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><a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> released its FY2020 results with an EPS decline of -53% before exceptional (gain on sale of <a href="https://www.smartkarma.com/entities/bank-permata-tbk-pt" target="_blank" data-smartkarma-citation="entities:728:1" rel="noopener">Bank Permata (BNLI IJ)</a> to <a href="https://www.smartkarma.com/entities/bangkok-bank-public-co-ltd" target="_blank" data-smartkarma-citation="entities:213:1" rel="noopener">Bangkok Bank Public (BBL TB))</a>. Including the one-off gain from the sale of the bank then profits were down -28%. </p>
<p>Car sales were down -50% in 2020 with <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> seeing a slight decline in market share, whilst motorcycle sales were -41% but with Astra Honda gaining market share. </p>
<p><a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> saw a slight increase in loan loss provisions for its financial services business due to the impact of the pandemic. </p>
<p><a href="https://www.smartkarma.com/entities/united-tractors-tbk-pt" target="_blank" data-smartkarma-citation="entities:698:1" rel="noopener">United Tractors (UNTR IJ)</a> was impacted by lower coal prices impacting heavy equipment sales and mining contracting volumes. </p>
<p>Its agribusiness under <a href="https://www.smartkarma.com/entities/astra-agro-lestari-tbk-pt" target="_blank" data-smartkarma-citation="entities:4050:1" rel="noopener">Astra Agro Lestari (AALI IJ)</a> saw positive tailwinds from the higher crude palm oil price. </p>
<p>The company finished the period with a strong balance sheet and a strong funding position given it has booked the proceeds from the sale of <a href="https://www.smartkarma.com/entities/bank-permata-tbk-pt" target="_blank" data-smartkarma-citation="entities:728:1" rel="noopener">Bank Permata (BNLI IJ)</a>. This gives <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> the wherewithal to look for acquisition opportunities in the wake of the pandemic. </p>
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<p><a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> is trading around 20% below the historical mean on a forward PER basis and could trade higher during a recovery. It continues to be one of our top picks to play the recovery in the Indonesian economy. </p>
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Astra International (ASII IJ) released its FY2020 results with an EPS decline of -53% before exceptional (gain on sale of Bank Permata (BNLI IJ) to Bangkok Bank Public (BBL TB)). Including the one-off gain from the sale of the bank then profits were down -28%. 
Car sales were down -50% in 2020 with Astra International (ASII IJ) seeing a slight decline in market share, whilst motorcycle sales were -41% but with Astra Honda gaining market share. 
Astra International (ASII IJ) saw a slight increase in loan loss provisions for its financial services business due to the impact of the pandemic. 
United Tractors (UNTR IJ) was impacted by lower coal prices impacting heavy equipment sales and mining contracting volumes. 
Its agribusiness under Astra Agro Lestari (AALI IJ) saw positive tailwinds from the higher crude palm oil price. 
The company finished the period with a strong balance sheet and a strong funding position given it has booked the proceeds from the sale of Bank Permata (BNLI IJ). This gives Astra International (ASII IJ) the wherewithal to look for acquisition opportunities in the wake of the pandemic. 

Astra International (ASII IJ) is trading around 20% below the historical mean on a forward PER basis and could trade higher during a recovery. It continues to be one of our top picks to play the recovery in the Indonesian economy. 


Astra International (ASII IJ) - Sitting in Pole Position

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p><em>This week in StubWorld ... </em></p>
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<p><a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>'s shares outperformed subsequent to the MSCI deletion <a href="https://app2.msci.com/eqb/gimi/stdindex/MSCI_Nov20_STPublicList.pdf" target="_blank" rel="noopener">announcement</a> on the 10 November, with the discount to NAV narrowing ahead of its deletion on the 30 November. JCNC has since retraced and is now at a multi-year low (i.e. multi-year high discount) to NAV.</p>
<p>The implied stub is at its lowest level since July 2015.  </p>
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<p>Preceding my comments on JCNC 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 ... 

Jardine Cycle &amp; Carriage (JCNC SP)'s shares outperformed subsequent to the MSCI deletion announcement on the 10 November, with the discount to NAV narrowing ahead of its deletion on the 30 November. JCNC has since retraced and is now at a multi-year low (i.e. multi-year high discount) to NAV.
The implied stub is at its lowest level since July 2015.  









