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

<p>Thailand has found out an interesting mix of vaccines that is so far safe with a number of Thai as clinical trials that led the government to regain its confidence in the country's reopening. The company's share price has lagged the Thai Index by around 12% and it is currently trading at 7% PBR to its 5 years historical PBR. The downside may come from the slow down in the vaccination drive and also from the potential of further virus mutataion. Nonetheless, Thailand is recovering from the COVID-19 as herd immunity in China is expected to be achieved by end of this year thus a potential for a revenue increment in the next year. </p>

Thailand has found out an interesting mix of vaccines that is so far safe with a number of Thai as clinical trials that led the government to regain its confidence in the country's reopening. The company's share price has lagged the Thai Index by around 12% and it is currently trading at 7% PBR to its 5 years historical PBR. The downside may come from the slow down in the vaccination drive and also from the potential of further virus mutataion. Nonetheless, Thailand is recovering from the COVID-19 as herd immunity in China is expected to be achieved by end of this year thus a potential for a revenue increment in the next year. 

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

<div class="content-highlight">
<p>A call with <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> management revealed ongoing pressure from the latest wave of COVID-19 in Thailand, which continues to impact the retail business under Big C but there is some light at the end of the tunnel with the company continuing to focus on renovating and converting stores, as well as expanding its overall network including its omnichannel network.</p>
</div>
<p>The company's recent results saw sales decrease by -5.4% YoY to THB 34,161m in 2Q2021 mainly due to the decline in its retail business under the modern supply chain, which continued to be impacted by COVID-19 related issues. Despite the ongoing third wave in Thailand 3Q2020 is looking better on a YoY basis. </p>
<p>Currently, 29 out of 77 provinces are dark red zones currently but this includes all the most populous areas of Thailand. Big C continues to see strong growth from food but faces pressure as Softline cannot be sold (non-essential) and non-food overall is a drag.</p>
<p>In terms of formats, Mini Big C and the company's supermarket format under The Food Place has been performing relatively well. Mini Big C are more like proximity mini-markets rather than convenience stores. </p>
<p>Big C also continues to pursue its omnichannel approach to sales, which involves using third party operators but also using call and chat avenues through Line and Whatsapp. </p>
<p>The company is also ramping up the renovations of its existing stores and has had a good experience so far with this exercise in terms of improving returns</p>
<p>The key catalyst for the retail business will come from a recovery in the tourism business, given that some of the company's stores had heavy exposure to sales to tourists pre-pandemic.</p>
<p>The company's packaging supply chain business saw a resilient performance in 2Q2021, with especially strong growth from its glass bottling business.</p>
<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> saw strong performance in its consumer supply chain business, mainly due to the addition of Unicharm as a new client for Thailand for traditional markets.</p>
<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> healthcare and technical division registered a steady performance in 2Q2021 with COVID-19 related products doing well plus new hospital budget-related orders driving growth.</p>
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<p>The company continues to make progress on its ESG credentials and became part of FTSE4Good Emerging Markets and FTSE4Good ASEAN 5 indices at the end of June.</p>
<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> is an interesting proxy to the consumer recovery, not just in Thailand but also to South East Asia, given its exposure in Vietnam, and Malaysia. It remains cheap relative to peers, trading on 25.0x FY22E PER and 21.4x FY23E PER, with forecast EPS growth of +41.2% and +16.6%% for FY22E and FY23E respectively.</p>


A call with Berli Jucker (BJC TB) management revealed ongoing pressure from the latest wave of COVID-19 in Thailand, which continues to impact the retail business under Big C but there is some light at the end of the tunnel with the company continuing to focus on renovating and converting stores, as well as expanding its overall network including its omnichannel network.

