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>Let's get Digital</h3><p>The Monetary Authority of Singapore (MAS) announced last week that it will award a full digital bank license to <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> and to a consortium including <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> and <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> in a move to liberalize the local banking industry. Like traditional banks, these players will provide retail customers with services such as opening accounts, deposits, as well as issuing debit and credit cards, The difference being that digital banks will not have a physical presence and all banking services will be done online. More below the fold...</p><h3>Equity Bottom Up</h3><p>In<a href="https://www.smartkarma.com/insights/bank-negara-indonesia-persero-bbni-ij-still-more-pain-to-come" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ) - Still More Pain to Come</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> revisits <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> after a call with management revealing some continuing risks on the horizon.</p><p>In<a href="https://www.smartkarma.com/insights/gojek-and-grab-merger-wishful-thinking" target="_blank" rel="noopener"> Gojek and Grab Merger Wishful Thinking?</a>,<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> zeros in on the resurgence of rumors of a merger between<a href="https://www.smartkarma.com/entities/gojek" target="_blank" rel="noopener"> Gojek (1379371D IJ)</a> and<a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" rel="noopener"> Grab (0967655D SP)</a>, which looks like wishful thinking from a Grab perspective, and indeed from Softbank's major shareholder. </p><p>In<a href="https://www.smartkarma.com/insights/prodia-widyahusada-prda-ij-testing-times-a-positive" target="_blank" rel="noopener"> Prodia Widyahusada (PRDA IJ) - Testing Times a Positive</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> returns to look at Indonesian diagnostics leader <a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" rel="noopener">Prodia Widyahusada (PRDA IJ),</a> after its positive 3Q2020 results.</p><p>In <a href="https://www.smartkarma.com/insights/thai-corona-crisis-december-the-looming-shadow-of-myanmar" target="_blank" rel="noopener">Thai Corona Crisis (December): The Looming Shadow of Myanmar</a>,  Thai guru<a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" rel="noopener"> Athaporn Arayasantiparb, CFA</a> revisits the pandemic situation in Thailand after a number of infected Burmese workers illegally crossed into Thailand without proper health checks. </p><p>In<a href="https://www.smartkarma.com/insights/bank-danamon-profit-transformation-not-recognized" target="_blank" rel="noopener"> Bank Danamon – Profit Transformation Not Recognized</a>, banking specialist<a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" rel="noopener"> Daniel Tabbush</a> reports back on<a href="https://www.smartkarma.com/entities/bank-danamon-indonesia-tbk-pt" target="_blank" rel="noopener"> Bank Danamon Indonesia (BDMN IJ)</a>'s Q32020 results. He sees that BDMN having the potential to see a significant rebound in ROA. </p><p>In<a href="https://www.smartkarma.com/insights/silicon-stories-n-humanica-and-rs-tout-their-online-credentials" target="_blank" rel="noopener"> Silicon Stories N: Humanica and RS Tout Their Online Credentials</a>, Thai guru<a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" rel="noopener"> Athaporn Arayasantiparb, CFA</a> reports back after visiting two companies that clearly benefit from the remote economy popularized by the pandemic including <a href="https://www.smartkarma.com/entities/humanica-pcl" target="_blank" data-smartkarma-citation="entities:26151:1" rel="noopener">Humanica PCL (HUMAN TB)</a> and <a href="https://www.smartkarma.com/entities/rs-pcl" target="_blank" data-smartkarma-citation="entities:18114:1" rel="noopener">RS PCL (RS TB)</a>.</p><p>In Malaysia<a href="https://www.smartkarma.com/insights/cimb-group-reserve-cover-light-still" target="_blank" rel="noopener"> CIMB Group – Reserve Cover Light Still</a>, banking specialist<a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" rel="noopener"> Thomas J. Monaco</a> discusses 3Q2020  results from <a href="https://www.smartkarma.com/entities/cimb-group-holdings-bhd" target="_blank" rel="noopener">CIMB Group Holdings (CIMB MK)</a> and highlights two important trends.</p><p>In<a href="https://www.smartkarma.com/insights/kerry-express-ipo-valuation-insights" target="_blank" rel="noopener"> Kerry Express IPO: Valuation Insights</a>, IPO specialist<a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" rel="noopener"> Arun George</a> returns to look at<a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" rel="noopener"> Kerry Express Thailand (KEX TB)</a> valuations after providing a view on the company's 3Q20 results. Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener"></a></p><div>
