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

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>Let's get Digital</h3><p>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" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> and to a consortium including <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> and <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> in a move to liberalize the local banking industry. Like traditional banks, these players will provide retail customers with services such as opening accounts, deposits, as well as issuing debit and credit cards, The difference being that digital banks will not have a physical presence and all banking services will be done online. More below the fold...</p><h3>Equity Bottom Up</h3><p>In<a href="https://www.smartkarma.com/insights/bank-negara-indonesia-persero-bbni-ij-still-more-pain-to-come" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ) - Still More Pain to Come</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/bank-negara-indonesia-persero" target="_blank" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> after a call with management revealing some continuing risks on the horizon.</p><p>In<a href="https://www.smartkarma.com/insights/gojek-and-grab-merger-wishful-thinking" target="_blank" rel="noopener"> Gojek and Grab Merger Wishful Thinking?</a>,<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> zeros in on the resurgence of rumors of a merger between<a href="https://www.smartkarma.com/entities/gojek" target="_blank" rel="noopener"> Gojek (1379371D IJ)</a> and<a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" rel="noopener"> Grab (0967655D SP)</a>, which looks like wishful thinking from a Grab perspective, and indeed from Softbank's major shareholder. </p><p>In<a href="https://www.smartkarma.com/insights/prodia-widyahusada-prda-ij-testing-times-a-positive" target="_blank" rel="noopener"> Prodia Widyahusada (PRDA IJ) - Testing Times a Positive</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> returns to look at Indonesian diagnostics leader <a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" rel="noopener">Prodia Widyahusada (PRDA IJ),</a> after its positive 3Q2020 results.</p><p>In <a href="https://www.smartkarma.com/insights/thai-corona-crisis-december-the-looming-shadow-of-myanmar" target="_blank" rel="noopener">Thai Corona Crisis (December): The Looming Shadow of Myanmar</a>,  Thai guru<a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" rel="noopener"> Athaporn Arayasantiparb, CFA</a> revisits the pandemic situation in Thailand after a number of infected Burmese workers illegally crossed into Thailand without proper health checks. </p><p>In<a href="https://www.smartkarma.com/insights/bank-danamon-profit-transformation-not-recognized" target="_blank" rel="noopener"> Bank Danamon – Profit Transformation Not Recognized</a>, banking specialist<a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" rel="noopener"> Daniel Tabbush</a> reports back on<a href="https://www.smartkarma.com/entities/bank-danamon-indonesia-tbk-pt" target="_blank" rel="noopener"> Bank Danamon Indonesia (BDMN IJ)</a>'s Q32020 results. He sees that BDMN having the potential to see a significant rebound in ROA. </p><p>In<a href="https://www.smartkarma.com/insights/silicon-stories-n-humanica-and-rs-tout-their-online-credentials" target="_blank" rel="noopener"> Silicon Stories N: Humanica and RS Tout Their Online Credentials</a>, Thai guru<a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" rel="noopener"> Athaporn Arayasantiparb, CFA</a> reports back after visiting two companies that clearly benefit from the remote economy popularized by the pandemic including <a href="https://www.smartkarma.com/entities/humanica-pcl" target="_blank" data-smartkarma-citation="entities:26151:1" rel="noopener">Humanica PCL (HUMAN TB)</a> and <a href="https://www.smartkarma.com/entities/rs-pcl" target="_blank" data-smartkarma-citation="entities:18114:1" rel="noopener">RS PCL (RS TB)</a>.</p><p>In Malaysia<a href="https://www.smartkarma.com/insights/cimb-group-reserve-cover-light-still" target="_blank" rel="noopener"> CIMB Group – Reserve Cover Light Still</a>, banking specialist<a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" rel="noopener"> Thomas J. Monaco</a> discusses 3Q2020  results from <a href="https://www.smartkarma.com/entities/cimb-group-holdings-bhd" target="_blank" rel="noopener">CIMB Group Holdings (CIMB MK)</a> and highlights two important trends.</p><p>In<a href="https://www.smartkarma.com/insights/kerry-express-ipo-valuation-insights" target="_blank" rel="noopener"> Kerry Express IPO: Valuation Insights</a>, IPO specialist<a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" rel="noopener"> Arun George</a> returns to look at<a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" rel="noopener"> Kerry Express Thailand (KEX TB)</a> valuations after providing a view on the company's 3Q20 results. Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener"></a></p><div>
