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 Capital Markets

Cisarua Mountain Dairy / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cisarua-mountain-dairy-pt-tbk" target="_blank" data-smartkarma-citation="entities:34999:1" rel="noopener">Cisarua Mountain Dairy</a> just kicked off its public offering and has set the IPO price slightly below the top of the range and at a slight premium to peers  </li>
<li>Cimory is the leader in Indonesia for yoghurt both spoonable and drinking but has been growing its exposure to UHT milk plus consumer foods such as sausages and chicken nuggets</li>
<li>Proceeds will be used to expand capacity and distribution reach to drive future growth with the introduction of new products helping to drive near term growth. Listing 6th December.</li>
</ul>



Cisarua Mountain Dairy just kicked off its public offering and has set the IPO price slightly below the top of the range and at a slight premium to peers  
Cimory is the leader in Indonesia for yoghurt both spoonable and drinking but has been growing its exposure to UHT milk plus consumer foods such as sausages and chicken nuggets
Proceeds will be used to expand capacity and distribution reach to drive future growth with the introduction of new products helping to drive near term growth. Listing 6th December.


Cisarua Mountain Dairy (Cimory) IPO - A Legend in Dairy

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cisarua-mountain-dairy-pt-tbk" target="_blank" data-smartkarma-citation="entities:34999:1" rel="noopener">Cisarua Mountain Dairy (1939092D IJ)</a>/Cimory is seeking to raise up to IDR3,761 billion ($265 million) at an IPO price range of IDR2,780-3,160 per share. Shares will list on 6 December.</li>
<li>In <a href="https://www.smartkarma.com/insights/cisarua-mountain-dairy-cimory-ipo-initiation-creamy" target="_blank" data-smartkarma-citation="insights:61066" rel="noopener">Cisarua Mountain Dairy (Cimory) IPO Initiation: Creamy</a>, we noted Cimory is delivering strong growth in both its operating segments, rising margins and cash generation.</li>
<li>Our valuation analysis suggests that we would participate at the low end of the IPO price range.</li>
</ul>



Cisarua Mountain Dairy (1939092D IJ)/Cimory is seeking to raise up to IDR3,761 billion ($265 million) at an IPO price range of IDR2,780-3,160 per share. Shares will list on 6 December.
In Cisarua Mountain Dairy (Cimory) IPO Initiation: Creamy, we noted Cimory is delivering strong growth in both its operating segments, rising margins and cash generation.
Our valuation analysis suggests that we would participate at the low end of the IPO price range.


Cisarua Mountain Dairy (Cimory) IPO: Valuation Insights

Equity Bottom-Up

<section class="figure">
<p><a href="https://www.smartkarma.com/entities/ultrajaya-milk-industry-trading-company" target="_blank" data-smartkarma-citation="entities:13892:1" rel="noopener">Ultrajaya Milk Industry &amp; Trading (ULTJ IJ)</a> remains a high-quality proxy to the rising demand for dairy products in Indonesia, with a nearly 40% market share of the UHT market through its Ultra Milk brand.  The company is also the number one producer in ready to drink (RTD) tea drinks in cartons where it has a 77% market share with various different carton packaging options. </p>
</section>
<p><a href="https://www.smartkarma.com/entities/ultrajaya-milk-industry-trading-company" target="_blank" data-smartkarma-citation="entities:13892:1" rel="noopener">Ultrajaya Milk Industry &amp; Trading (ULTJ IJ)</a> also has various tolling agreements for the production of powdered milk and UHT drinks, with customers such as <a href="https://www.smartkarma.com/entities/unilever-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:231:1" rel="noopener">Unilever Indonesia (UNVR IJ)</a>.</p>
<p>The industry fundamentals in Indonesia are strong with relatively low rates of consumption per capita versus other South-East Asian Countries. has a low per capita consumption of milk versus its South-East Asian neighbours</p>
<section class="figure">
<p><a href="https://www.smartkarma.com/entities/ultrajaya-milk-industry-trading-company" target="_blank" data-smartkarma-citation="entities:13892:1" rel="noopener">Ultrajaya Milk Industry &amp; Trading (ULTJ IJ)</a> continues to source more than half its powdered milk requirements from overseas in the form of powdered skimmed milk and whole milk but is increasing sourcing its requirements locally together with building up its own dairy herds</p>
</section>
<section class="figure"></section>
<section class="figure">
<p>The company continued to face some pressure from COVID-19 restrictions in 1H2021 but the more positive trend that started in 1Q2021 continued into 2Q2021, especially for its core flavoured milk and carton tea products.</p>
<p>From a distribution perspective, the company continues to push more into the under-penetrated areas of Kalimantan and Sumatra. It is also increasingly helping distributors to secure financing and achieving IT connectivity with all distributors. </p>
</section>
<div class="content-highlight">
<section class="figure"><a href="https://www.smartkarma.com/entities/ultrajaya-milk-industry-trading-company" target="_blank" data-smartkarma-citation="entities:13892:1" rel="noopener">Ultrajaya Milk Industry &amp; Trading (ULTJ IJ)</a> is also continuing to focus on developing new products and has recently signed a JV with Ito En. It will also consider launching yoghurt drinks and pasteurised milk products, when the time is right, as we move into a post-COVID world. The company remains one of Indonesia's least appreciated consumer staple players, with super-strong brands and a good long term growth track record as well as good governance. </section>
</div>
<div>
<div></div>
<div>
<div>
<div class="content-remarks">
<p></p>
</div>
</div>
</div>
</div>


