Asia Consumer Research, Investory

Devi Subhakesan

Asia Consumer Research

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Thematic (Sector/Industry)

In this Smartkarma Original Series report, we scan the Asia Direct-to-Consumer (D2C) channel space for Consumer Packaged Goods to identify the verticals that have gained wider consumer acceptance and witnessed steady growth in each of the key geographies - China, South East Asia, and India. We look into the factors that enabled notable D2C brands in the Beauty, Fashion, and Food verticals to make steady inroads and disrupt the sector within a short period. We discuss the D2C ecosystem, brand journey and key challenges. 2020 has been the year that fast-tracked online retail penetration in most parts of Asia. In this context, we profile D2C brands with either a dominant segment presence or unique business model to gain a deeper understanding of the Asia D2C landscape.
What is original about this report? Insights and takeaways for Investors in Asia D2C branded players in consumer space based on our comparative study of the segment across three key geographies - China, SE Asia, and India. China's early march in digital transformation and D2C market space offers valuable lessons to players/investors in early-stage digital markets like India which is witnessing aggressive traction in this space. Insights discussed in the report have mostly been weaned from the startup experiences shared by founders of reputed D2C brands. The report also analyses investment outlook for select digitally native D2C brands with lead segment presence and/or unique business models.

 In this Smartkarma Original Series report, we scan the Asia Direct-to-Consumer (D2C) channel space for Consumer Packaged Goods to identify the verticals that have gained wider consumer acceptance and witnessed steady growth in each of the key geographies - China, South East Asia, and India. We look into the factors that enabled notable D2C brands in the Beauty, Fashion, and Food verticals to make steady inroads and disrupt the sector within a short period. We discuss the D2C ecosystem, brand journey and key challenges. 2020 has been the year that fast-tracked online retail penetration in most parts of Asia. In this context, we profile D2C brands with either a dominant segment presence or unique business model to gain a deeper understanding of the Asia D2C landscape.
What is original about this report? Insights and takeaways for Investors in Asia D2C branded players in consumer space based on our comparative study of the segment across three key geographies - China, SE Asia, and India. China's early march in digital transformation and D2C market space offers valuable lessons to players/investors in early-stage digital markets like India which is witnessing aggressive traction in this space. Insights discussed in the report have mostly been weaned from the startup experiences shared by founders of reputed D2C brands. The report also analyses investment outlook for select digitally native D2C brands with lead segment presence and/or unique business models.

D2C Brands in Asia: Disruption Potential in Consumer Space

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 Capital Markets

Axelum Resources / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/axelum-resources" target="_blank" data-smartkarma-citation="entities:28282:1" rel="noopener">Axelum Resources (1729371D PM)</a> is a leading coconut product manufacturer. Axelum aims to raise up to PHP7.7 billion ($147 million) through a primary (400 million treasury shares and 300 million new shares) and secondary (430 million shares) offering. The offer price is PHP6.81 per share with offer period commencing on 23 September.<div class="content-highlight">Overall, we believe that Axelum’s fundamentals offers more positives than negatives and could prove to be attractive at the right valuation. We will provide a view on the valuation in the next note.</div>

Axelum Resources (1729371D PM) is a leading coconut product manufacturer. Axelum aims to raise up to PHP7.7 billion ($147 million) through a primary (400 million treasury shares and 300 million new shares) and secondary (430 million shares) offering. The offer price is PHP6.81 per share with offer period commencing on 23 September.Overall, we believe that Axelum’s fundamentals offers more positives than negatives and could prove to be attractive at the right valuation. We will provide a view on the valuation in the next note.

Axelum Resources IPO Initiation: Making a Meal of It

Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Equity Bottom-Up

INVESTMENT VIEW:  Management sounded confident that they could list its China operations at ~20x PER and unlock value in <a href="https://www.smartkarma.com/entities/172" target="_blank" data-smartkarma-citation="entities:172:1">Wilmar International (WIL SP)</a> shares by 1) paying a special dividend from the listing proceeds, and 2) investors using the SOTP valuation to see deep value in the ex-China portion of the business.  However, our review of Wilmar-China’s listed A-share peers highlights significant vulnerability in management’s key assumption on its potential listing multiple.  We recommend investors take profits from the recent rally in the shares and expect them to trade back towards the lower end of its recent trading range.

INVESTMENT VIEW:  Management sounded confident that they could list its China operations at ~20x PER and unlock value in Wilmar International (WIL SP) shares by 1) paying a special dividend from the listing proceeds, and 2) investors using the SOTP valuation to see deep value in the ex-China portion of the business.  However, our review of Wilmar-China’s listed A-share peers highlights significant vulnerability in management’s key assumption on its potential listing multiple.  We recommend investors take profits from the recent rally in the shares and expect them to trade back towards the lower end of its recent trading range. 