<p>In<a href="https://www.smartkarma.com/insights/tfg-solid-outlook-though-it-should-retreat-from-3q20-peak" target="_blank" rel="noopener"> TFG: Solid Outlook, Though It Should Retreat from 3Q20 Peak</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> report back after the<a href="https://www.smartkarma.com/entities/thai-foods-group-public-company-limited" target="_blank" rel="noopener"> Thai Foods Group Public Company (TFG TB)</a> analyst meeting. </p>
<p>In<a href="https://www.smartkarma.com/insights/pttep-target-to-achieve-6-cagr-sales-growth-in-2021-25" target="_blank" rel="noopener"> PTTEP: Target to Achieve 6% CAGR Sales Growth in 2021-25</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> revisits <a href="https://www.smartkarma.com/entities/ptt-exploration-and-production-public-company-limited" target="_blank" rel="noopener"> PTT E&amp;P (PTTEP TB)</a>, which is targeting petroleum sales growth at 6% CAGR in next 5 years. The company rolled out its 5-year investment plan allocating US$23.6bn towards long-term growth.</p>
<p>In <a href="https://www.smartkarma.com/insights/gunkul-power-business-to-drive-2021-earnings" target="_blank" data-smartkarma-citation="insights:45996" rel="noopener">GUNKUL: Power Business to Drive 2021 Earnings</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> returns to look at <a href="https://www.smartkarma.com/entities/gunkul-engineering-pcl" target="_blank" data-smartkarma-citation="entities:15272:1" rel="noopener">Gunkul Engineering (GUNKUL TB)</a> post its analyst briefing. </p>
<p>In<a href="https://www.smartkarma.com/insights/ace-better-gross-margin-but-we-stay-on-hold" target="_blank" rel="noopener"> ACE: Better Gross Margin but We Stay on HOLD</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> maintains a "HOLD" son <a href="https://www.smartkarma.com/entities/absolute-clean-energy-pcl" target="_blank" data-smartkarma-citation="entities:29155:1" rel="noopener">Absolute Clean Energy PCL (ACE TB)</a>. He thinks ACE deserves to trade at a premium to Thai Utilities due to its pronounced growth prospects and targets a 2021E PE of 23.2x. </p>
<p>In<a href="https://www.smartkarma.com/insights/teamg-value-play-in-consulting-to-benefit-from-government-stimulus" target="_blank" rel="noopener"> TEAMG: Value Play in Consulting to Benefit from Government Stimulus,</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> maintains a BUY recommendation on <a href="https://www.smartkarma.com/entities/team-consulting-engineering-and-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:29175:1" rel="noopener">TEAM Consulting Engineering and Management (TEAMG TB)</a> with an unchanged target price of Bt2.81, implying an upside of 29% from the current share price.</p>
</div><h3>Credit Insights</h3><p>In<a href="https://www.smartkarma.com/insights/abm-investama-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" rel="noopener"> ABM Investama - Earnings Flash - 9M FY 2020 Results - Lucror Analytics</a>, credit specialist<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> provides a bird's eye view on<a href="https://www.smartkarma.com/entities/abm-investama-tbk-pt" target="_blank" rel="noopener"> ABM Investama (ABMM IJ)</a>. </p><p>In<a href="https://www.smartkarma.com/insights/morning-views-asia-pan-brothers-soechi-lines" target="_blank" rel="noopener"> Morning Views Asia: Pan Brothers, Soechi Lines</a>, our friends<a href="https://www.smartkarma.com/companies/lucror-analytics" target="_blank" rel="noopener"> Lucror Analytics</a> zero in on<a href="https://www.smartkarma.com/entities/pan-brothers-tbk-pt" target="_blank" rel="noopener"> Pan Brothers (PBRX IJ)</a>'s plan issue up to USD 350 mn of 5-Year Notes.  </p><p>In<a href="https://www.smartkarma.com/insights/morning-views-asia-agung-podomoro-land-guangzhou-r-f-properties-indika-energy-jingrui-holdings" target="_blank" rel="noopener"> Morning Views Asia: Agung Podomoro Land, Guangzhou R&amp;F Properties, Indika Energy, Jingrui Holdings</a>, credit specialist<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> provides an initial view on<a href="https://www.smartkarma.com/entities/agung-podomoro-land-tbk-pt" target="_blank" rel="noopener"> Agung Podomoro Land (APLN IJ)</a> and<a href="https://www.smartkarma.com/entities/indika-energy-tbk-pt" target="_blank" rel="noopener"> Indika Energy (INDY IJ)</a> Q32020 results.</p><p>In<a href="https://www.smartkarma.com/insights/indika-energy-tear-sheet-lucror-analytics-0543e70b-5604-4676-8d27-19456ce1bf12" target="_blank" rel="noopener"> Indika Energy - Tear Sheet - Lucror Analytics</a>,<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> provides a bird's eye view of<a href="https://www.smartkarma.com/entities/indika-energy-tbk-pt" target="_blank" rel="noopener"> Indika Energy (INDY IJ)</a>.  </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.  