<p>In<a href="https://www.smartkarma.com/insights/tfg-solid-outlook-though-it-should-retreat-from-3q20-peak" target="_blank" rel="noopener"> TFG: Solid Outlook, Though It Should Retreat from 3Q20 Peak</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> report back after the<a href="https://www.smartkarma.com/entities/thai-foods-group-public-company-limited" target="_blank" rel="noopener"> Thai Foods Group Public Company (TFG TB)</a> analyst meeting. </p>
<p>In<a href="https://www.smartkarma.com/insights/pttep-target-to-achieve-6-cagr-sales-growth-in-2021-25" target="_blank" rel="noopener"> PTTEP: Target to Achieve 6% CAGR Sales Growth in 2021-25</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> revisits <a href="https://www.smartkarma.com/entities/ptt-exploration-and-production-public-company-limited" target="_blank" rel="noopener"> PTT E&amp;P (PTTEP TB)</a>, which is targeting petroleum sales growth at 6% CAGR in next 5 years. The company rolled out its 5-year investment plan allocating US$23.6bn towards long-term growth.</p>
<p>In <a href="https://www.smartkarma.com/insights/gunkul-power-business-to-drive-2021-earnings" target="_blank" data-smartkarma-citation="insights:45996" rel="noopener">GUNKUL: Power Business to Drive 2021 Earnings</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> returns to look at <a href="https://www.smartkarma.com/entities/gunkul-engineering-pcl" target="_blank" data-smartkarma-citation="entities:15272:1" rel="noopener">Gunkul Engineering (GUNKUL TB)</a> post its analyst briefing. </p>
<p>In<a href="https://www.smartkarma.com/insights/ace-better-gross-margin-but-we-stay-on-hold" target="_blank" rel="noopener"> ACE: Better Gross Margin but We Stay on HOLD</a>, <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> maintains a "HOLD" son <a href="https://www.smartkarma.com/entities/absolute-clean-energy-pcl" target="_blank" data-smartkarma-citation="entities:29155:1" rel="noopener">Absolute Clean Energy PCL (ACE TB)</a>. He thinks ACE deserves to trade at a premium to Thai Utilities due to its pronounced growth prospects and targets a 2021E PE of 23.2x. </p>
<p>In<a href="https://www.smartkarma.com/insights/teamg-value-play-in-consulting-to-benefit-from-government-stimulus" target="_blank" rel="noopener"> TEAMG: Value Play in Consulting to Benefit from Government Stimulus,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> maintains a BUY recommendation on <a href="https://www.smartkarma.com/entities/team-consulting-engineering-and-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:29175:1" rel="noopener">TEAM Consulting Engineering and Management (TEAMG TB)</a> with an unchanged target price of Bt2.81, implying an upside of 29% from the current share price.</p>
</div><h3>Credit Insights</h3><p>In<a href="https://www.smartkarma.com/insights/abm-investama-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" rel="noopener"> ABM Investama - Earnings Flash - 9M FY 2020 Results - Lucror Analytics</a>, credit specialist<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> provides a bird's eye view on<a href="https://www.smartkarma.com/entities/abm-investama-tbk-pt" target="_blank" rel="noopener"> ABM Investama (ABMM IJ)</a>. </p><p>In<a href="https://www.smartkarma.com/insights/morning-views-asia-pan-brothers-soechi-lines" target="_blank" rel="noopener"> Morning Views Asia: Pan Brothers, Soechi Lines</a>, our friends<a href="https://www.smartkarma.com/companies/lucror-analytics" target="_blank" rel="noopener"> Lucror Analytics</a> zero in on<a href="https://www.smartkarma.com/entities/pan-brothers-tbk-pt" target="_blank" rel="noopener"> Pan Brothers (PBRX IJ)</a>'s plan issue up to USD 350 mn of 5-Year Notes.  </p><p>In<a href="https://www.smartkarma.com/insights/morning-views-asia-agung-podomoro-land-guangzhou-r-f-properties-indika-energy-jingrui-holdings" target="_blank" rel="noopener"> Morning Views Asia: Agung Podomoro Land, Guangzhou R&amp;F Properties, Indika Energy, Jingrui Holdings</a>, credit specialist<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> provides an initial view on<a href="https://www.smartkarma.com/entities/agung-podomoro-land-tbk-pt" target="_blank" rel="noopener"> Agung Podomoro Land (APLN IJ)</a> and<a href="https://www.smartkarma.com/entities/indika-energy-tbk-pt" target="_blank" rel="noopener"> Indika Energy (INDY IJ)</a> Q32020 results.</p><p>In<a href="https://www.smartkarma.com/insights/indika-energy-tear-sheet-lucror-analytics-0543e70b-5604-4676-8d27-19456ce1bf12" target="_blank" rel="noopener"> Indika Energy - Tear Sheet - Lucror Analytics</a>,<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> provides a bird's eye view of<a href="https://www.smartkarma.com/entities/indika-energy-tbk-pt" target="_blank" rel="noopener"> Indika Energy (INDY IJ)</a>.  </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.  