Wilmar: China Listing at ~20x Might Prove Too Optimistic.

<div class="content-highlight">
Highlights of this week's consumption diary:
Entry and an Exit. IKEA's recent entry into India and its massive investment plans could transform India's home improvement sector. GSK is exiting its consumer healthcare business and suitors have queued up for Horlicks, the iconic malt-based drink.
Weekly update of actionable Insights published on SmartKarma in the Asia consumption sector:
Two high conviction BUYs from SmartKarma: well-known piano maker from Japan <a href="https://www.smartkarma.com/entities/17841" target="_blank" data-smartkarma-citation="entities:17841:1">Yamaha Corp (7951 JP)</a> and fast growth tech product retailer from Thailand, <a href="https://www.smartkarma.com/entities/27411" target="_blank" data-smartkarma-citation="entities:27411:1">Com7 PCL (COM7 TB)</a> 
</div>
Asia's Consumer discretionary, staples and services sector offers attractive investment opportunities with long-term growth potential. However, disruptive technology, rising internet penetration, changing millennial preferences, shifting demographic patterns, increasing female education levels/labor participation rates are influencing industry trends and impacting traditional players while opening opportunities for new. Watch out for our Consumption Diary to give you a heads up on events and insights in this space.


Highlights of this week's consumption diary:
Entry and an Exit. IKEA's recent entry into India and its massive investment plans could transform India's home improvement sector. GSK is exiting its consumer healthcare business and suitors have queued up for Horlicks, the iconic malt-based drink.
Weekly update of actionable Insights published on SmartKarma in the Asia consumption sector:
Two high conviction BUYs from SmartKarma: well-known piano maker from Japan Yamaha Corp (7951 JP) and fast growth tech product retailer from Thailand, Com7 PCL (COM7 TB) 

Asia's Consumer discretionary, staples and services sector offers attractive investment opportunities with long-term growth potential. However, disruptive technology, rising internet penetration, changing millennial preferences, shifting demographic patterns, increasing female education levels/labor participation rates are influencing industry trends and impacting traditional players while opening opportunities for new. Watch out for our Consumption Diary to give you a heads up on events and insights in this space.

Consumption Diary: As IKEA Storms India, GSK Wants a Way Out; Actionable Insights from Smartkarma

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Key Points:<ul>
<li>The Staples Sector is leadership and many names are staging price and RS reversals.</li>
<li>REIT’s are breaking above bases and are showing RS leadership.</li>
<li>Paper &amp; Forest products are strengthening and many are reversing price and RS downtrend or breaking above bases.</li>
<li>Large-Cap Pharma stocks are showing leadership. Many have broken topside of multi-year consolidations or have reversed multi-year price and RS downtrends.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/059/921/original/Untitled.png?1533586859" class="editor-image img-responsive" data-smartkarma-image-id="59921"></figure>

Key Points:
The Staples Sector is leadership and many names are staging price and RS reversals.
REIT’s are breaking above bases and are showing RS leadership.
Paper &amp; Forest products are strengthening and many are reversing price and RS downtrend or breaking above bases.
Large-Cap Pharma stocks are showing leadership. Many have broken topside of multi-year consolidations or have reversed multi-year price and RS downtrends.


United States

Kellogg Company manufactures and markets ready-to-eat cereal and other convenience foods. The Company's products include cereals, cookies, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles and veggie foods. Kellogg markets its products in the United States, Canada, and other countries throughout the world.

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Kellogg Co (K US)

D2C Brands in Asia: Disruption Potential in Consumer Space

Insights for investors based on comparative study of Asia D2C landscape across India, SE Asia & China.Analysis of relative segment attractiveness....

Devi Subhakesan

Axelum Resources IPO Initiation: Making a Meal of It

Axelum Resources (1729371D PM) is a leading coconut product manufacturer. Axelum aims to raise up to PHP7.7 billion ($147 million) through a...

Arun George

Wilmar: China Listing at ~20x Might Prove Too Optimistic.

INVESTMENT VIEW: Management sounded confident that they could list its China operations at ~20x PER and unlock value in Wilmar International (WIL...

Charles Spencer

Consumption Diary: As IKEA Storms India, GSK Wants a Way Out; Actionable Insights from Smartkarma

Highlights of this week's consumption diary: Entry and an Exit. IKEA's recent entry into India and its massive investment plans could transform...

Devi Subhakesan

U.S. Vital Signs: Actionable Stocks

Key Points: The Staples Sector is leadership and many names are staging price and RS reversals. REIT’s are breaking above bases and are showing RS...

Vermilion Research

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