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

Ace Hardware Indonesia / Equity Bottom-Up

<ul>
<li>A meeting with <a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia</a> revealed a newfound enthusiasm and confidence in the outlook for growth with new store formats and an omnichannel approach as key future drivers. </li>
<li>The company will accelerate its store buildout in 2024 with plans for 20 new stores versus 13 in 2023 with new format stores taking the lead, with an emphasis ex-Java.</li>
<li>
<a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> will also accelerate the buildout of smaller-sized Ace Express stores with a pilot started this year.  Recent share price weakness looks unjustified.</li>
</ul>


A meeting with Ace Hardware Indonesia revealed a newfound enthusiasm and confidence in the outlook for growth with new store formats and an omnichannel approach as key future drivers. 
The company will accelerate its store buildout in 2024 with plans for 20 new stores versus 13 in 2023 with new format stores taking the lead, with an emphasis ex-Java.

Ace Hardware Indonesia (ACES IJ) will also accelerate the buildout of smaller-sized Ace Express stores with a pilot started this year.  Recent share price weakness looks unjustified.


Ace Hardware Indonesia (ACES IJ) - Reinvigorated with Significant Upside

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> booked an impressive set of 3Q2023 results after registering a strong improvement in SSSG over the last few months as well as increasing store count.</li>
<li>The company has booked particularly strong performance outside Java, where spending power has proved to be strong, with the company's digital promotions boosting sales significantly and complementing offline sales. </li>
<li>
<a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> has regained its lustre with a more coherent set of initiatives to drive future growth from promotions to new store formats. Valuations remain reasonable.</li>
</ul>



Ace Hardware Indonesia (ACES IJ) booked an impressive set of 3Q2023 results after registering a strong improvement in SSSG over the last few months as well as increasing store count.
The company has booked particularly strong performance outside Java, where spending power has proved to be strong, with the company's digital promotions boosting sales significantly and complementing offline sales. 

Ace Hardware Indonesia (ACES IJ) has regained its lustre with a more coherent set of initiatives to drive future growth from promotions to new store formats. Valuations remain reasonable.


Ace Hardware Indonesia (ACES IJ) - Renaissance in Motion

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>Ace Hardware Indonesia(ACES IJ)On track for further progressACES’ strong SSSG improvement to 7% in 8M23 is a testament of its operational turnaround</li><li>We expect a more targeted promotions in Sep23 and Oct23, along with the expected continuation of SSG improvement in 4Q23 to aid FY23F top line to reach IDR7.3tn</li><li>For FY24, we expect net additional stores and a higher contribution from Ex-Java areas to support FY24 earnings growth of 10.6% yoy</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Ace Hardware Indonesia(ACES IJ)On track for further progressACES’ strong SSSG improvement to 7% in 8M23 is a testament of its operational turnaroundWe expect a more targeted promotions in Sep23 and Oct23, along with the expected continuation of SSG improvement in 4Q23 to aid FY23F top line to reach IDR7.3tnFor FY24, we expect net additional stores and a higher contribution from Ex-Java areas to support FY24 earnings growth of 10.6% yoyContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ace Hardware Indonesia (ACES IJ) - On track for further progress

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The review period for the LQ45 Index July rebalance ended 30 June. The changes should be announced the last week of July, becoming effective after the close on 31 July.</li>
<li>Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat (BBRI)</a> and <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)</a>.</li>
<li>For a change, the impact on the potential inclusions will be higher since they will join the index with higher weights compared to the potential deletions.</li>
</ul>


The review period for the LQ45 Index July rebalance ended 30 June. The changes should be announced the last week of July, becoming effective after the close on 31 July.
Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
For a change, the impact on the potential inclusions will be higher since they will join the index with higher weights compared to the potential deletions.


LQ45 Index Rebalance Preview (July): Identifying Potential Index Changes

Cross Asset Strategy

<ul>
<li>This week we look at the changing dynamics behind Southeast Asia's e-commerce landscape as TikTok effectively moves into second place but the dynamics can change rapidly as it restructures Tokopedia. </li>
<li>We also look at <a href="https://www.smartkarma.com/entities/vinfast-auto-ltd" target="_blank" data-smartkarma-citation="entities:36550:1" rel="noopener">Vinfast</a> as it delays its US factory launch until 2028 versus 2025 due to slower EV sales and we examine the Grab &amp; Trans-cab situation. </li>
<li>CrossASEAN Ground Zero is a thematic weekly product that focuses on key Southeast Asian themes and technology trends with a core focus on Indonesia.</li>
</ul>


This week we look at the changing dynamics behind Southeast Asia's e-commerce landscape as TikTok effectively moves into second place but the dynamics can change rapidly as it restructures Tokopedia. 
We also look at Vinfast as it delays its US factory launch until 2028 versus 2025 due to slower EV sales and we examine the Grab &amp; Trans-cab situation. 
CrossASEAN Ground Zero is a thematic weekly product that focuses on key Southeast Asian themes and technology trends with a core focus on Indonesia.