Let's get DigitalThe Monetary Authority of Singapore (MAS) announced last week that it will award a full digital bank license to Sea Ltd (SE US) and to a consortium including Grab (0967655D SP) and Singtel (ST SP) in a move to liberalize the local banking industry. Like traditional banks, these players will provide retail customers with services such as opening accounts, deposits, as well as issuing debit and credit cards, The difference being that digital banks will not have a physical presence and all banking services will be done online. More below the fold...Equity Bottom UpIn Bank Negara Indonesia Persero (BBNI IJ) - Still More Pain to Come, CrossASEAN insight provider Angus Mackintosh revisits Bank Negara Indonesia Persero (BBNI IJ) after a call with management revealing some continuing risks on the horizon.In Gojek and Grab Merger Wishful Thinking?, Angus Mackintosh zeros in on the resurgence of rumors of a merger between Gojek (1379371D IJ) and Grab (0967655D SP), which looks like wishful thinking from a Grab perspective, and indeed from Softbank's major shareholder. In Prodia Widyahusada (PRDA IJ) - Testing Times a Positive, CrossASEAN insight provider Angus Mackintosh returns to look at Indonesian diagnostics leader Prodia Widyahusada (PRDA IJ), after its positive 3Q2020 results.In Thai Corona Crisis (December): The Looming Shadow of Myanmar,  Thai guru Athaporn Arayasantiparb, CFA revisits the pandemic situation in Thailand after a number of infected Burmese workers illegally crossed into Thailand without proper health checks. In Bank Danamon – Profit Transformation Not Recognized, banking specialist Daniel Tabbush reports back on Bank Danamon Indonesia (BDMN IJ)'s Q32020 results. He sees that BDMN having the potential to see a significant rebound in ROA. In Silicon Stories N: Humanica and RS Tout Their Online Credentials, Thai guru Athaporn Arayasantiparb, CFA reports back after visiting two companies that clearly benefit from the remote economy popularized by the pandemic including Humanica PCL (HUMAN TB) and RS PCL (RS TB).In Malaysia CIMB Group – Reserve Cover Light Still, banking specialist Thomas J. Monaco discusses 3Q2020  results from CIMB Group Holdings (CIMB MK) and highlights two important trends.In Kerry Express IPO: Valuation Insights, IPO specialist Arun George returns to look at Kerry Express Thailand (KEX TB) valuations after providing a view on the company's 3Q20 results. Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. 
In TFG: Solid Outlook, Though It Should Retreat from 3Q20 Peak, Country Group report back after the Thai Foods Group Public Company (TFG TB) analyst meeting. 
In PTTEP: Target to Achieve 6% CAGR Sales Growth in 2021-25, Country Group revisits  PTT E&amp;P (PTTEP TB), which is targeting petroleum sales growth at 6% CAGR in next 5 years. The company rolled out its 5-year investment plan allocating US$23.6bn towards long-term growth.
In GUNKUL: Power Business to Drive 2021 Earnings, Country Group returns to look at Gunkul Engineering (GUNKUL TB) post its analyst briefing. 
In ACE: Better Gross Margin but We Stay on HOLD, Dr. Andrew Stotz, CFA maintains a "HOLD" son Absolute Clean Energy PCL (ACE TB). He thinks ACE deserves to trade at a premium to Thai Utilities due to its pronounced growth prospects and targets a 2021E PE of 23.2x. 
In TEAMG: Value Play in Consulting to Benefit from Government Stimulus,Dr. Andrew Stotz, CFA maintains a BUY recommendation on TEAM Consulting Engineering and Management (TEAMG TB) with an unchanged target price of Bt2.81, implying an upside of 29% from the current share price.
Credit InsightsIn ABM Investama - Earnings Flash - 9M FY 2020 Results - Lucror Analytics, credit specialist Trung Nguyen provides a bird's eye view on ABM Investama (ABMM IJ). In Morning Views Asia: Pan Brothers, Soechi Lines, our friends Lucror Analytics zero in on Pan Brothers (PBRX IJ)'s plan issue up to USD 350 mn of 5-Year Notes.  In Morning Views Asia: Agung Podomoro Land, Guangzhou R&amp;F Properties, Indika Energy, Jingrui Holdings, credit specialist Trung Nguyen provides an initial view on Agung Podomoro Land (APLN IJ) and Indika Energy (INDY IJ) Q32020 results.In Indika Energy - Tear Sheet - Lucror Analytics, Trung Nguyen provides a bird's eye view of Indika Energy (INDY IJ).  

