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

<a href="https://www.smartkarma.com/entities/hanon-systems" target="_blank" data-smartkarma-citation="entities:11506:1" rel="noopener">Hanon Systems (018880 KS)</a> share price has come off by 25% since last year's May and has not participated in the recovery like the other Korean stocks as the country has recently come out of the COVID-19 crisis. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/136/015/original/image_82251703021590504812385.png?1590504812" class="editor-image img-responsive" data-smartkarma-image-id="136015"></figure>
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source: Capital IQ
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In this insight, we will discuss why investors should not rush to buy Hanon System's share despite the relative underperformance against the index. The strong auto sales recovery in China and South Korea will be helpful for the company but not enough to cover the weakness coming out of Europe and the Americas. 
<a href="https://www.smartkarma.com/entities/mando-corp" target="_blank" data-smartkarma-citation="entities:8119:1" rel="noopener">Mando Corp (204320 KS)</a> operates in the same segment as an auto supplier in South Korea with a geographically diversified presence although with a higher concentration in South Korea and China where the road to recovery is much more visible compared to Europe and the Americas and it is currently trading at 20% discount to book value.

Hanon Systems (018880 KS) share price has come off by 25% since last year's May and has not participated in the recovery like the other Korean stocks as the country has recently come out of the COVID-19 crisis. 


source: Capital IQ

In this insight, we will discuss why investors should not rush to buy Hanon System's share despite the relative underperformance against the index. The strong auto sales recovery in China and South Korea will be helpful for the company but not enough to cover the weakness coming out of Europe and the Americas. 
Mando Corp (204320 KS) operates in the same segment as an auto supplier in South Korea with a geographically diversified presence although with a higher concentration in South Korea and China where the road to recovery is much more visible compared to Europe and the Americas and it is currently trading at 20% discount to book value.

Hanon Systems: Still Tough and Prefer Mando

The recent negative sales in the Chinese auto industry and Nissan's case of Carlos Ghosn removal could put additional pressure on the already thin margin of auto supplier industry. One of the Carlos Ghosn early contribution to Nissan was to cut cost and outsource the auto parts maker to a wide variety of suppliers including to <a href="https://www.smartkarma.com/entities/11506" target="_blank" data-smartkarma-citation="entities:11506:1">Hanon Systems (018880 KS)</a> . Nissan's new management may want to undo some of Carlos Ghosn' legacy including changing the selection criteria of parts supplier.Hanon's global peers also experienced a decrease in the inventory turnover and most of them have been priced at PER &lt;10 but Hanon is still trading at 24x PER while its sales growth and profitability is still in low single digit? Facing the onset of the slowdown in the Chinese auto industry, won't it be another headwind for Hanon Systems?

The recent negative sales in the Chinese auto industry and Nissan's case of Carlos Ghosn removal could put additional pressure on the already thin margin of auto supplier industry. One of the Carlos Ghosn early contribution to Nissan was to cut cost and outsource the auto parts maker to a wide variety of suppliers including to Hanon Systems (018880 KS) . Nissan's new management may want to undo some of Carlos Ghosn' legacy including changing the selection criteria of parts supplier.Hanon's global peers also experienced a decrease in the inventory turnover and most of them have been priced at PER &lt;10 but Hanon is still trading at 24x PER while its sales growth and profitability is still in low single digit? Facing the onset of the slowdown in the Chinese auto industry, won't it be another headwind for Hanon Systems?

Hanon Systems (018880): Overvalued Stocks in The Low Margin Sector

Japan

KASAI KOGYO CO., LTD. manufactures automobile interior equipment.  The Company produces sun visors, head linings, door trims, trunk trims, and Dash insulators for soundproofing.  Kasai Kogyo has its subsidiaries in the US, Mexico, the UK, and China.

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Kasai Kogyo (7256 JP)

Hanon Systems: Still Tough and Prefer Mando

Hanon Systems (018880 KS) share price has come off by 25% since last year's May and has not participated in the recovery like the other Korean...

Henry Soediarko

Hanon Systems (018880): Overvalued Stocks in The Low Margin Sector

The recent negative sales in the Chinese auto industry and Nissan's case of Carlos Ghosn removal could put additional pressure on the already thin...

Henry Soediarko

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