Preceding my comments on JCNC 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: Jardine Cycle & Carriage - Back To MSCI Deletion Levels

Cross Asset Strategy

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<p>The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.  </p>
</div><h3>Equity Bottom Up</h3><p>In<a href="https://www.smartkarma.com/insights/sea-ltd-se-us-financial-services-the-third-pillar" target="_blank" rel="noopener"> Sea Ltd (SE US) - Financial Services the Third Pillar?</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> revisits the company after the Monetary Authority of Singapore (MAS) announced last week that it will award a full digital bank license to <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" rel="noopener">Sea Ltd (SE US).</a></p><p> In <a href="https://www.smartkarma.com/insights/erajaya-swasembada-eraa-ij-feeding-the-digital-economy" target="_blank" data-smartkarma-citation="insights:46136" rel="noopener">Erajaya Swasembada (ERAA IJ) - Feeding the Digital Economy,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits Indonesia's leading smartphone and retailer and distributor after a call with the company's management. </p><p>In this Malaysian Insight,<a href="https://www.smartkarma.com/insights/myeg-vaccine-and-concession-worries-unfounded" target="_blank" rel="noopener"> MYEG: Vaccine and Concession - Worries Unfounded</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> sees the company as undervalued versus its peers, with management taking a more dynamic and active approach by launching new initiatives such as online groceries and health screening services.</p><p>In<a href="https://www.smartkarma.com/insights/far-east-hospitality-trust-feht-stable-in-slow-recovery" target="_blank" rel="noopener"> Far East Hospitality Trust (FEHT): Stable in Slow Recovery</a>,<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> returns to look at <a href="https://www.smartkarma.com/entities/far-east-hospitality-trust" target="_blank" data-smartkarma-citation="entities:19061:1" rel="noopener">Far East Hospitality Trust (FEHT SP)</a>, which he sees as a relatively safe way to play the recovery in the hospitality industry.</p><p>In<a href="https://www.smartkarma.com/insights/sea-ltd-placement-new-business-needs-new-money" target="_blank" rel="noopener"> SEA Ltd Placement - New Business Needs New Money</a>,<a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" rel="noopener"> Sumeet Singh</a> revisits<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" rel="noopener"> Sea Ltd (SE US)</a> as it announced that it is planning to raise US$2.2bn - US$2.6bn in a primary follow-on offering of Global Depository Shares. He sees this as an opportunistic fundraising to help grow its digital financial services having just secured a full digital banking license in Singapore. </p><p>In <a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-pttor-ipo-initiation-octane-ratings" target="_blank" data-smartkarma-citation="insights:46230" rel="noopener">PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings,</a><a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" data-smartkarma-citation="accounts:1680" rel="noopener">Arun George</a> initiates coverage on this upcoming gasoline station and retailing IPO from PTT Group.</p><p>In<a href="https://www.smartkarma.com/insights/ipo-radar-supalai-reit-office-tower-operator-on-rama-3" target="_blank" rel="noopener"> IPO Radar: Supalai REIT, Office Tower Operator on Rama 3</a>, our Thai guru<a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" rel="noopener"> Athaporn Arayasantiparb, CFA</a> looks at the upcoming IPO of <a href="https://www.smartkarma.com/entities/supalai-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:30843:1" rel="noopener">Supalai Real Estate Investment Trust (SPALIRT TB)</a>in Thailand.</p><p><a href="https://www.smartkarma.com/entities/supalai-public-company-ltd" target="_blank" data-smartkarma-citation="entities:14148:1" rel="noopener"></a>In Thailand<a href="https://www.smartkarma.com/insights/kerry-express-thailand-ipo-time-for-delivery" target="_blank" rel="noopener"> Kerry Express Thailand IPO - Time for Delivery</a>, IPO specialist<a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" rel="noopener"> Sumeet Singh</a> takes a look at<a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" rel="noopener"> Kerry Express Thailand (KEX TB)</a> which has registered spectacular growth over the past few years. </p><p>Still in<a href="https://www.smartkarma.com/insights/kerry-express-thailand-kex-ipo-update-on-valuation-range-competitor-actions" target="_blank" rel="noopener"> Kerry Express Thailand (KEX) IPO: Update on Valuation Range &amp; Competitor Actions</a><a href="https://www.smartkarma.com/profiles/daniel-hellberg" target="_blank" data-smartkarma-citation="accounts:605" rel="noopener">Daniel Hellberg</a> of <a href="https://www.smartkarma.com/companies/tracking-traffic" target="_blank" rel="noopener">Tracking Traffic</a> takes a look at the upcoming IPO of <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" rel="noopener"> Kerry Express Thailand (KEX TB).</a><a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> recently announced an IPO price range of THB25-28 per share and plans to finally list its shares in late December. </p><div id="ember14458">
<p>In<a href="https://www.smartkarma.com/insights/singapore-exchange-strains-seen-for-tw-futures" target="_blank" rel="noopener"> Singapore Exchange – Strains Seen For TW Futures</a>,<a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" rel="noopener"> Thomas J. Monaco</a> takes a look at  <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" rel="noopener">SGX (SGX SP),</a> after it released market statistics for November 2020. </p>
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</div><h3>Sector and Thematic</h3><p>In <a href="https://www.smartkarma.com/insights/the-stocks-to-own-in-asean-vol-33" target="_blank" data-smartkarma-citation="insights:46106" rel="noopener">The Stocks to Own in ASEAN – Vol. 33,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> lays out his thoughts and highlights 14 stocks in ASEAN that look interesting to him based on his FVMR Methodology. His research team constantly reviews the ASEAN markets to try to find interesting ideas based on Fundamentals or Valuation or Momentum or Risk or some combination thereof. </p><div><p></p></div>


