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

<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> released a solid set of 1H2021 results, which underlined its resilience in the face of COVID-19 but a real stand out from the numbers were the ongoing successes from its digital strategies both in terms of promoting products through online expos, as well as the continuing growth in both of transactional and digital banking franchises. 
<a href="https://www.bloomberg.com/quote/BBCA:IJ" target="_blank" rel="noopener">PT Bank Central Asia</a> recently announced that it will invest US$200m into its digital arm to fend off competition from new entrants to digital banking.
The bank will use the fresh funds to help Blu to increase market share ahead of an IPO within the next two years. <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> plans to increase Blu’s capital to IDR4tn (US$278m), from around IDR1tn currently.
<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> will focus on winning more merchants, partners, and customers for Blu and intends to maintain a majority stake in the entity after listing.
<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> is already well ahead of its peers and any digital player on mobile banking and is Indonesia's leading bank in terms of transactional banking.
The bank saw 54% of all transactions by value and 86% of transactions by volume going through mobile or internet banking in 1H2021. This gives it access to high levels of CASA, providing the bank with a very low cost of funds.
Our view is that new digital players are more likely to take market share from smaller banks rather than <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 see the bank maintaining its lead in transactional banking in Indonesia. Blu also has the advantage of being backed by a well-known and trusted lender, which will help to attract new customers. 
<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> trades on 4x FY21E PBV and is forecast to generate an ROE of 15.5% for FY21E and 17.0% in FY22E. It is one of the best-managed banks in Indonesia with a very strong risk management culture combined with a dynamic and innovative management culture, which coupled with its lead in transactional banking, allows the bank to command a significant premium over its peers.

Bank Central Asia (BBCA IJ) released a solid set of 1H2021 results, which underlined its resilience in the face of COVID-19 but a real stand out from the numbers were the ongoing successes from its digital strategies both in terms of promoting products through online expos, as well as the continuing growth in both of transactional and digital banking franchises. 
PT Bank Central Asia recently announced that it will invest US$200m into its digital arm to fend off competition from new entrants to digital banking.
The bank will use the fresh funds to help Blu to increase market share ahead of an IPO within the next two years. Bank Central Asia (BBCA IJ) plans to increase Blu’s capital to IDR4tn (US$278m), from around IDR1tn currently.
Bank Central Asia (BBCA IJ) will focus on winning more merchants, partners, and customers for Blu and intends to maintain a majority stake in the entity after listing.
Bank Central Asia (BBCA IJ) is already well ahead of its peers and any digital player on mobile banking and is Indonesia's leading bank in terms of transactional banking.
The bank saw 54% of all transactions by value and 86% of transactions by volume going through mobile or internet banking in 1H2021. This gives it access to high levels of CASA, providing the bank with a very low cost of funds.
Our view is that new digital players are more likely to take market share from smaller banks rather than Bank Central Asia (BBCA IJ) and see the bank maintaining its lead in transactional banking in Indonesia. Blu also has the advantage of being backed by a well-known and trusted lender, which will help to attract new customers. 
Bank Central Asia (BBCA IJ) trades on 4x FY21E PBV and is forecast to generate an ROE of 15.5% for FY21E and 17.0% in FY22E. It is one of the best-managed banks in Indonesia with a very strong risk management culture combined with a dynamic and innovative management culture, which coupled with its lead in transactional banking, allows the bank to command a significant premium over its peers. 

