJ)

Thai Beverage (Thbev): Delayed Beer IPO and Undervaluation

Thai Bev has not been very fortunate in the past few weeks; rising cases in Bangkok that caused the management to call off the BeerCo IPO, dampened...

Henry Soediarko

PT Surya Citra Media Tbk (SCMA IJ) - From Analog to Digital

SCMA saw a resilient performance in 2020, maintaining its audience share to a large extent through re-runs but is now back on track producing new...

Angus Mackintosh

BFI Finance Indonesia (BFIN IJ) - High-Quality AutoPlay with a Digital Twist?

BFI is a well-funded and well-positioned multi finance player with the potential to see significant higher return and the possibility of future...

Angus Mackintosh

Cheerwin IPO: Fairly Valued Compared to Recent IPOs in the Household, Personal and Pet Care Markets

Cheerwin is a leading one-stop multi category household care and personal care platform in China. The company has set the terms for its IPO where...

Shifara Samsudeen, ACMA, CGMA

Asia Dividend Forecasting | Quarterly Update 1.0

We incorporate latest reported financial data to provide updated results for our Asia Dividend Forecasting models. We also ran an insightful price...

Ankit Agrawal, CFA

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