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.  
Equity Bottom UpIn Sea Ltd (SE US) - Financial Services the Third Pillar?, CrossASEAN insight provider Angus Mackintosh revisits the company after the Monetary Authority of Singapore (MAS) announced last week that it will award a full digital bank license to Sea Ltd (SE US). In Erajaya Swasembada (ERAA IJ) - Feeding the Digital Economy, CrossASEAN Insight Provider Angus Mackintosh revisits Indonesia's leading smartphone and retailer and distributor after a call with the company's management. In this Malaysian Insight, MYEG: Vaccine and Concession - Worries Unfounded, CrossASEAN insight provider Henry Soediarko sees the company as undervalued versus its peers, with management taking a more dynamic and active approach by launching new initiatives such as online groceries and health screening services.In Far East Hospitality Trust (FEHT): Stable in Slow Recovery, Henry Soediarko returns to look at Far East Hospitality Trust (FEHT SP), which he sees as a relatively safe way to play the recovery in the hospitality industry.In SEA Ltd Placement - New Business Needs New Money, Sumeet Singh revisits Sea Ltd (SE US) as it announced that it is planning to raise US$2.2bn - US$2.6bn in a primary follow-on offering of Global Depository Shares. He sees this as an opportunistic fundraising to help grow its digital financial services having just secured a full digital banking license in Singapore. In PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings,Arun George initiates coverage on this upcoming gasoline station and retailing IPO from PTT Group.In IPO Radar: Supalai REIT, Office Tower Operator on Rama 3, our Thai guru Athaporn Arayasantiparb, CFA looks at the upcoming IPO of Supalai Real Estate Investment Trust (SPALIRT TB)in Thailand.In Thailand Kerry Express Thailand IPO - Time for Delivery, IPO specialist Sumeet Singh takes a look at Kerry Express Thailand (KEX TB) which has registered spectacular growth over the past few years. Still in Kerry Express Thailand (KEX) IPO: Update on Valuation Range &amp; Competitor ActionsDaniel Hellberg of Tracking Traffic takes a look at the upcoming IPO of  Kerry Express Thailand (KEX TB).Kerry Express Thailand (KEX TB) recently announced an IPO price range of THB25-28 per share and plans to finally list its shares in late December. 
In Singapore Exchange – Strains Seen For TW Futures, Thomas J. Monaco takes a look at  SGX (SGX SP), after it released market statistics for November 2020. 

Sector and ThematicIn The Stocks to Own in ASEAN – Vol. 33,Dr. Andrew Stotz, CFA lays out his thoughts and highlights 14 stocks in ASEAN that look interesting to him based on his FVMR Methodology. His research team constantly reviews the ASEAN markets to try to find interesting ideas based on Fundamentals or Valuation or Momentum or Risk or some combination thereof. 

