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

Equity Bottom-Up

<p><strong>KBANK’s 3Q21 net profit was Bt8.63 bn (+29%YoY, -3%QoQ), in line with our expectation.</strong></p><div>• Pre-provision profit grew 13%YoY (-3%QoQ) to Bt22.9bn caused by growth in net interest income  to Bt30.7 bn (+12.8%YoY, +3.4%QoQ) supported by loan growth at 8.8%YTD  and was in line with our forecast</div><div></div><div>• Meanwhile, Non-NII dropped 2%YoY and 17%QoQ to Bt9.3bn caused by loss from portfolio investment at Bt184 m (-135%YoY,- 115%QoQ). However, Net fee income grew 9.7%YoY backed by fund management and brokerage fee.</div><div></div><div>• We expect earnings to recover from 4Q21 onwards backed by loan expansion from Corporate and SME segment after lockdown easing. Also, The bank would have the most benefit from reopening country in 2022 due to its high exposure to SME and tourism .In addition , KBANK would benefit from its digital lending platform under KBTG in expanding retail loan.</div><div></div><div><strong>We reiterate our BUY rating with a target price at Bt174, derived from 0.85x PBV’22E, implying its 3-years trading average.</strong></div>

KBANK’s 3Q21 net profit was Bt8.63 bn (+29%YoY, -3%QoQ), in line with our expectation.• Pre-provision profit grew 13%YoY (-3%QoQ) to Bt22.9bn caused by growth in net interest income  to Bt30.7 bn (+12.8%YoY, +3.4%QoQ) supported by loan growth at 8.8%YTD  and was in line with our forecast• Meanwhile, Non-NII dropped 2%YoY and 17%QoQ to Bt9.3bn caused by loss from portfolio investment at Bt184 m (-135%YoY,- 115%QoQ). However, Net fee income grew 9.7%YoY backed by fund management and brokerage fee.• We expect earnings to recover from 4Q21 onwards backed by loan expansion from Corporate and SME segment after lockdown easing. Also, The bank would have the most benefit from reopening country in 2022 due to its high exposure to SME and tourism .In addition , KBANK would benefit from its digital lending platform under KBTG in expanding retail loan.We reiterate our BUY rating with a target price at Bt174, derived from 0.85x PBV’22E, implying its 3-years trading average.

KBANK: 3Q21 Result Was the 4-Quarter Low but in Line with Our Forecast

<p><strong>We expect its 3Q21 net profit at Bt9.06bn (+36%YoY, +1.9%QoQ), driven by growth in NII and drop in provision.</strong></p><div>• Meanwhile, pre-provision profit will slightly drop 1.8%QoQ (+16%YoY) due to weak fee income from low economic activities during city lockdown.</div><div></div><div>• Earnings momentum should recover from 4Q21 onwards backed by loan expansion from Corporate and SME segment after lockdown easing.</div><div></div><div>• The bank should be a prime beneficiary for reopening country in 2022 and beyond due to its high exposure to SME and tourism related segment in its loan portfolio. Moreover, its digital lending platform under KBTG will expedite retail loan growth following recovery in economic activities.</div><div></div><div><strong>Reiterate our BUY and roll over TP by 3% to Bt174 based on target PBV’22E at 0.85x, its 3-years trading average. Our rating factor in outstanding loan growth relative to peers backed by high exposure to SME with a support by the Bank of Thailand.</strong></div>

We expect its 3Q21 net profit at Bt9.06bn (+36%YoY, +1.9%QoQ), driven by growth in NII and drop in provision.• Meanwhile, pre-provision profit will slightly drop 1.8%QoQ (+16%YoY) due to weak fee income from low economic activities during city lockdown.• Earnings momentum should recover from 4Q21 onwards backed by loan expansion from Corporate and SME segment after lockdown easing.• The bank should be a prime beneficiary for reopening country in 2022 and beyond due to its high exposure to SME and tourism related segment in its loan portfolio. Moreover, its digital lending platform under KBTG will expedite retail loan growth following recovery in economic activities.Reiterate our BUY and roll over TP by 3% to Bt174 based on target PBV’22E at 0.85x, its 3-years trading average. Our rating factor in outstanding loan growth relative to peers backed by high exposure to SME with a support by the Bank of Thailand.