Let's get DigitalThe Monetary Authority of Singapore (MAS) announced last week that it will award a full digital bank license to Sea Ltd (SE US) and to a consortium including Grab (0967655D SP) and Singtel (ST SP) in a move to liberalize the local banking industry. Like traditional banks, these players will provide retail customers with services such as opening accounts, deposits, as well as issuing debit and credit cards, The difference being that digital banks will not have a physical presence and all banking services will be done online. More below the fold...Equity Bottom UpIn Bank Negara Indonesia Persero (BBNI IJ) - Still More Pain to Come, CrossASEAN insight provider Angus Mackintosh revisits Bank Negara Indonesia Persero (BBNI IJ) after a call with management revealing some continuing risks on the horizon.In Gojek and Grab Merger Wishful Thinking?, Angus Mackintosh zeros in on the resurgence of rumors of a merger between Gojek (1379371D IJ) and Grab (0967655D SP), which looks like wishful thinking from a Grab perspective, and indeed from Softbank's major shareholder. In Prodia Widyahusada (PRDA IJ) - Testing Times a Positive, CrossASEAN insight provider Angus Mackintosh returns to look at Indonesian diagnostics leader Prodia Widyahusada (PRDA IJ), after its positive 3Q2020 results.In Thai Corona Crisis (December): The Looming Shadow of Myanmar,  Thai guru Athaporn Arayasantiparb, CFA revisits the pandemic situation in Thailand after a number of infected Burmese workers illegally crossed into Thailand without proper health checks. In Bank Danamon – Profit Transformation Not Recognized, banking specialist Daniel Tabbush reports back on Bank Danamon Indonesia (BDMN IJ)'s Q32020 results. He sees that BDMN having the potential to see a significant rebound in ROA. In Silicon Stories N: Humanica and RS Tout Their Online Credentials, Thai guru Athaporn Arayasantiparb, CFA reports back after visiting two companies that clearly benefit from the remote economy popularized by the pandemic including Humanica PCL (HUMAN TB) and RS PCL (RS TB).In Malaysia CIMB Group – Reserve Cover Light Still, banking specialist Thomas J. Monaco discusses 3Q2020  results from CIMB Group Holdings (CIMB MK) and highlights two important trends.In Kerry Express IPO: Valuation Insights, IPO specialist Arun George returns to look at Kerry Express Thailand (KEX TB) valuations after providing a view on the company's 3Q20 results. Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. 
In TFG: Solid Outlook, Though It Should Retreat from 3Q20 Peak, Country Group report back after the Thai Foods Group Public Company (TFG TB) analyst meeting. 
In PTTEP: Target to Achieve 6% CAGR Sales Growth in 2021-25, Country Group revisits  PTT E&amp;P (PTTEP TB), which is targeting petroleum sales growth at 6% CAGR in next 5 years. The company rolled out its 5-year investment plan allocating US$23.6bn towards long-term growth.
In GUNKUL: Power Business to Drive 2021 Earnings, Country Group returns to look at Gunkul Engineering (GUNKUL TB) post its analyst briefing. 
In ACE: Better Gross Margin but We Stay on HOLD, Dr. Andrew Stotz, CFA maintains a "HOLD" son Absolute Clean Energy PCL (ACE TB). He thinks ACE deserves to trade at a premium to Thai Utilities due to its pronounced growth prospects and targets a 2021E PE of 23.2x. 
In TEAMG: Value Play in Consulting to Benefit from Government Stimulus,Dr. Andrew Stotz, CFA maintains a BUY recommendation on TEAM Consulting Engineering and Management (TEAMG TB) with an unchanged target price of Bt2.81, implying an upside of 29% from the current share price.