The Week that Was in ASEAN@Smartkarma - Digital Festive Cheer, Sea Ltd Going Financial, and KEX

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<p>Yesterday, MSCI <a href="https://www.smartkarma.com/insights/The%20changes%20will%20be%20effective%20after%20the%20close%20of%20trading%20on%2030%20November." target="_blank" rel="noopener">announced</a> its November 2020 Semi-Annual Index Review.  As widely anticipated, <a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a> and <a href="https://www.smartkarma.com/entities/yangzijiang-shipbuilding-holdings-limited" target="_blank" data-smartkarma-citation="entities:660:1" rel="noopener">Yangzijiang Shipbuilding (YZJSGD SP)</a> are shown the exit, reducing the number of index constituents to 19. The changes will be effective after the close of trading on 30 November.</p>
<p>In <em><a href="https://skr.ma/N64Lw" target="_blank" rel="noopener">MSCI Singapore Index Rebalance Nov20: Shrinking Number of Constituents</a></em>, <a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> reckons 8.9 days of ADV to sell of JCNC from passive funds. JCNC is down ~3% today as I type, against +3% for ASII.</p>
<p>I see JCNC's discount to NAV at ~36% against a 12-month average of ~17%, having recently moved off its all-time low of ~38%.</p>
<p>As JCNC is all-but a proxy into Astra, this appears a straight-forward mean reversion play. </p>
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<p>More below the fold.</p>


Yesterday, MSCI announced its November 2020 Semi-Annual Index Review.  As widely anticipated, Jardine Cycle &amp; Carriage (JCNC SP) and Yangzijiang Shipbuilding (YZJSGD SP) are shown the exit, reducing the number of index constituents to 19. The changes will be effective after the close of trading on 30 November.
In MSCI Singapore Index Rebalance Nov20: Shrinking Number of Constituents, Brian Freitas reckons 8.9 days of ADV to sell of JCNC from passive funds. JCNC is down ~3% today as I type, against +3% for ASII.
I see JCNC's discount to NAV at ~36% against a 12-month average of ~17%, having recently moved off its all-time low of ~38%.
As JCNC is all-but a proxy into Astra, this appears a straight-forward mean reversion play. 

More below the fold.

