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

Equity Bottom-Up

After the amazing Q2 2020 performance, the Q3 result was less stellar compared as the pandemic has seemed to be under control but the recent increase in the outbreak means it is the right time to cover the shorts in <a href="https://www.smartkarma.com/entities/nissin-foods-co-ltd" target="_blank" data-smartkarma-citation="entities:26062:1" rel="noopener">Nissin Foods (1475 HK)</a> and go long with the assumption that the fear factor will kick in again that will create a panic buying and once again - stay at home during the pandemic. 
For long-short investors - the long trade of Nissin Foods can be paired up with either a short in <a href="https://www.smartkarma.com/entities/mtr-corp" target="_blank" data-smartkarma-citation="entities:13289:1" rel="noopener">MTR Corp (66 HK)</a> or <a href="https://www.smartkarma.com/entities/cafe-de-coral-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2568:1" rel="noopener">Cafe De Coral Holdings (341 HK)</a> , both of which trade at ludicrous valuation while maintaining a questionable performance in the next quarter if the lockdown in Hong Kong is going to be reinstated. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/900/original/image_63144037491605899958762.png?1605899960" class="editor-image img-responsive" data-smartkarma-image-id="172900"></figure>
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source: Capital IQ
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After the amazing Q2 2020 performance, the Q3 result was less stellar compared as the pandemic has seemed to be under control but the recent increase in the outbreak means it is the right time to cover the shorts in Nissin Foods (1475 HK) and go long with the assumption that the fear factor will kick in again that will create a panic buying and once again - stay at home during the pandemic. 
For long-short investors - the long trade of Nissin Foods can be paired up with either a short in MTR Corp (66 HK) or Cafe De Coral Holdings (341 HK) , both of which trade at ludicrous valuation while maintaining a questionable performance in the next quarter if the lockdown in Hong Kong is going to be reinstated. 


source: Capital IQ


Nissin Food (1475): HK COVID-19 - Reversal of WFH Vs Going Out

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Thematic (Sector/Industry)

<ul>
<li>Record-breaking 2020 Singles-day Shopping Festival may produce some insights regarding brands winning Chinese consumers;</li>
<li>But most winning brands cannot derive an investable business in China, given the prevalent lack of persistently high ROIC.</li>
<li>We hand-pick four companies that are investable from TMall's Singles-day top brand list.</li>
</ul>


Record-breaking 2020 Singles-day Shopping Festival may produce some insights regarding brands winning Chinese consumers;
But most winning brands cannot derive an investable business in China, given the prevalent lack of persistently high ROIC.
We hand-pick four companies that are investable from TMall's Singles-day top brand list.


Quick Picks: Top Investable Brands From The 2020 Singles-Day Shopping Festival

HK/China Equity Long-Short

Osbert Tang, CFA

With more than half of the double festival holidays of China have now passed, we took an on-the-ground check for the business in the Golden Week. A walk along the Nanjing Road Pedestrian Walk in Shanghai with visits to various retail stores showed that consumption has witnessed a good, but not yet full, recovery.
We stopped by mobile phone, sportswear, jewellery and high-end luxury stores, and saw that mobile phone stores are witnessing the best customer patronage. Based on our visits, we observed that: 1.) Apple store (<a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a>) is doing better than Huawei, 2.) Nike and Adidas (<a href="https://www.smartkarma.com/entities/topsports-international" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International (6110 HK)</a>) &gt; FILA (<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>) and <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning Co Ltd (2331 HK)</a>, 3.) <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> &gt; Lao Miao (<a href="https://www.smartkarma.com/entities/fosun-international-ltd" target="_blank" data-smartkarma-citation="entities:433:1" rel="noopener">Fosun International (656 HK)</a>) and 4.) high-end luxury goods are in good demand, and this is positive to <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (601888 CH)</a>. Read on for pictures and more details.

