Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

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

Thematic (Sector/Industry)

<ul>
<li>We expect PH to win the 15th General Election, because it will win a majority of the seats in West Malaysia as the non-PH vote splits between UMNO and PN. </li>
<li>PH may fall short of a national majority because it competes with local parties (rather than aligning with any major ones) in Sabah-Sarawak, which may hold the final cards.</li>
<li>While that is our baseline scenario, if current polling holds, PH will comfortably form the government with Anwar as PM. Winners will be technology companies and Hong Leong group.</li>
</ul>


We expect PH to win the 15th General Election, because it will win a majority of the seats in West Malaysia as the non-PH vote splits between UMNO and PN. 
PH may fall short of a national majority because it competes with local parties (rather than aligning with any major ones) in Sabah-Sarawak, which may hold the final cards.
While that is our baseline scenario, if current polling holds, PH will comfortably form the government with Anwar as PM. Winners will be technology companies and Hong Leong group.


Malaysia: PH Is Stronger in West Malaysia, but Sabah-Sarawak May Hold Final Cards

Macroeconomics

<ul>
<li>PM Anwar's effective abandonment of the multi-racial agenda he advocated during his quarter-century in Opposition has led to large net outflows of FPI and FDI, especially in Q1CY24. </li>
<li>The trend weakening of the BoP current account was temporarily reprieved in Q1 by a sharp decline in the incomes deficit. Medium-term challenges still pressure MYR, as FX reserves stagnate.</li>
<li>Cyclical recovery likely to peter out, with structural fiscal deficit at 5.5% of GDP, and scant scope for monetary stimulus. We recommend being Underweight Malaysia, with Penang-linked stocks the exception. </li>
</ul>


PM Anwar's effective abandonment of the multi-racial agenda he advocated during his quarter-century in Opposition has led to large net outflows of FPI and FDI, especially in Q1CY24. 
The trend weakening of the BoP current account was temporarily reprieved in Q1 by a sharp decline in the incomes deficit. Medium-term challenges still pressure MYR, as FX reserves stagnate.
Cyclical recovery likely to peter out, with structural fiscal deficit at 5.5% of GDP, and scant scope for monetary stimulus. We recommend being Underweight Malaysia, with Penang-linked stocks the exception. 


Malaysia: Net Outflow of FDI and FPI Reflect Basic Haemorrhage of Trust

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> specialises in the manufacturing of automated testing equipment (ATE segment) and the provision of factory automated solutions (FAS segment). </li>
<li>Pentamaster's solid track record, exposure to structural trends (electric vehicles), profitability, cash generation and healthy balance sheet are attractive. The shares are up 12.9% YTD.</li>
<li>However, the shares reflect this story and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be buyers of any prolonged weakness.</li>
</ul>



Pentamaster Corp (PENT MK) specialises in the manufacturing of automated testing equipment (ATE segment) and the provision of factory automated solutions (FAS segment). 
Pentamaster's solid track record, exposure to structural trends (electric vehicles), profitability, cash generation and healthy balance sheet are attractive. The shares are up 12.9% YTD.
However, the shares reflect this story and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be buyers of any prolonged weakness.


Pentamaster Corp (PENT MK): Good Story, at What Price?

External broker reports(aggregated public sources), Kenanga Investment Bank Bhd

Kenanga Investment Bank Bhd

External broker reports(aggregated public sources)

Established for more than 45 years, Kenanga Investment Bank Berhad is a financial group in Malaysia with extensive experience in equity broking, investment banking, treasury, Islamic banking, listed derivatives, investment management, wealth management, structured lending and trade financing. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>We came away from our recent plant visit to INARI’s P13 and P55 plants in Bayan Lepas, Penang with a renewed conviction on the company after learning about its customer requesting the group to add in more RF testers for the upcoming US smartphone launch in September.</li><li>A positive change we noticed in the facility is the integration of its proprietary EMI machines with each RF tester which further widens the gap between the company and their competitors, increasing customer’s dependency on INARI.</li><li>Maintain OUTPERFORM with an unchanged Target Price of RM3.30 based on 28.5x FY23E EPS.</li></ul><p><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></p>