Jardine Cycle & Carriage: "Buy The Fact" On MSCI Deletion

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<p><em><strong>Corrigenda: There is an error in this Insight. Please note the correction.</strong></em></p>
<p><em><strong>Correction: The Insight <a href="https://www.smartkarma.com/insights/bjbr-positive-fundamental-momentum-at-a-decent-valuation" target="_blank" data-smartkarma-citation="insights:44897" rel="noopener">BJBR: Positive Fundamental Momentum at a Decent Valuation</a> was improperly attributed to Thomas Monaco. It was published by <a href="https://www.smartkarma.com/profiles/paul-hollingworth" target="_blank" data-smartkarma-citation="accounts:2554" rel="noopener">Paul Hollingworth</a>.</strong></em></p>
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<p>The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.  </p>
</div>
<p><strong><a href="https://www.smartkarma.com/insights/smartkarma-corporate-webinar-indo-banks-the-worst-is-over" target="_blank" data-smartkarma-citation="insights:44882" rel="noopener">Smartkarma Corporate Webinar | Indo Banks: The Worst Is Over</a></strong>-<strong> 10th November at 4 pm.</strong></p>
<p>For our next Corporate Webinar, we welcome <a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri Persero (BMRI IJ)</a>'s Group Head of Investor Relations, <a href="https://www.smartkarma.com/profiles/yohan-setio" target="_blank" rel="noopener">Yohan Setio</a>, who will share some company updates and sit down for a fireside chat with Smartkarma Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener">Angus Mackintosh</a>.</p>
<h2>Indonesia's Recovery and the Next Digital Darling</h2>
<p>This week below the fold we look at Indonesia's recent economic numbers which saw the country slide into recession, its first since the Asian Crisis but find it encouraging that the economy is moving onto a recovery track. We see selective banks and <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> as core ways to play this recovery. </p>
<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> is SoutEast Asia's largest Market Cap stock, and there are very few if any alternatives to get exposure to the region's e-commerce boom, certainly in the listed universe. One potential future candidate is <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ),</a> which is the major shareholder of <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> but it also has stakes in Bukalapak and Dana, the number three digital payments player in Indonesia and a JV with Ant Financial.</p>
<p><a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a> has announced that it will seek approval for a stock split in December but this may not be the end of the story. Any restructuring which brings all of its digital assets under one roof and improves liquidity would certainly help the company attract more institutional investors and secure a higher valuation. </p>
<h3>Macro Insights</h3>
<p>In <a href="https://www.smartkarma.com/insights/thai-strategy-2021-part-2-top-10-stock-picks" target="_blank" data-smartkarma-citation="insights:40851" rel="noopener">Thai Strategy 2021 (Part 2): Top 10 Stock Picks,</a> our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> lays out his top stock picks in Thailand for next year.</p>
<p>In <a href="https://www.smartkarma.com/insights/thai-strategy-2021-part-3-sector-outlooks" target="_blank" data-smartkarma-citation="insights:40864" rel="noopener">Thai Strategy 2021 (Part 3): Sector Outlooks,</a> our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> provides us with his sector strategy in Thailand for the coming year. </p>
<h3>Equity Bottom Up</h3>
<p>In an Indonesian Insight,<a href="https://www.smartkarma.com/insights/astra-international-asii-ij-an-auto-recovery-story-with-a-golden-digital-twist" target="_blank" rel="noopener"> Astra International (ASII IJ) - An Auto-Recovery Story with a Golden Digital Twist</a>, CrossASEAN Insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> returns to look at<a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" rel="noopener"> Astra International (ASII IJ)</a> after a conversation with management. </p>
<p>In <a href="https://www.smartkarma.com/insights/pt-surya-citra-media-tbk-scma-ij-let-the-games-begin" target="_blank" data-smartkarma-citation="insights:44914" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ) - Let the Games Begin,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits one of Indonesia's leading media companies, which has an increasingly digital twist.</p>
<p>In <a href="https://www.smartkarma.com/insights/aem-holdings-optimistic-on-fy21-fair-value-remains-at-5-sgd-41-upside" target="_blank" data-smartkarma-citation="insights:44915" rel="noopener">AEM Holdings: Optimistic on FY21; Fair Value Remains at 5 SGD (41% Upside),</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a> revisits <a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM Holdings (AEM SP)</a> after an impressive set of results and remains positive.</p>