KBANK: Expect 3Q21 Earning to Grow YoY and QoQ

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

Cross Asset Strategy

<div class="content-highlight">
<p>The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.</p>
</div><h3>Macro Insights</h3><p>In<a href="https://www.smartkarma.com/insights/singapore-taking-the-pulse-of-the-labour-market-recovery" target="_blank" rel="noopener"> Singapore: Taking the Pulse of the Labour Market Recovery</a>, economist<a href="https://www.smartkarma.com/profiles/nigel-chiang" target="_blank" rel="noopener"> Nigel Chiang</a> discusses Singapore's labour market that has recovered slowly in 2Q21 and its economic outlook. </p><p>In<a href="https://www.smartkarma.com/insights/covid-19-too-much-pessimism-over-southeast-asia" target="_blank" rel="noopener"> Covid-19: Too Much Pessimism Over Southeast Asia</a>,<a href="https://www.smartkarma.com/profiles/nicholas-chia" target="_blank" rel="noopener"> Nicholas Chia</a> discusses Southeast Asia's poor pandemic management and a slow vaccine rollout has raised pessimism over the region’s prospects but sees more optimism ahead.</p><h3>Equity Bottom Up</h3><p>In<a href="https://www.smartkarma.com/insights/bank-negara-indonesia-bbni-ij-revealing-a-new-digital-skin" target="_blank" rel="noopener"> Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin</a>,<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> takes a closer look at<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ)</a> after<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ)</a> revealed some interesting views on its strategy for expansion in a recent webinar. <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener"></a></p><p>In<a href="https://www.smartkarma.com/insights/erajaya-swasembada-eraa-ij-better-reception-ahead" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ) - Better Reception Ahead</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> circles back to<a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ)</a> after an interaction with management. </p><p>In<a href="https://www.smartkarma.com/insights/erajaya-eraa-beneficiary-of-whatsapp-and-google-update" target="_blank" rel="noopener"> Erajaya (ERAA): Beneficiary of WhatsApp and Google Update</a>,<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> revisits<a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ)</a> after it registered strong growth, partly driven by Google and WhatsApp security updates that require new smartphones. </p><p>In<a href="https://www.smartkarma.com/insights/bukalapak-buka-ij-fast-entry-to-idx30-lq45-idx80-msci-on-track-for-november" target="_blank" rel="noopener"> Bukalapak (BUKA IJ): Fast Entry to IDX30, LQ45, IDX80; MSCI on Track for November</a>,<a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" rel="noopener"> Brian Freitas</a> discusses<a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" rel="noopener"> Bukalapak (BUKA IJ)</a>'s entry to IDX30, LQ45, IDX80, JII and JII70 Indexes. This follows a recently proposed change to the indices to allow for Fast Entry inclusions. </p><p>In<a href="https://www.smartkarma.com/insights/scb-scbx-will-unlock-potential-growth-in-the-long-term" target="_blank" rel="noopener"> SCB: SCBX Will Unlock Potential Growth in the Long-Term</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> circles back to<a href="https://www.smartkarma.com/entities/siam-commercial-bank-pub-co" target="_blank" rel="noopener"> Siam Commercial Bank Pub Co (SCB TB)</a> post the analyst meeting showed that the management plan to set up SCBX, a newly established holding company in place of SCB.</p>


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.
Macro InsightsIn Singapore: Taking the Pulse of the Labour Market Recovery, economist Nigel Chiang discusses Singapore's labour market that has recovered slowly in 2Q21 and its economic outlook. In Covid-19: Too Much Pessimism Over Southeast Asia, Nicholas Chia discusses Southeast Asia's poor pandemic management and a slow vaccine rollout has raised pessimism over the region’s prospects but sees more optimism ahead.Equity Bottom UpIn Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin, Angus Mackintosh takes a closer look at Bank Negara Indonesia Persero (BBNI IJ) after Bank Negara Indonesia Persero (BBNI IJ) revealed some interesting views on its strategy for expansion in a recent webinar. In Erajaya Swasembada (ERAA IJ) - Better Reception Ahead, CrossASEAN insight provider Angus Mackintosh circles back to Erajaya Swasembada (ERAA IJ) after an interaction with management. In Erajaya (ERAA): Beneficiary of WhatsApp and Google Update, Henry Soediarko revisits Erajaya Swasembada (ERAA IJ) after it registered strong growth, partly driven by Google and WhatsApp security updates that require new smartphones. In Bukalapak (BUKA IJ): Fast Entry to IDX30, LQ45, IDX80; MSCI on Track for November, Brian Freitas discusses Bukalapak (BUKA IJ)'s entry to IDX30, LQ45, IDX80, JII and JII70 Indexes. This follows a recently proposed change to the indices to allow for Fast Entry inclusions. In SCB: SCBX Will Unlock Potential Growth in the Long-Term, Country Group circles back to Siam Commercial Bank Pub Co (SCB TB) post the analyst meeting showed that the management plan to set up SCBX, a newly established holding company in place of SCB.

