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

Thematic (Sector/Industry)

<ul>
<li>Countries in ASEAN have gradually relaxed their travel policies and reopened their borders allowing foreign tourists to come. </li>
<li>Stocks that will benefit range from Airlines, Airport maintenance, catering provider, hotel operator, public transport operator to convenience store and F&amp;B operators.</li>
<li>The big daddy of ASEAN tourism, China, has taken the first step to allow ART tests available for public and worth monitoring its progress. </li>
</ul>


Countries in ASEAN have gradually relaxed their travel policies and reopened their borders allowing foreign tourists to come. 
Stocks that will benefit range from Airlines, Airport maintenance, catering provider, hotel operator, public transport operator to convenience store and F&amp;B operators.
The big daddy of ASEAN tourism, China, has taken the first step to allow ART tests available for public and worth monitoring its progress. 


ASEAN Reopening: Tourism and Transport Reboot - Part Deux

<div>In light of the coordinated reopening movement in ASEAN that stems from the high vaccination rate and pent-up demand to restart cross border as well as similar policy in mind (live with COVID rather zero COVID policy), investors will find short notes on each stock related to the reopening theme. While the majority are long ideas, there is a short investment idea on the back of the normalizing freight rate. <br><br>
</div>
<div>The rebound in the travel and tourism-related names is about to hit an inflection point that could torpedo the share price back into the pre-COVID-19 level or even higher as flows may start to come back to this region. </div>

In light of the coordinated reopening movement in ASEAN that stems from the high vaccination rate and pent-up demand to restart cross border as well as similar policy in mind (live with COVID rather zero COVID policy), investors will find short notes on each stock related to the reopening theme. While the majority are long ideas, there is a short investment idea on the back of the normalizing freight rate.   

The rebound in the travel and tourism-related names is about to hit an inflection point that could torpedo the share price back into the pre-COVID-19 level or even higher as flows may start to come back to this region. 

ASEAN Reopening: Tourism and Transport Reboot

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/sheng-siong-group-ltd" target="_blank" data-smartkarma-citation="entities:6824:1" rel="noopener">Sheng Siong (SSG SP)</a> online expansion could be a little late as other players already have established their strong footprint but there are many smaller players that specialize in certain products only. Sheng Siong offers a wholistic product offering to its customers and should be able to compete with the big boys league such as NTUC, Cold Storage and Red Mart. </p><div class="content-highlight"><p>The nature of online business typically allows a higher net margin compared to the brick and mortar business where property rent and depreciation are major burdens to the net income. The most conservative scenario still allows investors to make 19% while the normal scenario sees a potential upside of 100% from the online foray and some re-rating potential. Much to like on this new venture!</p></div>

Sheng Siong (SSG SP) online expansion could be a little late as other players already have established their strong footprint but there are many smaller players that specialize in certain products only. Sheng Siong offers a wholistic product offering to its customers and should be able to compete with the big boys league such as NTUC, Cold Storage and Red Mart. The nature of online business typically allows a higher net margin compared to the brick and mortar business where property rent and depreciation are major burdens to the net income. The most conservative scenario still allows investors to make 19% while the normal scenario sees a potential upside of 100% from the online foray and some re-rating potential. Much to like on this new venture!