Ultrajaya Milk Industry &amp; Trading (ULTJ IJ) remains a high-quality proxy to the rising demand for dairy products in Indonesia, with a nearly 40% market share of the UHT market through its Ultra Milk brand.  The company is also the number one producer in ready to drink (RTD) tea drinks in cartons where it has a 77% market share with various different carton packaging options. 

Ultrajaya Milk Industry &amp; Trading (ULTJ IJ) also has various tolling agreements for the production of powdered milk and UHT drinks, with customers such as Unilever Indonesia (UNVR IJ).
The industry fundamentals in Indonesia are strong with relatively low rates of consumption per capita versus other South-East Asian Countries. has a low per capita consumption of milk versus its South-East Asian neighbours

Ultrajaya Milk Industry &amp; Trading (ULTJ IJ) continues to source more than half its powdered milk requirements from overseas in the form of powdered skimmed milk and whole milk but is increasing sourcing its requirements locally together with building up its own dairy herds



The company continued to face some pressure from COVID-19 restrictions in 1H2021 but the more positive trend that started in 1Q2021 continued into 2Q2021, especially for its core flavoured milk and carton tea products.
From a distribution perspective, the company continues to push more into the under-penetrated areas of Kalimantan and Sumatra. It is also increasingly helping distributors to secure financing and achieving IT connectivity with all distributors. 


Ultrajaya Milk Industry &amp; Trading (ULTJ IJ) is also continuing to focus on developing new products and has recently signed a JV with Ito En. It will also consider launching yoghurt drinks and pasteurised milk products, when the time is right, as we move into a post-COVID world. The company remains one of Indonesia's least appreciated consumer staple players, with super-strong brands and a good long term growth track record as well as good governance. 












Ultrajaya Milk Industry & Trading (ULTJ IJ) - Growth in a Small Carton

<section class="figure"><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> released a strong set of 2Q2021 results with +55.7% growth in TPV bringing 1H2021 TPV (Total Processing Value) growth to +54%. It reported a +37% YoY growth in revenue for 2Q2021.</section>
<section class="figure"></section>
<section class="figure"></section>
<section class="figure"></section>
<section class="figure"> The company's Mitra business continued to be the key driver, accounting for 48% of TPV in 2Q2021 versus 22% a year ago, with a growth rate of +292% YoY in 2Q2021.</section>
<section class="figure"></section>
<section class="figure"></section>
<section class="figure">There was some reduction in the take-rate in 2Q2021, which some analysts may focus on but this was explained as due to a change in product mix and temporary. We address concerns regarding the take rate later but they seem overdone.</section>
<section class="figure"></section>
<section class="figure"></section>
<section class="figure">
<section class="figure">
<section class="figure">Mitra Bukalapak continues to be the main growth engine for the company, with 2Q2021 Mitra TPV increasing by +237% YoY, to IDR14.2tn.</section>
<section class="figure"></section>
<section class="figure"></section>
</section>
<p>Mitra Bukalapak’s contribution margin after S&amp;M cost improved from -1.0% of TPV in FY2020 to -0.5% of TPV in Mitra’s operating loss as a ratio to TPV improved from 1.2% in FY20 to 0.6% in 1H2021.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"></figure>
</section>
</section>
<section class="figure"></section>
<section class="figure"><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> management re-iterated its strategy to continue to help enhance the performance of its Mitra's and sellers on the platform following a more of a Shopify model than one like <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a>.</section>
<section class="figure"></section>
<p></p>
<p><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> maintains that around 90% of its Mitra customers use only <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> given that it addresses many uses and allows them to make more money. </p>
<p><a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia</a> and Shopee are much more reliant on aggressive capital to expand, which is not an effective long-term strategy for Mitra customers. It is also difficult to discount FMCG products for any length of time given that principles keep a handle on price levels.</p>
<p>Management also revealed that its first collaboration with <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> will focus on GrabMart, providing fresh food products for GrabMart's restaurant customers but more collaboration is expected on an incremental basis going forward. <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener"></a></p>
<p><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> management is expecting annual growth in TPV of +50%-75% per annum, with 2022 seen as a potentially even stronger year, with better purchasing power coming through post-pandemic and greater vaccination levels.</p>
<p>The company expects to break even at the EBITDA level by 2023 under current expectations. This accounts for rising revenues, growing take-rates, and lower S&amp;M costs. We continue to take a positive view on the outlook on <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> and do not see the short-term contraction in the take-rate as an issue.  Valuations look quite high relative to peers but the company is much closer to breakeven versus peers and given its predominantly 1P model, revenue is not far off the gross profit. </p>
<div></div>
<div>
<div>
<div class="content-remarks">
<p></p>
</div>
</div>
</div>

Bukalapak (BUKA IJ) released a strong set of 2Q2021 results with +55.7% growth in TPV bringing 1H2021 TPV (Total Processing Value) growth to +54%. It reported a +37% YoY growth in revenue for 2Q2021.