The Week That Was in ASEAN@Smartkarma - BNI More Digital, Erajaya on Fire, and Siam Commercial Bank

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<div>
<p>In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.  Highlights:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>The big four of China &amp; HK, Taiwan, South Korea and India dominate holdings in Asia Ex-Japan.  The 4 countries combined account for 85.4% of total allocations, though all but India are held underweight versus the MSCI Asia Ex-Japan index.</li>
<li>China &amp; HK's weight in Asia Ex-Japan funds stands at a 4-year low of 42.96% having fallen heavily from the high of 52% back in August 2020.</li>
<li>Allocations in Indian stocks hit a new all-time high last month of 13.54%.  India has been the go-to overweight holding since the election of Narendra Modi in 2014, though managers are much more closely aligned to benchmark today.</li>
<li>
<p>Indonesian allocations are close to their lowest levels on record.  Only 82.8% of the Asia Ex-Japan managers in our analysis have exposure to Indonesia,  with Comgest, Barings and Vontobel closing exposure over the last 6-months.</p>
</li>
<li>Information Technology dominates the holdings picture, being both the largest sector holding and the largest sector overweight by some distance.  Opposing this are net underweights in Health Care (-1.61%), Materials (-1.25%) and Financials (-1.17%). </li>
<li>The key antagonist in China's tech crackdown, Consumer Discretionary weights have fallen from a high of 21.35% in October 2020 to 16.84% today.  In tandem, active managers have moved from an overweight of 2.18% to an underweight of -0.12%.  Confidence has certainly taken a knock.</li>
</ul>
<p>Also analyzed in more detail:  Thailand, Health Care, Indian Financials, South Korean Consumer Staples, China Financials, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> , <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> , <a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US).</a></p>
<p><em>Analysis taken from our Asia Ex-Japan research, covering 96 active Asia Ex-Japan funds with combined AUM of $80bn. </em></p>
</div>


In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.  Highlights:



The big four of China &amp; HK, Taiwan, South Korea and India dominate holdings in Asia Ex-Japan.  The 4 countries combined account for 85.4% of total allocations, though all but India are held underweight versus the MSCI Asia Ex-Japan index.
China &amp; HK's weight in Asia Ex-Japan funds stands at a 4-year low of 42.96% having fallen heavily from the high of 52% back in August 2020.
Allocations in Indian stocks hit a new all-time high last month of 13.54%.  India has been the go-to overweight holding since the election of Narendra Modi in 2014, though managers are much more closely aligned to benchmark today.

Indonesian allocations are close to their lowest levels on record.  Only 82.8% of the Asia Ex-Japan managers in our analysis have exposure to Indonesia,  with Comgest, Barings and Vontobel closing exposure over the last 6-months.

Information Technology dominates the holdings picture, being both the largest sector holding and the largest sector overweight by some distance.  Opposing this are net underweights in Health Care (-1.61%), Materials (-1.25%) and Financials (-1.17%). 
The key antagonist in China's tech crackdown, Consumer Discretionary weights have fallen from a high of 21.35% in October 2020 to 16.84% today.  In tandem, active managers have moved from an overweight of 2.18% to an underweight of -0.12%.  Confidence has certainly taken a knock.

Also analyzed in more detail:  Thailand, Health Care, Indian Financials, South Korean Consumer Staples, China Financials, Baidu (BIDU US) , Sea Ltd (SE US) , Midea Group Co Ltd A (000333 CH) and JD.com Inc (ADR) (JD US).
Analysis taken from our Asia Ex-Japan research, covering 96 active Asia Ex-Japan funds with combined AUM of $80bn. 