<p>Lockdown, social distancing, and no public gathering have caused the alcohol beverage companies in ASEAN to be under enormous pressure to generate earnings, and some governments' plan to ban alcohol sales does not help to alleviate the burden either. </p>
<p><a href="https://www.smartkarma.com/entities/heineken-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:12647:1" rel="noopener">Heineken Malaysia (HEIM MK)</a> and <a href="https://www.smartkarma.com/entities/carlsberg-brewery-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:5389:1" rel="noopener">Carlsberg Brewery Malaysia (CAB MK)</a> will continue to experience difficulty as the pandemic continues to spring up and the proposal to ban alcohol will also curb revenue growth.</p>
<p><a href="https://www.smartkarma.com/entities/multi-bintang-indonesia-pt" target="_blank" data-smartkarma-citation="entities:11651:1" rel="noopener">Multi Bintang Indonesia (MLBI IJ)</a> and <a href="https://www.smartkarma.com/entities/delta-djakarta-tbk-pt" target="_blank" data-smartkarma-citation="entities:5585:1" rel="noopener">Delta Djakarta (DLTA IJ) </a>may face a similar fate with the Malaysian counterparts but the latter has an 11% dividend yield which may make appealing to some investors and it is also owned by the Jakarta Regional Government. The winner is <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> as Thailand's pandemic is under control and they are about to receive an influx of Chinese tourists again. </p>

Lockdown, social distancing, and no public gathering have caused the alcohol beverage companies in ASEAN to be under enormous pressure to generate earnings, and some governments' plan to ban alcohol sales does not help to alleviate the burden either. 
Heineken Malaysia (HEIM MK) and Carlsberg Brewery Malaysia (CAB MK) will continue to experience difficulty as the pandemic continues to spring up and the proposal to ban alcohol will also curb revenue growth.
Multi Bintang Indonesia (MLBI IJ) and Delta Djakarta (DLTA IJ) may face a similar fate with the Malaysian counterparts but the latter has an 11% dividend yield which may make appealing to some investors and it is also owned by the Jakarta Regional Government. The winner is Thai Beverage (THBEV SP) as Thailand's pandemic is under control and they are about to receive an influx of Chinese tourists again. 

CrossASEAN: Alcoholic Beverage - Where to Drink?