We came away from our recent plant visit to INARI’s P13 and P55 plants in Bayan Lepas, Penang with a renewed conviction on the company after learning about its customer requesting the group to add in more RF testers for the upcoming US smartphone launch in September.A positive change we noticed in the facility is the integration of its proprietary EMI machines with each RF tester which further widens the gap between the company and their competitors, increasing customer’s dependency on INARI.Maintain OUTPERFORM with an unchanged Target Price of RM3.30 based on 28.5x FY23E EPS.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.

Inari Amertron - Ramping up for a New Cycle

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/westports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:3954:1" rel="noopener">Westports Holdings (WPRTS MK)</a> will replace <a href="https://www.smartkarma.com/entities/hap-seng-consolidated-bhd" target="_blank" data-smartkarma-citation="entities:13036:1" rel="noopener">Hap Seng Consolidated (HAP MK)</a> in the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)</a> after the close of trading on 17 December.</li>
<li>
<a href="https://www.smartkarma.com/entities/hap-seng-consolidated-bhd" target="_blank" data-smartkarma-citation="entities:13036:1" rel="noopener">Hap Seng Consolidated (HAP MK)</a> is a delete on liquidity and there will be over 5 days of ADV to sell. The impact on <a href="https://www.smartkarma.com/entities/westports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:3954:1" rel="noopener">Westports Holdings (WPRTS MK)</a> is smaller.</li>
<li>
<a href="https://www.smartkarma.com/entities/hap-seng-consolidated-bhd" target="_blank" data-smartkarma-citation="entities:13036:1" rel="noopener">Hap Seng Consolidated (HAP MK)</a> could drop in the short term but underperformance vs its peers could provide a buying opportunity, especially close to implementation date.</li>
</ul>



Westports Holdings (WPRTS MK) will replace Hap Seng Consolidated (HAP MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) after the close of trading on 17 December.

Hap Seng Consolidated (HAP MK) is a delete on liquidity and there will be over 5 days of ADV to sell. The impact on Westports Holdings (WPRTS MK) is smaller.

Hap Seng Consolidated (HAP MK) could drop in the short term but underperformance vs its peers could provide a buying opportunity, especially close to implementation date.


KLCI Index Rebalance: Westports Replaces Hap Seng

Malaysia

Inari Amertron Berhad is an investment holding company involved in the electronics manufacturing services (EMS) industry. The Company provides semiconductor packaging services such as back-end wafer processing, assembly and testing for global customers in Radio Frequency (RF) and in Optoelectronic products. Inari has manufacturing facilities in Malaysia, China and Philippines.

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Inari Amertron (INRI MK)

Malaysia: PH Is Stronger in West Malaysia, but Sabah-Sarawak May Hold Final Cards

Anwar Ibrahim will be PM by the end of November. PH will win west Malaysia comfortably, but may fall short nationally because of Borneo states....

Prasenjit K. Basu

Malaysia: Net Outflow of FDI and FPI Reflect Basic Haemorrhage of Trust

Pressured by Islamist PAS, PM Anwar has abandoned his 25-year advocacy of multi-racialism. Net FDI & FPI outflows will pressure MYR. Fiscal deficit...

Prasenjit K. Basu

Pentamaster Corp (PENT MK): Good Story, at What Price?

The shares have had a strong run and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be...

Arun George

Inari Amertron - Ramping up for a New Cycle

We came away from our recent plant visit to INARI’s P13 and P55 plants in Bayan Lepas, Penang with a renewed conviction on the company

Kenanga Investment Bank Bhd

KLCI Index Rebalance: Westports Replaces Hap Seng

Westports Holdings will replace Hap Seng Consolidated in the KLCI at the December rebalance. HAP MK is a liquidity delete and passive trackers will...

Brian Freitas

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