 The company's Mitra business continued to be the key driver, accounting for 48% of TPV in 2Q2021 versus 22% a year ago, with a growth rate of +292% YoY in 2Q2021.


There was some reduction in the take-rate in 2Q2021, which some analysts may focus on but this was explained as due to a change in product mix and temporary. We address concerns regarding the take rate later but they seem overdone.




Mitra Bukalapak continues to be the main growth engine for the company, with 2Q2021 Mitra TPV increasing by +237% YoY, to IDR14.2tn.



Mitra Bukalapak’s contribution margin after S&amp;M cost improved from -1.0% of TPV in FY2020 to -0.5% of TPV in Mitra’s operating loss as a ratio to TPV improved from 1.2% in FY20 to 0.6% in 1H2021.





Bukalapak (BUKA IJ) management re-iterated its strategy to continue to help enhance the performance of its Mitra's and sellers on the platform following a more of a Shopify model than one like Amazon.com Inc (AMZN US).


Bukalapak (BUKA IJ) maintains that around 90% of its Mitra customers use only Bukalapak (BUKA IJ) given that it addresses many uses and allows them to make more money. 
Tokopedia and Shopee are much more reliant on aggressive capital to expand, which is not an effective long-term strategy for Mitra customers. It is also difficult to discount FMCG products for any length of time given that principles keep a handle on price levels.
Management also revealed that its first collaboration with Grab will focus on GrabMart, providing fresh food products for GrabMart's restaurant customers but more collaboration is expected on an incremental basis going forward. 
Bukalapak (BUKA IJ) management is expecting annual growth in TPV of +50%-75% per annum, with 2022 seen as a potentially even stronger year, with better purchasing power coming through post-pandemic and greater vaccination levels.
The company expects to break even at the EBITDA level by 2023 under current expectations. This accounts for rising revenues, growing take-rates, and lower S&amp;M costs. We continue to take a positive view on the outlook on Bukalapak (BUKA IJ) and do not see the short-term contraction in the take-rate as an issue.  Valuations look quite high relative to peers but the company is much closer to breakeven versus peers and given its predominantly 1P model, revenue is not far off the gross profit. 









Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Indofood Sukses Makmur Tbk P / Event-Driven

<div>
<p>A double-dose of StubWorld this week ...</p>
</div>
<div>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/indofood-sukses-makmur-tbk-p" target="_blank" data-smartkarma-citation="entities:1053:1" rel="noopener">Indofood Sukses Makmur Tbk P (INDF IJ)</a>'s NAV widens as 80.5%-held <a href="https://www.smartkarma.com/entities/indofood-cbp-sukses-makmur-t" target="_blank" data-smartkarma-citation="entities:17651:1" rel="noopener">Indofood CBP Sukses (ICBP IJ)</a> recently outperforms, yet INDF still remains a cheap(er) proxy into ICBP. </p>
</div>
</div>
<div>
<p>Preceding my comments on Indofood are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


A double-dose of StubWorld this week ...



Indofood Sukses Makmur Tbk P (INDF IJ)'s NAV widens as 80.5%-held Indofood CBP Sukses (ICBP IJ) recently outperforms, yet INDF still remains a cheap(er) proxy into ICBP. 



Preceding my comments on Indofood are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


Indonesia

PT Indofood CBP Sukses Makmur Tbk provides a wide range of food products. The Company is a total food solutions company with operations in all stages of food manufacturing from the production of raw materials and their processing through to consumer products on the retailer's shelf.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Indofood CBP Sukses (ICBP IJ)

Cisarua Mountain Dairy (Cimory) IPO - A Legend in Dairy

Cimory is the leader in Indonesia for yoghurt both spoonable and drinking but has been growing its exposure to UHT milk plus consumer foods in a...

Angus Mackintosh

Cisarua Mountain Dairy (Cimory) IPO: Valuation Insights

Cimory is seeking to raise up to $265 m. Bookbuilding ends on 17 Nov and shares will list on 6 Dec. Our valuation analysis suggests that we would...

Arun George

Ultrajaya Milk Industry & Trading (ULTJ IJ) - Growth in a Small Carton

Ultrajaya remains one of Indonesia's least appreciated consumer staple players, with super-strong brands and a good long term growth track record...

Angus Mackintosh

Bukalapak (BUKA IJ) - The Magic of Mitra

Bukalapak released an impressive set of 2Q2021 results, with the MSME Mitra business now close to half its TPV and showing triple-digit YoY growth....

Angus Mackintosh

StubWorld: Momentum With Indofood CBP

A 40% discount to NAV is wide for what is largely a single stock Holdco. Should ICBP continue to outperform here, I'd recommend a long/short on a...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)