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Cross Asset Strategy

<div class="content-highlight">
<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>Macro Insights</h3><p>In <a href="https://www.smartkarma.com/insights/agong-asserts-himself-preventing-change-of-pm-but-disallowing-emergency-rule" target="_blank" data-smartkarma-citation="insights:44572" rel="noopener">Agong Asserts Himself, Preventing Change of PM but Disallowing Emergency Rule,</a> CrossASEAN Chief Economist <a href="https://www.smartkarma.com/profiles/prasenjit-k-basu" target="_blank" data-smartkarma-citation="accounts:612" rel="noopener">Prasenjit K. Basu</a> comments on the ongoing political upheaval in Malaysia. </p><p>In <a href="https://www.smartkarma.com/insights/trouble-down-south-it-s-not-just-the-virus" target="_blank" data-smartkarma-citation="insights:44698" rel="noopener">Trouble Down South: It's Not Just the Virus,</a><a href="https://www.smartkarma.com/profiles/dr-jim-walker" target="_blank" data-smartkarma-citation="accounts:1628" rel="noopener">Dr. Jim Walker</a> gives his prescriptions on why South East Asia has been such a poor performer this year. </p><p>In <a href="https://www.smartkarma.com/insights/thai-strategy-2021-part-1-key-themes" target="_blank" data-smartkarma-citation="insights:40842" rel="noopener">Thai Strategy 2021 (Part 1): Key Themes,</a> out 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 thoughts for the outlook for the Thai market next year. </p><h3>Equity Bottom-Up Insights</h3><p>In his Indonesian Insight, <a href="https://www.smartkarma.com/insights/matahari-department-store-lppf-ij-too-early-to-be-early" target="_blank" data-smartkarma-citation="insights:44460" rel="noopener">Matahari Department Store (LPPF IJ) - Too Early to Be Early,</a> Cross ASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> circles back to the country's largest department store operator post its recent results. </p><p>In <a href="https://www.smartkarma.com/insights/akr-corporindo-akra-ij-great-omnibus-expectations" target="_blank" data-smartkarma-citation="insights:44611" rel="noopener">AKR Corporindo (AKRA IJ) - Great Omnibus Expectations,</a> CrossASEAN insight provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener">Angus Mackintosh</a> revisits <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" rel="noopener">AKR Corporindo (AKRA IJ)</a> after its recent 3Q2020 results that continued to demonstrate its resilience, with an across the board improvement in margins, despite a decline in sales.</p><p>In a Malaysian Insight, <a href="https://www.smartkarma.com/insights/ql-resources-ql-take-profit" target="_blank" data-smartkarma-citation="insights:44598" rel="noopener">QL Resources (QL): Take Profit?,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" data-smartkarma-citation="accounts:1006" rel="noopener">Henry Soediarko</a> revisits this commodity turned retail play, through its Family Mart business. </p><p>In <a href="https://www.smartkarma.com/insights/far-east-hospitality-trust-feht-beneficiary-of-opening-up" target="_blank" data-smartkarma-citation="insights:44649" rel="noopener">Far East Hospitality Trust (FEHT): Beneficiary of Opening Up,</a> CrossASEAN Insight Provider<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> takes an initial look at<a href="https://www.smartkarma.com/entities/far-east-hospitality-trust" target="_blank" rel="noopener"> Far East Hospitality Trust (FEHT SP),</a> the only hospitality REIT in Singapore with a 100% domestic hospitality exposure and a higher fixed rental component, offering a defensive exposure during this difficult market environment. </p><p>In <a href="https://www.smartkarma.com/insights/bca-profit-returns" target="_blank" data-smartkarma-citation="insights:44605" rel="noopener">BCA – Profit Returns,</a> banking specialist <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> revisits <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a> and finds the bank clawing back some of the ROA it lost during 2Q2020 in the most recent quarter. </p><p>In <a href="https://www.smartkarma.com/insights/bts-potential-positive-catalysts-ahead" target="_blank" data-smartkarma-citation="insights:44691" rel="noopener">BTS: Potential Positive Catalysts Ahead,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisit this Thai transportation play with a more positive slant.</p><p>In <a href="https://www.smartkarma.com/insights/pttep-4q20-earnings-to-soften-from-lower-asp-and-volume-sales" target="_blank" data-smartkarma-citation="insights:44740" rel="noopener">PTTEP: 4Q20 Earnings to Soften from Lower ASP and Volume Sales,</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> assess the prospects for <a href="https://www.smartkarma.com/entities/ptt-exploration-and-production-public-company-limited" target="_blank" data-smartkarma-citation="entities:261:1" rel="noopener">PTT E&amp;P (PTTEP TB)</a> going into the end of the year.</p><h3>Credit Insights</h3><p>In this Insight, <a href="https://www.smartkarma.com/insights/japfa-comfeed-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" data-smartkarma-citation="insights:44743" rel="noopener">Japfa Comfeed - Earnings Flash - 9M FY 2020 Results,</a> Senior Credit Analyst<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> discusses <a href="https://www.smartkarma.com/entities/japfa-comfeed-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8258:1" rel="noopener">Japfa Comfeed Indonesia (JPFA IJ)'</a>s 9M2020 results, which came in worse than expected (following a dismal Q22020), as the impact of COVID-19 reduced consumers' purchasing power and hit demand. </p><p>In <a href="https://www.smartkarma.com/insights/pan-brothers-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" data-smartkarma-citation="insights:44708" rel="noopener">Pan Brothers - Earnings Flash - 9M FY 2020 Results,</a><a href="https://www.smartkarma.com/companies/lucror-analytics" target="_blank" rel="noopener">Lucror Analytics</a> zeros in on the Pan Brothers’ Q3 and 9M2020 earnings. Pan Brothers’ cash flow generation remained poor, and it continued to report large working capital weakness. It appears unlikely that Pan Brothers will be able to increase the size of its syndication facility, given the low commitment from banks at the moment. </p>