The company's recent results saw sales decrease by -5.4% YoY to THB 34,161m in 2Q2021 mainly due to the decline in its retail business under the modern supply chain, which continued to be impacted by COVID-19 related issues. Despite the ongoing third wave in Thailand 3Q2020 is looking better on a YoY basis. 
Currently, 29 out of 77 provinces are dark red zones currently but this includes all the most populous areas of Thailand. Big C continues to see strong growth from food but faces pressure as Softline cannot be sold (non-essential) and non-food overall is a drag.
In terms of formats, Mini Big C and the company's supermarket format under The Food Place has been performing relatively well. Mini Big C are more like proximity mini-markets rather than convenience stores. 
Big C also continues to pursue its omnichannel approach to sales, which involves using third party operators but also using call and chat avenues through Line and Whatsapp. 
The company is also ramping up the renovations of its existing stores and has had a good experience so far with this exercise in terms of improving returns
The key catalyst for the retail business will come from a recovery in the tourism business, given that some of the company's stores had heavy exposure to sales to tourists pre-pandemic.
The company's packaging supply chain business saw a resilient performance in 2Q2021, with especially strong growth from its glass bottling business.
Berli Jucker (BJC TB) saw strong performance in its consumer supply chain business, mainly due to the addition of Unicharm as a new client for Thailand for traditional markets.
Berli Jucker (BJC TB) healthcare and technical division registered a steady performance in 2Q2021 with COVID-19 related products doing well plus new hospital budget-related orders driving growth.



The company continues to make progress on its ESG credentials and became part of FTSE4Good Emerging Markets and FTSE4Good ASEAN 5 indices at the end of June.
Berli Jucker (BJC TB) is an interesting proxy to the consumer recovery, not just in Thailand but also to South East Asia, given its exposure in Vietnam, and Malaysia. It remains cheap relative to peers, trading on 25.0x FY22E PER and 21.4x FY23E PER, with forecast EPS growth of +41.2% and +16.6%% for FY22E and FY23E respectively.

Berli Jucker (BJC TB) - Bright Lights at the End of the Tunnel

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<p>Creador plans to raise around US$140m via selling 2.4% of MR DIY. The stock has done exceptionally well since listing, which we had covered earlier, links below. </p><p>In this note, we will run the deal through our ECM framework and talk about updates since the IPO.</p><p></p><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/mr-d-i-y-pre-ipo-largest-home-improvement-retailer-in-malaysia" target="_blank" data-smartkarma-citation="insights:35843" rel="noopener">Mr D.I.Y. Pre-IPO - Largest Home Improvement Retailer in Malaysia</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/mr-d-i-y-pre-ipo-store-walk-through-and-thoughts-on-value-proposition" target="_blank" data-smartkarma-citation="insights:36114" rel="noopener">Mr D.I.Y. Pre-IPO - Store Walk-Through and Thoughts on Value Proposition</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/mr-d-i-y-pre-ipo-small-stores-with-dominant-market-share" target="_blank" data-smartkarma-citation="insights:36402" rel="noopener">Mr D.I.Y. Pre-IPO - Peer Comparison - Small Stores with Dominant Market Share </a> </li>
<li>
<a href="https://www.smartkarma.com/insights/mr-diy-ipo-store-expansion-still-going-strong-undemanding-valuation" target="_blank" data-smartkarma-citation="insights:43929" rel="noopener">MR DIY IPO - Store Expansion Still Going Strong, Undemanding Valuation</a> </li>
<li><a href="https://www.smartkarma.com/insights/mr-diy-ipo-trading-good-demand-still-very-reasonable-valuation" target="_blank" rel="noopener">MR DIY IPO Trading - Good Demand, Still Very Reasonable Valuation</a></li>
</ul>

Creador plans to raise around US$140m via selling 2.4% of MR DIY. The stock has done exceptionally well since listing, which we had covered earlier, links below. In this note, we will run the deal through our ECM framework and talk about updates since the IPO.

Mr D.I.Y. Pre-IPO - Largest Home Improvement Retailer in Malaysia 

Mr D.I.Y. Pre-IPO - Store Walk-Through and Thoughts on Value Proposition 

Mr D.I.Y. Pre-IPO - Peer Comparison - Small Stores with Dominant Market Share  

MR DIY IPO - Store Expansion Still Going Strong, Undemanding Valuation 
MR DIY IPO Trading - Good Demand, Still Very Reasonable Valuation