<p>In <a href="https://www.smartkarma.com/insights/bjbr-positive-fundamental-momentum-at-a-decent-valuation" target="_blank" data-smartkarma-citation="insights:44897" rel="noopener">BJBR: Positive Fundamental Momentum at a Decent Valuation,</a><a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" data-smartkarma-citation="accounts:1716" rel="noopener">Thomas J. Monaco</a> writes on this smaller Indonesian lender with a positive slant.</p>
<p>In <a href="https://www.smartkarma.com/insights/oversea-chinese-banking-corp-still-not-a-great-eastern" target="_blank" data-smartkarma-citation="insights:44901" rel="noopener">Oversea Chinese Banking Corp – Still Not A Great Eastern,</a><a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" data-smartkarma-citation="accounts:1716" rel="noopener">Thomas J. Monaco</a> looked in detail at <a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a> numbers ahead of <a href="https://www.smartkarma.com/entities/oversea-chinese-banking-corp" target="_blank" data-smartkarma-citation="entities:114:1" rel="noopener">Oversea Chinese Banking Corp. (OCBC SP)</a> results. </p>
<p>In <a href="https://www.smartkarma.com/insights/oversea-chinese-banking-corp-solid" target="_blank" data-smartkarma-citation="insights:45061" rel="noopener">Oversea Chinese Banking Corp. – Solid,</a><a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" data-smartkarma-citation="accounts:1716" rel="noopener">Thomas J. Monaco</a> revisits this Singapore lender with a positive view post its recent 3Q2020 numbers. </p>
<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener"></a>In<a href="https://www.smartkarma.com/insights/dbs-group-holdings-not-trending-the-right-way-yet" target="_blank" rel="noopener"> DBS Group Holdings – Not Trending The Right Way Yet</a>,<a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" rel="noopener"> Thomas J. Monaco</a> reports back<a href="https://www.smartkarma.com/entities/dbs-group-holdings-ltd" target="_blank" rel="noopener"> DBS Group Holdings (DBS SP)</a>'s post its recent 3Q2020 results with a chequered view.</p>
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<p>In this Thai Insight,<a href="https://www.smartkarma.com/insights/hmpro-expect-government-stimulus-scheme-drive-4q20-recover-qoq" target="_blank" rel="noopener"> HMPRO: Expect Government Stimulus Scheme Drive 4Q20 Recover QoQ,</a> our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> circle back to Thailand's leading home improvements player <a href="https://www.smartkarma.com/entities/home-product-center-pcl" target="_blank" data-smartkarma-citation="entities:9906:1" rel="noopener">Home Product Center (HMPRO TB)</a>. </p>
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<p>In<a href="https://www.smartkarma.com/insights/synex-solid-earnings-growth-outlook-but-largely-priced-in" target="_blank" rel="noopener"> SYNEX: Solid Earnings Growth Outlook but Largely Priced In</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> provides a view on<a href="https://www.smartkarma.com/entities/synnex-thailand-pcl" target="_blank" rel="noopener"> Synnex Thailand (SYNEX TB),</a> following the recent run-up in the share price. </p>
<p>In this Thai Insight, <a href="https://www.smartkarma.com/insights/scc-strong-3q20-thanks-to-petrochemical-spread" target="_blank" rel="noopener">SCC: Strong 3Q20 Thanks to Petrochemical Spread</a>, our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> return to look at<a href="https://www.smartkarma.com/entities/siam-cement-pcl-the" target="_blank" rel="noopener"> Siam Cement (SCC TB)</a> post 3Q2020 results. </p>
<p>In <a href="https://www.smartkarma.com/insights/mc-prominent-denim-brand-with-new-growth-momentum" target="_blank" data-smartkarma-citation="insights:45077" rel="noopener">MC: Prominent Denim Brand with New Growth Momentum,</a> our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a>initiate on this leading Thai denim apparel player. They initiate coverage of <a href="https://www.smartkarma.com/entities/mc-group-pcl" target="_blank" data-smartkarma-citation="entities:17093:1" rel="noopener">MC Group Pcl (MC TB)</a> with a BUY rating and a target price of Bt12.0, derived from 18.5x FY21E PER, which is +1SD above its 5-year trading average but slightly lower than its global apparel peers.</p>
<h3>Credit Insights</h3>
<p>In <a href="https://www.smartkarma.com/insights/lippo-karawaci-earnings-flash-q3-fy-2020-results-lucror-analytics" target="_blank" rel="noopener">Lippo Karawaci - Earnings Flash - Q3 FY 2020 Results</a>, credit specialist<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> looks at<a href="https://www.smartkarma.com/entities/lippo-karawaci-tbk-pt" target="_blank" rel="noopener"> Lippo Karawaci (LPKR IJ)'s</a> after its recent results, which continued to be robust in Q32020. </p>
<p>In <a href="https://www.smartkarma.com/insights/chandra-asri-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" data-smartkarma-citation="insights:44814" rel="noopener">Chandra Asri - Earnings Flash - 9M FY 2020 Results</a> credit specialist <a href="https://www.smartkarma.com/profiles/leonard-law-cfa" target="_blank" data-smartkarma-citation="accounts:7106" rel="noopener">Leonard Law, CFA</a> circles back to this leading chemicals player post 3Q2020 results.</p>


