External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>ASP hikes ahead of 2022F excise tax hike</p><div class="content-highlight"><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></div>

ASP hikes ahead of 2022F excise tax hikeContent 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.

Gudang Garam (GGRM IJ) - ASP hikes ahead of 2022F excise tax hike

Partner and Fund Manager, River Valley Asset Management

Jamshed Desai

Partner and Fund Manager

Singapore-based boutique asset management firm

River Valley Asset Management

River Valley Asset Management is a Singapore-based boutique asset management firm. Our team at RVAM strongly believes in being a trusted steward of our clients' wealth across generations.

Each of our fund managers has years of rich portfolio management experience over multiple market cycles at world-class investment houses. We bring our clients the combined strength of our investment team to manage their financial portfolios and to provide bespoke guidance on all aspects of their financial health.

We offer multi-asset class expert investment advice to accredited investors who are family offices, high net worth individuals and institutional investors to preserve and grow our clients' wealth.

The fund management team of the company includes Homiyar Vasania, Anand Ramachandran and Jamshed Desai.

Thematic (Sector/Industry)

<p>The bear arguments for not owning tobacco are beginning to sound like scratched LP records to us. It is all in the price, as they say. It would be worth casting an eye on the valuations of tobacco stocks globally and a few regional listed entities to illustrate how significantly they have derated in recent times. Looking at sell-side consensus estimates too, earnings expectations of investors over the next 2-3 years are perhaps better now from what they were three years back and yet stocks trade at trough multiples.</p><p>Putting it all together, we are at an important inflection point for tobacco stocks across the world. The business is transitioning in the safe hands of large well-funded multinationals that have stood the tests of time. Their cash-flows are far from being threatened by regulation or technological disruptions. The current state of flux in fixed income markets has slammed the brakes on these stocks, which we think is temporary. Truly long-term value-biased investors with a penchant for cash-flows and yield ought to consider tobacco stocks here and now.</p>

The bear arguments for not owning tobacco are beginning to sound like scratched LP records to us. It is all in the price, as they say. It would be worth casting an eye on the valuations of tobacco stocks globally and a few regional listed entities to illustrate how significantly they have derated in recent times. Looking at sell-side consensus estimates too, earnings expectations of investors over the next 2-3 years are perhaps better now from what they were three years back and yet stocks trade at trough multiples.Putting it all together, we are at an important inflection point for tobacco stocks across the world. The business is transitioning in the safe hands of large well-funded multinationals that have stood the tests of time. Their cash-flows are far from being threatened by regulation or technological disruptions. The current state of flux in fixed income markets has slammed the brakes on these stocks, which we think is temporary. Truly long-term value-biased investors with a penchant for cash-flows and yield ought to consider tobacco stocks here and now.

Indonesia

PT Wismilak Inti Makmur Tbk is a manufacturer of of premium brand cigarettes.

PT Ultrajaya Milk Industry and Trading Company Tbk operates in the food and beverage industry. The Company produces aseptic drinks such as liquid milk, fruit juices and health drinks. Ultrajaya Milk also produces butter, powder milk and sweet condensed milk.

PT Japfa Comfeed Indonesia Tbk manufactures animal feed, breeds and processes chickens, and operates aquaculture farms.  The Company trades its products domestically and internationally.

PT Siantar Top Tbk manufactures a variety of snack food products.  The Company produces snack noodles, crackers, and candies under the brand names Fuji Mie, Mie Goreng, Olala, Tamiku, Twistko, Tic-Tic, Twistball, Fuji Chips, Tovie Candy, Balico-Kelapa, and XUXU.

PT Multi Bintang Indonesia Tbk manufactures beer. The Company's main products include beer and stout.

PT Indofood Sukses Makmur Tbk and its subsidiaries manufacture instant noodles, wheat flour, baby food, food seasonings, coffee, cooking oil, and snacks.

Sinar Mas Agro Resources and Technology Tbk PT and its subsidiaries develops oil palm and tea plantations.  The Company produces and trades crude palm oil, palm kernel oil, tea, and refined palm products such as cooking oil and margarine.  Sinar Mas also manufactures packaging products such as bottles and caps as well as provides management services.

Sinar Mas Agro Resources and Technology Tbk PT (SMAR IJ)

Sinar Mas Agro Resources and Technology Tbk PT

PT Astra Agro Lestari Tbk operates rubber plantations and manufactures cooking oil. Through its subsidiaries,  the Company also operates a variety of other plantations such as palm oil, tea, and cocoa plantations.

PT Sawit Sumbermas Sarana Tbk operates in the agriculture industry. The Company trades in palm oil.

PT Mayora Indah Tbk manufactures candies and cookies.  Through its subsidiaries, the Company also manufactures food, coffee powder, instant coffee, and cocoa beans.

Vector Group Ltd., through its subsidiaries, manufactures and sells cigarettes in the United States.  The Company is also involved in the real estate business through its subsidiary.

Godfrey Phillips India Limited manufactures and distributes cigarettes, smoking tobacco and cigars.  The Group's brands include Black & White Kingsize Filter, Four Square Kingsize Filter, Cavanders Navy Cut Regular, Red & White, Anand and Leader.  The Company also manufactures Virgin Gold and Philip's Gold cigarette tobacco.

British American Tobacco Bangladesh Company Limited manufactures and sells cigarettes in Bangladesh. The company offers its products under the Benson & Hedges, John Player Gold Leaf, Pall Mall, Capstan, Star, Pilot, Hollywood, Derby, and Bristol brands. It also exports tobacco leafs. The company was formerly known as Bangladesh Tobacco Company Limited and changed its name to British American Tobacco Bangladesh Company Limited in 1998. British American Tobacco Bangladesh Company Limited was founded in 1910 and is headquartered in Dhaka, Bangladesh. British American Tobacco Bangladesh Company Limited is a subsidiary of Raleigh Investment Co. Ltd.

British American Tobacco Bangl (BATBC BD)

Eastern Tobacco produces cigarettes, cigars, pipe tobacco, cigarette rolling tobacco and water pipe tobacco.  The Company also produces related products including filter rods, tobacco flakes, paper packets  and printed materials.

Universal Corporation is an independent leaf tobacco merchant.  The Company has additional operations in agri-products and the distribution of lumber and building products.  Universal sells primarily flue-cured and burley tobaccos to manufacturers located throughout the world.

VST Industries Ltd. manufactures and distributes cigarettes and tobacco products. The Company's cigarette brands include "Charminar Specials," "Shah-IDeccan," "Charms Virginia Filter Kings," "Vazir," "Qila" and "Ambassador." VST Industries sells its products in India and abroad.

Ceylon Tobacco Company PLC manufactures and markets cigarettes and smoking tobacco products.

Turning Point Brands, Inc. provides tobacco products. The Company offers a wide range of products, including moist snuff, loose leaf chewing tobacco, cigarette papers, make-your-own cigar wraps and cigar smoking tobacco, cigars, and liquid and tobacco vapor products.

British American Tobacco Malaysia Berhad manufactures, imports, and sells cigarettes, pipe tobaccos, cigars, and luxury consumer products.  The Company also provides travel and advertising and promotional services.

Thai Union Group Public Company Limited produces and exports frozen and canned seafood products including frozen tuna loin, shrimp and cephalopod. The Company also produces canned pet foods from by products of its seafood process.  Additionally, the Company produces fish snack and canned tuna which are marketed locally.

PT Gudang Garam Tbk manufactures and distributes cigarettes and operates activities related to the cigarette industry. Through its subsidiaries, the Company also operates in the paper-related activities.

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Gudang Garam (GGRM IJ)