CrossASEAN Ground Zero - Changing Dynamic in E-Commerce, Vinfast Holding Back, and Grab & Trans-Cab

Indonesia

PT Trikomsel Oke Tbk operates in the retail telecommunication business.  The Company operates retail stores in cities throughout Indonesia that offer a wide range of branded cellular phones.

PT Tunas Ridean Tbk and its subsidiaries operate automobile dealerships that sell new and used motor vehicles, spare parts and accessories as well as provide after-sales services.  Through its subsidiary, PT Tunas Financindo Corporation, the Company also provides operating lease and consumer financing services.

PT MAP Aktif Adiperkasa Tbk retails sporting goods. The Company operates an online portal that offers a wide range boots, shoes, sandals, shorts, caps, hoodies, and accessories. Map Aktif Adiperkasa serves customers in Indonesia.

PT Indomobil Sukses Internasional Tbk assembles, and distributes automobiles, buses, trucks, motorcycles, and their related parts. The Company provides automotive maintenance, financing, and rental services.  Indomobil also trades used cars.

PT Mitra Pinasthika Mustika Tbk is an automotive company which provides distribution & retail for Honda motorcycles, manufacturing and distribution of auto parts such as lubricant oil, auto services such as car rental and auto-related financial services such as consumer financing and insurance.

PT Sona Topas Tourism Industry Tbk operates travel agencies as well as provides travel related services and space rental services. Through its subsidiaries, PT Inti Dutyfree Promosindo and PT Arthamulia Indah, the Company operates duty-free stores throughout Indonesia. The Company's travel office is located in Jakarta and its duty free shops are located in Cengkareng and Bali.

Bukalapak.com PT Tbk provides e-discretionary services. The Company offers range of electronics, food, shoes, apparel, watches, bags, cosmetics products, and other accessories. Bukalapak.com serves customers in Indonesia.

PT Electronic City Indonesia Tbk operates a retail chain of electronic products in Indonesia. The Company primarily focuses on audio-video, home appliances, mobile devices, internet technology and office equipment.

PT Mitra Adiperkasa Tbk operates department stores and specialty stores selling a broad range of goods including clothing, toys, food, and other merchandise.

PT Matahari Department Store Tbk engages in the retail business for several types of products such as clothes, accessories, bags, shoes, cosmetics, household appliances, and management consulting services.

AUTOBACS SEVEN CO., LTD. retails automobile related products and services mainly through its franchise stores throughout Japan.  The Company's product lines include tires, wheels, engine oils, batteries, car stereos, and both interior and exterior car accessories.  Autobacs Seven also has some stores in the Asian region, such as Taiwan, as well as Europe and the United States.

PAL GROUP Holdings Co., Ltd. operates a chain of casual clothing stores based in Kansai area. The Company manufactures and retails men's and women's casual wear and accessories.  The Company also sells its products on the Internet.

AOKI Holdings Inc. operators a store chain specializing in men's suits. The Company also offers maternity and kids clothing.  Aoki International mainly operates in Tokyo metropolitan area and also operates online shopping.

Chico's FAS, Inc. sells private label women's casual clothing and related accessories.  The Company's clothing includes tops, pants, shorts, skirts, and dresses.  Chico's owns and operates stores throughout the United States.

KOHNAN SHOJI CO., LTD. operates a home improvement center chain, located in Osaka, Hyogo, and Kyoto.  The Company sells mainly home improvement products such as lumber, hardware, paint and also household utensils.  Kohnan Shoji also sells auto and leisure products.

GULLIVER INTERNATIONAL CO., LTD. operates a chain of stores which specialize in purchasing used cars.  The Company also operates a retail store chain known as Dolphie Net, via satellite.  Gulliver operates its own stores and also franchise stores nationwide.

The Hour Glass Limited retails and wholesales watches, jewelry and related products through its subsidiaries. The Company also manufactures watches and invests in properties.

Arclands Corporation operates home centers. The Company mainly sells home improvement products, household utensils, car and leisure products, gardening supplies, and other products. Arclands also operates restaurants management, DIY(Do It Yourself) products sales, real estate development, and other businesses.

Adastria Co., Ltd. operates a chain of clothing stores in Japan. The Company also operates stores in China, Taiwan, Hong Kong and Korea.

NISHIMATSUYA CHAIN Co., Ltd., a specialty retailer, sells mainly clothes for infants and children, and also women and men.  The Company also sells maternity clothes and new born baby goods.

PT ACE Hardware Indonesia Tbk retails tools, home improvement products, lawn and garden supplies, plumbing, furniture, sporting goods, and pet supplies.

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Ace Hardware Indonesia (ACES IJ)