PT Bank Central Asia (BBCA IJ) - The Future Is Blu

<a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> has just announced plans for a long-awaited rights issue, representing 23.25% of its total equity, which potentially lifts an overhang for the bank.
Part of the proceeds of the rights issue will be used to acquire government pawnshop operator, PT Pegadaian, as well as ultra-micro lender PT Permodalan Nasional Madani (PNN). 
<a href="https://www.smartkarma.com/entities/bank-rakyat-indo-agroniaga" target="_blank" data-smartkarma-citation="entities:16626:1" rel="noopener">Bank Rakyat Indo Agroniaga (AGRO IJ)</a>,  a subsidiary of <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a>, has already been selected as its digital banking arm. Given that there is significant excess capital being generated from this rights issue after the expropriation value on the acquisitions, we see <a href="https://www.smartkarma.com/entities/bank-rakyat-indo-agroniaga" target="_blank" data-smartkarma-citation="entities:16626:1" rel="noopener">Bank Rakyat Indo Agroniaga (AGRO IJ)</a> as a potential recipient of some of this new capital.
One notable digital player which has yet to enter the space in Indonesia is <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> and there is already a relationship between <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> and <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a>, with the bank's venture capital arm recently investing in <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>. 
We see a strong likelihood of some form of collaboration between <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> and <a href="https://www.smartkarma.com/entities/bank-rakyat-indo-agroniaga" target="_blank" data-smartkarma-citation="entities:16626:1" rel="noopener">Bank Rakyat Indo Agroniaga (AGRO IJ)</a>, which would be mutually beneficial.
We take a positive view on both <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> after the announcement of the rights issue, with approval likely on 22nd July. We also like <a href="https://www.smartkarma.com/entities/bank-rakyat-indo-agroniaga" target="_blank" data-smartkarma-citation="entities:16626:1" rel="noopener">Bank Rakyat Indo Agroniaga (AGRO IJ)</a>, more especially if it ties up with <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>.

Bank Rakyat Indonesia Persero (BBRI IJ) has just announced plans for a long-awaited rights issue, representing 23.25% of its total equity, which potentially lifts an overhang for the bank.
Part of the proceeds of the rights issue will be used to acquire government pawnshop operator, PT Pegadaian, as well as ultra-micro lender PT Permodalan Nasional Madani (PNN). 
Bank Rakyat Indo Agroniaga (AGRO IJ),  a subsidiary of Bank Rakyat Indonesia Persero (BBRI IJ), has already been selected as its digital banking arm. Given that there is significant excess capital being generated from this rights issue after the expropriation value on the acquisitions, we see Bank Rakyat Indo Agroniaga (AGRO IJ) as a potential recipient of some of this new capital.
One notable digital player which has yet to enter the space in Indonesia is Grab and there is already a relationship between Grab and Bank Rakyat Indonesia Persero (BBRI IJ), with the bank's venture capital arm recently investing in Grab. 
We see a strong likelihood of some form of collaboration between Grab and Bank Rakyat Indo Agroniaga (AGRO IJ), which would be mutually beneficial.
We take a positive view on both Bank Rakyat Indonesia Persero (BBRI IJ) after the announcement of the rights issue, with approval likely on 22nd July. We also like Bank Rakyat Indo Agroniaga (AGRO IJ), more especially if it ties up with Grab.

Bank Rakyat Indonesia (BBRI IJ) - Ultra-Micro and Digital Aspirations in Place

Indonesia

PT Bank Amar Indonesia Tbk. (AMAR:IJ) Originally established in 1991 in Surabaya, Indonesia as a BUKU I bank. Subsequently embarked on a digital transformation in 2014 under new shareholders and a new management team. Successfully launched Indonesia’s first digital lending product in 2015 with full regulatory approval

Offers unsecured digital (app-based) micro-loans under the brand-name, TUNAIKU, to Retail and MSME customers. Operations Relies on proprietary credit scoring models underpinned by non-traditional data and predictive analytics.

Continue to focus on digital-only banking products such as recently launched digital banking app, SENYUMKU, All-in-one platform for banking services including digital payments, account aggregation and financial planning tools.

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Amar Bank (AMAR IJ)

PT Bank Central Asia (BBCA IJ) - The Future Is Blu

Bank Centra Asia will inject more funds into its standalone digital bank BCA Digital or Blu to help fend off competition from new digital players...

Angus Mackintosh

Bank Rakyat Indonesia (BBRI IJ) - Ultra-Micro and Digital Aspirations in Place

We are positive Bank Rakyat Indonesia after the announcement of a long-awaited rights issue. We also like Bank Rakyat Indo Agroniaga (AGRO IJ),...

Angus Mackintosh

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