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.  
Macro InsightsIn Agong Asserts Himself, Preventing Change of PM but Disallowing Emergency Rule, CrossASEAN Chief Economist Prasenjit K. Basu comments on the ongoing political upheaval in Malaysia. In Trouble Down South: It's Not Just the Virus,Dr. Jim Walker gives his prescriptions on why South East Asia has been such a poor performer this year. In Thai Strategy 2021 (Part 1): Key Themes, out Thai guru Athaporn Arayasantiparb, CFA lays out his thoughts for the outlook for the Thai market next year. Equity Bottom-Up InsightsIn his Indonesian Insight, Matahari Department Store (LPPF IJ) - Too Early to Be Early, Cross ASEAN Insight Provider Angus Mackintosh circles back to the country's largest department store operator post its recent results. In AKR Corporindo (AKRA IJ) - Great Omnibus Expectations, CrossASEAN insight provider Angus Mackintosh revisits AKR Corporindo (AKRA IJ) after its recent 3Q2020 results that continued to demonstrate its resilience, with an across the board improvement in margins, despite a decline in sales.In a Malaysian Insight, QL Resources (QL): Take Profit?, CrossASEAN Insight Provider Henry Soediarko revisits this commodity turned retail play, through its Family Mart business. In Far East Hospitality Trust (FEHT): Beneficiary of Opening Up, CrossASEAN Insight Provider Henry Soediarko takes an initial look at Far East Hospitality Trust (FEHT SP), the only hospitality REIT in Singapore with a 100% domestic hospitality exposure and a higher fixed rental component, offering a defensive exposure during this difficult market environment. In BCA – Profit Returns, banking specialist Daniel Tabbush revisits Bank Central Asia (BBCA IJ) and finds the bank clawing back some of the ROA it lost during 2Q2020 in the most recent quarter. In BTS: Potential Positive Catalysts Ahead,Country Group revisit this Thai transportation play with a more positive slant.In PTTEP: 4Q20 Earnings to Soften from Lower ASP and Volume Sales, our friends at Country Group assess the prospects for PTT E&amp;P (PTTEP TB) going into the end of the year.Credit InsightsIn this Insight, Japfa Comfeed - Earnings Flash - 9M FY 2020 Results, Senior Credit Analyst Trung Nguyen discusses Japfa Comfeed Indonesia (JPFA IJ)'s 9M2020 results, which came in worse than expected (following a dismal Q22020), as the impact of COVID-19 reduced consumers' purchasing power and hit demand. In Pan Brothers - Earnings Flash - 9M FY 2020 Results,Lucror Analytics zeros in on the Pan Brothers’ Q3 and 9M2020 earnings. Pan Brothers’ cash flow generation remained poor, and it continued to report large working capital weakness. It appears unlikely that Pan Brothers will be able to increase the size of its syndication facility, given the low commitment from banks at the moment. 

The Week that Was in ASEAN@Smartkarma - South East Asia Lags, the Bank's Return, and Nimble Staples

Malaysia

7-Eleven Malaysia Holdings Berhad owns, operates, and franchises a chain of convenience stores under the 7-Eleven brand name.

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7-Eleven Malaysia (SEM MK)

ASEAN Reopening: Tourism and Transport Reboot - Part Deux

It may still need a few months or even close to a year to get everything back to the pre-COVID-19 level but the progress since the first insight...

Henry Soediarko

ASEAN Reopening: Tourism and Transport Reboot

Rebound in the travel and tourism-related names is about to hit an inflection point that could torpedo the share price back into the pre-COVID-19...

Henry Soediarko

Sheng Siong: E-Groceries

Sheng Siong (SSG SP) foray into the online grocery market is exciting albeit it could be a little late therefore potential market share that it can...

Henry Soediarko

CrossASEAN: Alcoholic Beverage - Where to Drink?

The pandemic has forced governments to implement lockdown/social distancing that has brought many difficulties for alcohol beverage companies in...

Henry Soediarko

The Week that Was in ASEAN@Smartkarma - South East Asia Lags, the Bank's Return, and Nimble Staples

The Week that Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights from across South East...

Angus Mackintosh

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