Asia Ex-Japan Positioning:  India & Tech at Record Highs

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p><em>There is a BIG trade coming up starting next Monday. If you have exposure in Indonesia, it is worth thinking about. </em></p><hr><p>Back in January 2021, Bloomberg reported that <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> - the country's largest lender by assets - was <em>"exploring a plan to raise at least US$1bn through a rights issue."</em></p><p>Almost a year ago in October 2020 BBRI signed a conditional deal to merge their Shariah-compliant unit with those of <a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri Persero (BMRI IJ)</a> and <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> and there had been talks (since Feb 2020?) with the government for BBRI to take over state-owned pawnshop lender PT Pegadaian and financing firm PT Permodalan Nasional Madani to provide affordable loans to SMEs. A deal for BBRI to take over those two firms was <a href="https://www.reuters.com/article/bank-bri-ma-idUSL4N2KE2J5" target="_blank" rel="noopener">decided</a> in early February, and the need for a rights issue was set, though this required parliamentary approval and BBRI needed shareholder approval for the rights issue - which it announced in June and <a href="https://www.thejakartapost.com/adv/2021/07/23/bri-egms-approves-rights-issue-of-28-billion-shares.html" target="_blank" rel="noopener">received</a> in July - under the mechanism of <em>Capital Increase by Granting Securities Subscription Rights First</em> (PMHMETD). <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> discussed the bank's initiatives and aspirations in the micro lending space in <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-bbri-ij-both-micro-and-digital" target="_blank" data-smartkarma-citation="insights:48613" rel="noopener">Bank Rakyat Indonesia (BBRI IJ) - Both Micro and Digital</a> in February followed by a discussion of the rights issue itself in early July in <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-bbri-ij-ultra-micro-and-digital-aspirations-in-place" target="_blank" data-smartkarma-citation="insights:54111" rel="noopener">Bank Rakyat Indonesia (BBRI IJ) - Ultra-Micro and Digital Aspirations in Place</a>. Angus made a strong case for the bank in both insights and they are worth a read. </p><p>The shares have basically had an overhang in place since early this year but in June when it became clear the rights issue would be Very Large, that overhang became more pronounced. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/528/original/Screenshot+2021-09-08+at+2.18.15+PM.png?1631081912" class="editor-image img-responsive" data-smartkarma-image-id="228528"></figure><p></p></section><p>The presentation made to get this past shareholders (never really in doubt as the govt owns 57%) announced the development of an "Ultra-Micro segment" to create an <em>Ultra-Micro Ecosystem</em> as the foundation for further growth, structured under <strong>Ultra Micro Holding</strong> owned by BRI, in the form of previous precedents of SOE development platforms such as Biofarma/<a href="https://www.smartkarma.com/entities/indofarma-tbk-pt" target="_blank" data-smartkarma-citation="entities:5319:1" rel="noopener">Indofarma (INAF IJ)</a> and Inalum's investment in Indonesian mining companies. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/527/original/Screenshot+2021-09-08+at+2.02.45+PM.png?1631080980" class="editor-image img-responsive" data-smartkarma-image-id="228527"></figure></section><p>The way this would be done is a rights offering to offer 230,128,553 rights for every 1,000,000,000 Existing Shares (roughly 0.23013 for 1), with the government contributing its ownership of Pegadaian and PNM in kind to fulfil its rights exercise consideration payment.</p><p>That means the ~0.23 to 1 Rights Offering would be in effect for the other 43% of holders, which is a vast array of local and international institutions and local retail shareholders, with an Exercise Price of IDR 3400/share, and assuming 100% participation, that would garner IDR 41.15trln in proceeds, which, according to the roadshow <a href="https://www.ir-bri.com/misc/PS/2021/RI-Deal-Roadshow-Presentation-Final.pdf" target="_blank" rel="noopener">presentation</a> released in early September, <em>"will be used for working capital for BRI in order to develop an ultra-micro ecosystem as well as micro and small businesses."</em></p><p>The shares traded on the regular market went ex-rights today. Rights will be distributed on 10 September, traded from 13-22 September and exercised in the same period, with the last day for Excess Rights Subscription the 24 September and allotment of Excess Rights on 27 September.</p><p>There is considerable opportunity here. Some short-term, some longer-term. But it is considerable because there is a fair bit of potential overhang here.</p><p>I consider the opportunity set below the fold. </p>