Corrigenda: There is an error in this Insight. Please note the correction.
Correction: The Insight BJBR: Positive Fundamental Momentum at a Decent Valuation was improperly attributed to Thomas Monaco. It was published by Paul Hollingworth.



The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.  

Smartkarma Corporate Webinar | Indo Banks: The Worst Is Over- 10th November at 4 pm.
For our next Corporate Webinar, we welcome Bank Mandiri Persero (BMRI IJ)'s Group Head of Investor Relations, Yohan Setio, who will share some company updates and sit down for a fireside chat with Smartkarma Insight Provider Angus Mackintosh.
Indonesia's Recovery and the Next Digital Darling
This week below the fold we look at Indonesia's recent economic numbers which saw the country slide into recession, its first since the Asian Crisis but find it encouraging that the economy is moving onto a recovery track. We see selective banks and Astra International (ASII IJ) as core ways to play this recovery. 
Sea Ltd (SE US) is SoutEast Asia's largest Market Cap stock, and there are very few if any alternatives to get exposure to the region's e-commerce boom, certainly in the listed universe. One potential future candidate is Emtek (EMTK IJ), which is the major shareholder of PT Surya Citra Media Tbk (SCMA IJ) but it also has stakes in Bukalapak and Dana, the number three digital payments player in Indonesia and a JV with Ant Financial.
Emtek (EMTK IJ) has announced that it will seek approval for a stock split in December but this may not be the end of the story. Any restructuring which brings all of its digital assets under one roof and improves liquidity would certainly help the company attract more institutional investors and secure a higher valuation. 
Macro Insights
In Thai Strategy 2021 (Part 2): Top 10 Stock Picks, our Thai guru Athaporn Arayasantiparb, CFA lays out his top stock picks in Thailand for next year.
In Thai Strategy 2021 (Part 3): Sector Outlooks, our Thai guru Athaporn Arayasantiparb, CFA provides us with his sector strategy in Thailand for the coming year. 
Equity Bottom Up
In an Indonesian Insight, Astra International (ASII IJ) - An Auto-Recovery Story with a Golden Digital Twist, CrossASEAN Insight provider Angus Mackintosh returns to look at Astra International (ASII IJ) after a conversation with management. 
In PT Surya Citra Media Tbk (SCMA IJ) - Let the Games Begin, CrossASEAN Insight Provider Angus Mackintosh revisits one of Indonesia's leading media companies, which has an increasingly digital twist.
In AEM Holdings: Optimistic on FY21; Fair Value Remains at 5 SGD (41% Upside), CrossASEAN Insight Provider Nicolas Van Broekhoven revisits AEM Holdings (AEM SP) after an impressive set of results and remains positive.
In BJBR: Positive Fundamental Momentum at a Decent Valuation,Thomas J. Monaco writes on this smaller Indonesian lender with a positive slant.
In Oversea Chinese Banking Corp – Still Not A Great Eastern,Thomas J. Monaco looked in detail at Great Eastern Holdings (GE SP) numbers ahead of Oversea Chinese Banking Corp. (OCBC SP) results. 
In Oversea Chinese Banking Corp. – Solid,Thomas J. Monaco revisits this Singapore lender with a positive view post its recent 3Q2020 numbers. 
In DBS Group Holdings – Not Trending The Right Way Yet, Thomas J. Monaco reports back DBS Group Holdings (DBS SP)'s post its recent 3Q2020 results with a chequered view.



In this Thai Insight, HMPRO: Expect Government Stimulus Scheme Drive 4Q20 Recover QoQ, our friends at Country Group circle back to Thailand's leading home improvements player Home Product Center (HMPRO TB). 



In SYNEX: Solid Earnings Growth Outlook but Largely Priced In, Country Group provides a view on Synnex Thailand (SYNEX TB), following the recent run-up in the share price. 
In this Thai Insight, SCC: Strong 3Q20 Thanks to Petrochemical Spread, our friends at Country Group return to look at Siam Cement (SCC TB) post 3Q2020 results. 
In MC: Prominent Denim Brand with New Growth Momentum, our friends at Country Groupinitiate on this leading Thai denim apparel player. They initiate coverage of MC Group Pcl (MC TB) with a BUY rating and a target price of Bt12.0, derived from 18.5x FY21E PER, which is +1SD above its 5-year trading average but slightly lower than its global apparel peers.
Credit Insights
In Lippo Karawaci - Earnings Flash - Q3 FY 2020 Results, credit specialist Trung Nguyen looks at Lippo Karawaci (LPKR IJ)'s after its recent results, which continued to be robust in Q32020. 
In Chandra Asri - Earnings Flash - 9M FY 2020 Results credit specialist Leonard Law, CFA circles back to this leading chemicals player post 3Q2020 results.

The Week that Was in ASEAN@Smartkarma - Indonesia's Recovery and the Next Digital Darling

Indonesia

PT United Tractors Tbk distributes and leases construction machinery including Komatsu, Nissan Diesel, Scania, Bomag, Valmet, and Tadano brands.  The Company also provides contract mining services, and trades and assembles heavy equipment.

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United Tractors (UNTR IJ)

Astra International (ASII IJ) - Sitting in Pole Position

Astra International is trading around 20% below the historical mean on a forward PER basis and could trade higher during a recovery. It remains one...

Angus Mackintosh

StubWorld: Jardine Cycle & Carriage - Back To MSCI Deletion Levels

The MSCI deletion is now done. The sentiment for Indonesian autos is upbeat, and Astra is back to February levels. Investors should be buying JCNC...

David Blennerhassett

The Week that Was in ASEAN@Smartkarma - Digital Festive Cheer, Sea Ltd Going Financial, and KEX

The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South...

Angus Mackintosh

Jardine Cycle & Carriage: "Buy The Fact" On MSCI Deletion

As Jardine Cycle & Carriage (JCNC SP) is all-but a proxy into Astra International (ASII IJ), this appears a straight-forward mean reversion play.

David Blennerhassett

The Week that Was in ASEAN@Smartkarma - Indonesia's Recovery and the Next Digital Darling

The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across SE...

Angus Mackintosh

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