The Week that Was in ASEAN@Smartkarma - Let's Get Digital, BNI's Pains, and Diagnostic Labs

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

<p>Initially, the worst part of the pandemic appeared to be behind us in April, but the situation changed in September when waves of infected Burmese workers crossed into Thailand without proper health checks. We address this and other developments in this review, namely:</p><ul>
<li>
<strong>Thailand Focus. </strong>At least, four companies provided good perspective to the risk and opportunities created by COVID-19, such as: 1) Entry of Big Tech; 2) high unemployment amongst the young; and 3) market share consolidation.</li>
<li>
<strong>Government aid</strong>. Prior to his resignation, Finance Minister Preedee Daochai focused on cutting costs for consumers and avoiding more debt, even as his successor focuses on job creation.</li>
<li>
<strong>Needle opportunities. </strong>The asymmetric global recovery means that demand for medical products such a surgical gloves, needles, and syringes remain very strong. TM and STGT  remains the spotlight. </li>
<li>
<strong>Domestic travel </strong>has become increasingly important to the sector, accounting for 60-70% in the near term, with rising concentration at top tier hotels who discount.</li>
<li>
<strong>Playing the Global Themes. </strong>As Europe is hit by a second wave and China re-opens for business, we look at a few Thai stocks that tend to benefit or lose out from global themes in the short to medium term. (Winners: TVO, Asia Soft, TNR. Losers: CRC, MINT)</li>
</ul>

Initially, the worst part of the pandemic appeared to be behind us in April, but the situation changed in September when waves of infected Burmese workers crossed into Thailand without proper health checks. We address this and other developments in this review, namely:

Thailand Focus. At least, four companies provided good perspective to the risk and opportunities created by COVID-19, such as: 1) Entry of Big Tech; 2) high unemployment amongst the young; and 3) market share consolidation.

Government aid. Prior to his resignation, Finance Minister Preedee Daochai focused on cutting costs for consumers and avoiding more debt, even as his successor focuses on job creation.

Needle opportunities. The asymmetric global recovery means that demand for medical products such a surgical gloves, needles, and syringes remain very strong. TM and STGT  remains the spotlight. 

Domestic travel has become increasingly important to the sector, accounting for 60-70% in the near term, with rising concentration at top tier hotels who discount.

Playing the Global Themes. As Europe is hit by a second wave and China re-opens for business, we look at a few Thai stocks that tend to benefit or lose out from global themes in the short to medium term. (Winners: TVO, Asia Soft, TNR. Losers: CRC, MINT)


Thai Corona Crisis (December): The Looming Shadow of Myanmar

<p>The government has handled several minor demonstrations, but the problem intensified in October and simply won't go away. In this review, we look at this new crisis in greater detail.</p><ul>
<li>
<strong>The Situation since October. </strong>Anti-government protests became a daily event in Thailand even as the country gears up for its regional elections. Fortunately, clashes between royalist and anti-monarchists remained relatively tame.</li>
<li>
<strong>Roots of the crisis.</strong> A multi-faction protest with conflicting agendas does not explode in one day. We trace this crisis to<em> five key factors: the odd Senate appointment, les majeste laws, social media, the Prime Minister's own actions, and the economic weakness.</em>
</li>
<li>
<strong>Potential solution. </strong>After discussing with several business and political watchers, we believe a short term victory for the government but a long term victory by the protesters is the most likely outcome. The current deadlock could extend for several months.</li>
<li>
<strong>Implication on Thai equities. </strong>Hotels and transport stocks will be most affected by the protest. Defensives, healthcare, and WFH plays should be beneficiaries.</li>
</ul>