There is a BIG trade coming up starting next Monday. If you have exposure in Indonesia, it is worth thinking about. Back in January 2021, Bloomberg reported that Bank Rakyat Indonesia Persero (BBRI IJ) - the country's largest lender by assets - was "exploring a plan to raise at least US$1bn through a rights issue."Almost a year ago in October 2020 BBRI signed a conditional deal to merge their Shariah-compliant unit with those of Bank Mandiri Persero (BMRI IJ) and Bank Negara Indonesia Persero (BBNI IJ) and there had been talks (since Feb 2020?) with the government for BBRI to take over state-owned pawnshop lender PT Pegadaian and financing firm PT Permodalan Nasional Madani to provide affordable loans to SMEs. A deal for BBRI to take over those two firms was decided in early February, and the need for a rights issue was set, though this required parliamentary approval and BBRI needed shareholder approval for the rights issue - which it announced in June and received in July - under the mechanism of Capital Increase by Granting Securities Subscription Rights First (PMHMETD). Angus Mackintosh discussed the bank's initiatives and aspirations in the micro lending space in Bank Rakyat Indonesia (BBRI IJ) - Both Micro and Digital in February followed by a discussion of the rights issue itself in early July in Bank Rakyat Indonesia (BBRI IJ) - Ultra-Micro and Digital Aspirations in Place. Angus made a strong case for the bank in both insights and they are worth a read. The shares have basically had an overhang in place since early this year but in June when it became clear the rights issue would be Very Large, that overhang became more pronounced. The presentation made to get this past shareholders (never really in doubt as the govt owns 57%) announced the development of an "Ultra-Micro segment" to create an Ultra-Micro Ecosystem as the foundation for further growth, structured under Ultra Micro Holding owned by BRI, in the form of previous precedents of SOE development platforms such as Biofarma/Indofarma (INAF IJ) and Inalum's investment in Indonesian mining companies. The way this would be done is a rights offering to offer 230,128,553 rights for every 1,000,000,000 Existing Shares (roughly 0.23013 for 1), with the government contributing its ownership of Pegadaian and PNM in kind to fulfil its rights exercise consideration payment.That means the ~0.23 to 1 Rights Offering would be in effect for the other 43% of holders, which is a vast array of local and international institutions and local retail shareholders, with an Exercise Price of IDR 3400/share, and assuming 100% participation, that would garner IDR 41.15trln in proceeds, which, according to the roadshow presentation released in early September, "will be used for working capital for BRI in order to develop an ultra-micro ecosystem as well as micro and small businesses."The shares traded on the regular market went ex-rights today. Rights will be distributed on 10 September, traded from 13-22 September and exercised in the same period, with the last day for Excess Rights Subscription the 24 September and allotment of Excess Rights on 27 September.There is considerable opportunity here. Some short-term, some longer-term. But it is considerable because there is a fair bit of potential overhang here.I consider the opportunity set below the fold. 

Bank Rakyat Indonesia (BBRI)'s Mega Rights Issue - Plenty of Opportunity Short-Term and Long-Term

Thailand

Kasikornbank Public Company Limited provides commercial banking services including personal and commercial banking, international trade, as well as investment banking services, to its customers throughout Thailand.  The Bank has foreign branches in Los Angeles, Hong Kong, Cayman Islands, and Shenzhen; and representative offices in Shanghai, Beijing, and Kunmin.

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Kasikornbank (KBANK/F TB)

KBANK: 3Q21 Result Was the 4-Quarter Low but in Line with Our Forecast

KBANK’s 3Q21 net profit was Bt8.63 bn (+29%YoY, -3%QoQ), in line with our expectation. We reiterate our BUY rating with a target price at Bt174,...

Pi Securities PCL, Thailand

KBANK: Expect 3Q21 Earning to Grow YoY and QoQ

We expect its 3Q21 net profit at Bt9.06bn (+36%YoY, +1.9%QoQ), driven by growth in NII and drop in provision. Reiterate our BUY and roll over TP by...

Pi Securities PCL, Thailand

The Week That Was in ASEAN@Smartkarma - BNI More Digital, Erajaya on Fire, and Siam Commercial Bank

The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South...

Angus Mackintosh

Asia Ex-Japan Positioning: India & Tech at Record Highs

In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.

Steven Holden

Bank Rakyat Indonesia (BBRI)'s Mega Rights Issue - Plenty of Opportunity Short-Term and Long-Term

Bank Rakyat (BBRI) Indonesia's largest bank by assets, has a rights issue (stock went ex-rights today). The bank hopes to raise $2.8bn from its...

Travis Lundy

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