With more than half of the double festival holidays of China have now passed, we took an on-the-ground check for the business in the Golden Week. A walk along the Nanjing Road Pedestrian Walk in Shanghai with visits to various retail stores showed that consumption has witnessed a good, but not yet full, recovery.
We stopped by mobile phone, sportswear, jewellery and high-end luxury stores, and saw that mobile phone stores are witnessing the best customer patronage. Based on our visits, we observed that: 1.) Apple store (Apple Inc (AAPL US)) is doing better than Huawei, 2.) Nike and Adidas (Topsports International (6110 HK)) &gt; FILA (Anta Sports Products (2020 HK)) and Li Ning Co Ltd (2331 HK), 3.) Chow Tai Fook Jewellery (1929 HK) &gt; Lao Miao (Fosun International (656 HK)) and 4.) high-end luxury goods are in good demand, and this is positive to Hang Lung Properties (101 HK) and China Tourism Group Duty Free Corp Ltd (601888 CH). Read on for pictures and more details.

China on the Ground: Hey, How's Your Golden Week?

Asia gaming and consumer discretionary analyst

Michael Ting

Despite the recent relaxation in travel visas to Macau from the Mainland, the recovery in sector revenues has been weaker than expected. Headwinds such as increased government scrutiny on capital outflow has likely hurt gaming sentiment demand from higher spending VIP and premium mass players. We expect these trends to continue and hence believe that Macau gaming stocks could underperform in the near term. However, beneficiaries of the capital outflow restrictions could boost domestic luxury demand and benefit stocks such as Chow Tai Fook whose share price is +17% MTD vs. -7% for the Hang Seng Index.

Despite the recent relaxation in travel visas to Macau from the Mainland, the recovery in sector revenues has been weaker than expected. Headwinds such as increased government scrutiny on capital outflow has likely hurt gaming sentiment demand from higher spending VIP and premium mass players. We expect these trends to continue and hence believe that Macau gaming stocks could underperform in the near term. However, beneficiaries of the capital outflow restrictions could boost domestic luxury demand and benefit stocks such as Chow Tai Fook whose share price is +17% MTD vs. -7% for the Hang Seng Index.

Macau: If It's Not One Thing, It's Another

Chow Tai Fook Jewellery / Equity Bottom-Up

Despite a 34% YTD increase in share price coupled with a 97% rise from the share price lows in March, we remain positive on Chow Tai Fook Jewellery (CTF)  based on our recent conversations with management. Given the continued recovery in jewellery demand in China, return of positive same store sales growth, a discerning customer base geared towards higher end items coupled with increased overall domestic consumption, we believe the stock's current valuation of 19x forward P/E (Mar 22) with +27% estimated EPS growth is justified.

Despite a 34% YTD increase in share price coupled with a 97% rise from the share price lows in March, we remain positive on Chow Tai Fook Jewellery (CTF)  based on our recent conversations with management. Given the continued recovery in jewellery demand in China, return of positive same store sales growth, a discerning customer base geared towards higher end items coupled with increased overall domestic consumption, we believe the stock's current valuation of 19x forward P/E (Mar 22) with +27% estimated EPS growth is justified.

Chow Tai Fook Jewellery: Play the Recovery

Hong Kong

Chow Tai Fook Jewellery Group Limited retails jewelry.  The Company sells rings, necklaces, earrings, pendants, bracelets, and small statues.  Chow Tai Fook Jewellery operates retail stores in China, Hong Kong, Macau, Taiwan, Malaysia, and Singapore.

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Chow Tai Fook Jewellery (1929 HK)

Nissin Food (1475): HK COVID-19 - Reversal of WFH Vs Going Out

How severe it will get in Hong Kong and will the government re-instate the lockdown. It is time to go long Nissin food and start shorting MTR and...

Henry Soediarko

Quick Picks: Top Investable Brands From The 2020 Singles-Day Shopping Festival

Most winning brands cannot lead to an investable business in China, but here are our four hand-picked rare species that are investable from TMall's...

Steven Chen

China on the Ground: Hey, How's Your Golden Week?

With more than

Osbert Tang, CFA

Macau: If It's Not One Thing, It's Another

The recovery in

Michael Ting

Chow Tai Fook Jewellery: Play the Recovery

Despite a 34% YTD increase in share price coupled with a 97% rise from the sha

Michael Ting

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)