The government has handled several minor demonstrations, but the problem intensified in October and simply won't go away. In this review, we look at this new crisis in greater detail.

The Situation since October. Anti-government protests became a daily event in Thailand even as the country gears up for its regional elections. Fortunately, clashes between royalist and anti-monarchists remained relatively tame.

Roots of the crisis. A multi-faction protest with conflicting agendas does not explode in one day. We trace this crisis to five key factors: the odd Senate appointment, les majeste laws, social media, the Prime Minister's own actions, and the economic weakness.


Potential solution. After discussing with several business and political watchers, we believe a short term victory for the government but a long term victory by the protesters is the most likely outcome. The current deadlock could extend for several months.

Implication on Thai equities. Hotels and transport stocks will be most affected by the protest. Defensives, healthcare, and WFH plays should be beneficiaries.


Dissecting the 2020 Thai Political Crisis

<div class="content-highlight">
<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>
</div>
<hr>
<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>
<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

Equity Bottom-Up

<p>For the upcoming year, we have selected 10 stocks for our country portfolio, and they can be broken down into three groups: </p><ul>
<li>
<strong>Big cap picks. </strong>Big caps tend to outperform during times of strong QE flows. These include our top pick in large sectors except energy (BBL, AIS), the world's most valuable airport (AOT), and MINT (Thailand's only top 20 global hotel chain).</li>
<li>
<strong>Recent listings. </strong>CRC was listed in 2020 and is considered an important recovery play. In particular, we are excited about two new listings in 2021 as well, namely NForce and Kerry (Thailand).</li>
<li>
<strong>Small cap rebounds. </strong>Interestingly, a number of small cap stocks can also stand out and provide your portfolio with alpha. These include contractor SKY, massage operator SPA, and the country's incredibly fast-growing gaming company AS (AsiaSoft).</li>
</ul>

For the upcoming year, we have selected 10 stocks for our country portfolio, and they can be broken down into three groups: 

Big cap picks. Big caps tend to outperform during times of strong QE flows. These include our top pick in large sectors except energy (BBL, AIS), the world's most valuable airport (AOT), and MINT (Thailand's only top 20 global hotel chain).

Recent listings. CRC was listed in 2020 and is considered an important recovery play. In particular, we are excited about two new listings in 2021 as well, namely NForce and Kerry (Thailand).

Small cap rebounds. Interestingly, a number of small cap stocks can also stand out and provide your portfolio with alpha. These include contractor SKY, massage operator SPA, and the country's incredibly fast-growing gaming company AS (AsiaSoft).


Thai Strategy 2021 (Part 2): Top 10 Stock Picks

Thailand

Asphere Innovations Public Company Limited is an online entertainment services. The Company distributes online games and computer games, and also provides related services, covering the website services for game portals and the development of casual games. Asphere Innovations serves customers in Thailand.

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Asphere Innovations (AS TB)

The Week that Was in ASEAN@Smartkarma - Let's Get Digital, BNI's Pains, and Diagnostic Labs

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Thai Corona Crisis (December): The Looming Shadow of Myanmar

Just when Thailand is ready to leave the COVID-19 scene, Myanmar pulls them back in with a new outbreak. The Thai government comes up with new...

Athaporn Arayasantiparb, CFA

Dissecting the 2020 Thai Political Crisis

The protest dragged on after October, and there are several ways this could end. Hardest hit are the retailers and BTS, while defensives, WFH...

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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...

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Thai Strategy 2021 (Part 2): Top 10 Stock Picks

Go with big caps (BBL, MINT) to catch the QE wave. Give the new listings (CRC, KEX) a shot, and don't miss out on AsiaSoft, our ultimate top pick.

Athaporn Arayasantiparb, CFA

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