MR DIY Placement - Has Done Exceptionally Well Since Listing

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

<p><strong>Yesterday analyst meeting came out with a negative tone. We maintain BUY rating with a lower target price of Bt15.0 (-4% from Previous TP), which is derived from 35xPE’1H22E, a 40% premium to Thai Consumer Discretionary.</strong></p><div>• We expect SSSG to turn negative double digit growth in 3Q21 pressured by impact from temporary store closures in Thailand and Malaysia (30% and 100% of total stores in these countries respectively), while we expect negative single digit growth in 4Q21 following a poor consumption demand.</div><div></div><div>• We foresee 3Q21 earnings to soften down both QoQ and YoY pressured by impact from the pandemic, while anticipate some recovery in 4Q21 on the back of; 1.) improving COVID-19 situation, 2.) an increase in revenue from sanitization and kitchenware products, and. 3.) big campaign launch on e-commerce platform.</div><div></div><div>• We cut our earnings forecast by 15% and 8% in 2021-22E to factor in weaker-than-expected SSSG. We assume SSSG at 1% in 2021E, decreasing from previous assumptions. A new SSSG assumption has factored a weak SSSG from impact from the 4th wave of COVID-19.</div>

Yesterday analyst meeting came out with a negative tone. We maintain BUY rating with a lower target price of Bt15.0 (-4% from Previous TP), which is derived from 35xPE’1H22E, a 40% premium to Thai Consumer Discretionary.• We expect SSSG to turn negative double digit growth in 3Q21 pressured by impact from temporary store closures in Thailand and Malaysia (30% and 100% of total stores in these countries respectively), while we expect negative single digit growth in 4Q21 following a poor consumption demand.• We foresee 3Q21 earnings to soften down both QoQ and YoY pressured by impact from the pandemic, while anticipate some recovery in 4Q21 on the back of; 1.) improving COVID-19 situation, 2.) an increase in revenue from sanitization and kitchenware products, and. 3.) big campaign launch on e-commerce platform.• We cut our earnings forecast by 15% and 8% in 2021-22E to factor in weaker-than-expected SSSG. We assume SSSG at 1% in 2021E, decreasing from previous assumptions. A new SSSG assumption has factored a weak SSSG from impact from the 4th wave of COVID-19.

HMPRO: Expect 3Q21 Earnings to Drop Both QoQ and YoY

Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

Pan-Asia Equity Bottom-up

<ul>
<li>Singapore listed MM2 Asia Ltd (MM2 SP) looks to be the most immediately actionable<br>of the 7 stocks added to our list of fallen angels.</li>
<li>Keeping in Singapore, luxury watch retailer Hour Glass (HG SP) has recently<br>commenced repurchases under a 10% buyback mandate.</li>
<li>Across to Indonesia, Bundamedik (BMHS IJ) is the latest hospital to list on the IDX.<br>They’re a premium women and children's hospital with leading IVF clinics.</li>
</ul>


Singapore listed MM2 Asia Ltd (MM2 SP) looks to be the most immediately actionable of the 7 stocks added to our list of fallen angels.
Keeping in Singapore, luxury watch retailer Hour Glass (HG SP) has recently commenced repurchases under a 10% buyback mandate.
Across to Indonesia, Bundamedik (BMHS IJ) is the latest hospital to list on the IDX. They’re a premium women and children's hospital with leading IVF clinics.


Wickhams Hill Research | Under-The-Radar Issue 1

Thailand

Home Product Center Public Company Limited is a retailer of building materials and home improvement products.

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Home Product Center (HMPRO TB)

AOT: Thailand Reopening

Thailand is recovering from the COVID-19 as herd immunity in China is expected to be achieved by end of this year thus a potential for a revenue...

Henry Soediarko

Berli Jucker (BJC TB) - Bright Lights at the End of the Tunnel

Berli Jucker's retail business under Big C continues to see pressure from COVID-19 issues but improvements are underway and it is expanding again,...

Angus Mackintosh

MR DIY Placement - Has Done Exceptionally Well Since Listing

Creador plans to raise around US$140m via selling 2.4% of MR DIY. The stock has done exceptionally well since its listing.

Sumeet Singh

HMPRO: Expect 3Q21 Earnings to Drop Both QoQ and YoY

Yesterday analyst meeting came out with a negative tone. We maintain BUY rating with a lower target price of Bt15.0 (-4% from Previous TP), which...

Pi Securities PCL, Thailand

Wickhams Hill Research | Under-The-Radar Issue 1

Singapore listed MM2 Asia Ltd (MM2 SP) looks to be the most immediately actionableof the 7 stocks added to our list of fallen angels.

Lloyd Moffatt

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