Credit InsightsIn ABM Investama - Earnings Flash - 9M FY 2020 Results - Lucror Analytics, credit specialist Trung Nguyen provides a bird's eye view on ABM Investama (ABMM IJ). In Morning Views Asia: Pan Brothers, Soechi Lines, our friends Lucror Analytics zero in on Pan Brothers (PBRX IJ)'s plan issue up to USD 350 mn of 5-Year Notes.  In Morning Views Asia: Agung Podomoro Land, Guangzhou R&amp;F Properties, Indika Energy, Jingrui Holdings, credit specialist Trung Nguyen provides an initial view on Agung Podomoro Land (APLN IJ) and Indika Energy (INDY IJ) Q32020 results.In Indika Energy - Tear Sheet - Lucror Analytics, Trung Nguyen provides a bird's eye view of Indika Energy (INDY IJ).  

The Week that Was in ASEAN@Smartkarma - Let's Get Digital, BNI's Pains, and Diagnostic Labs

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> just released 3Q2020 results which look encouraging, with revenue growth of +6.5% YoY and EBITDA growth of +7%, as the company effectively controlled costs during the quarter.</p>
<p>The company added 53,277 new subscribers during 3Q2020, bringing net new subscribers for 9M2020 to 147,464 and total subscribers to 815,669 at the end of 3Q2020. It has added more subscribers this year than over the past two years. </p>
<p>ARPUs remained stable at IDR369,000 per subscriber per month, whilst network penetration increased to a record high of 30.8%, with a total network size of 2,652,000 homes passed.</p>
<div class="content-highlight">
<p>Valuations for <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> look attractive with the company trading on 7.3x FY21E PER versus its 5-year average of 12.4x forward PER. The key overhang and cost issue for the company is its decision to build its own network of poles (financed by debt) to carry its fibre over the next two years to avoid the risk of future rental hikes by PLN. Offsetting this is the fact that there are potential suitors out there looking to take a stake in the company, given the attractiveness of its fibre network, especially for 5G in the future. </p>
</div>

Link Net (LINK IJ) just released 3Q2020 results which look encouraging, with revenue growth of +6.5% YoY and EBITDA growth of +7%, as the company effectively controlled costs during the quarter.
The company added 53,277 new subscribers during 3Q2020, bringing net new subscribers for 9M2020 to 147,464 and total subscribers to 815,669 at the end of 3Q2020. It has added more subscribers this year than over the past two years. 
ARPUs remained stable at IDR369,000 per subscriber per month, whilst network penetration increased to a record high of 30.8%, with a total network size of 2,652,000 homes passed.

Valuations for Link Net (LINK IJ) look attractive with the company trading on 7.3x FY21E PER versus its 5-year average of 12.4x forward PER. The key overhang and cost issue for the company is its decision to build its own network of poles (financed by debt) to carry its fibre over the next two years to avoid the risk of future rental hikes by PLN. Offsetting this is the fact that there are potential suitors out there looking to take a stake in the company, given the attractiveness of its fibre network, especially for 5G in the future. 


Link Net (LINK IJ) - Moving into Pole Position

<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/vietnam-in-robust-health-despite-transient-threat-of-us-s301-action" target="_blank" data-smartkarma-citation="insights:43795" rel="noopener">Vietnam in Robust Health Despite Transient Threat of US S301 Action,</a> CrossASEAN Chief Economist <a href="https://www.smartkarma.com/profiles/prasenjit-k-basu" target="_blank" data-smartkarma-citation="accounts:612" rel="noopener">Prasenjit K. Basu</a> zeros IN on the Vietnamese economy, which has been a key beneficiary of trade diversion from China. </p><p>In <a href="https://www.smartkarma.com/insights/asian-exports-covid-best-is-behind" target="_blank" data-smartkarma-citation="insights:44020" rel="noopener">Asian Exports &amp; COVID - Best Is Behind,</a><a href="https://www.smartkarma.com/profiles/sharmila-whelan" target="_blank" data-smartkarma-citation="accounts:1728" rel="noopener">Sharmila Whelan</a> looks at the prospects for Asian Exports and sees a less attractive outlook ahead. </p><h3>Equity Bottom-Up Insights</h3><p>In Indonesia,<a href="https://www.smartkarma.com/insights/media-nusantara-citra-mncn-ij-no-credit-given-for-metamorphosis" target="_blank" rel="noopener"> Media Nusantara Citra (MNCN IJ) - No Credit Given for Metamorphosis</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> examines an aggressive sell-off in<a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" rel="noopener"> Media Nusantara Citra (MNCN IJ)</a> share price, despite announcing a reasonable set of 2Q2020 results, with especially strong growth coming from its digital advertising through RCTI+ and its YouTube Multichannel Network (MCN), which now has a staggering 101m subscribers.  </p><p>In <a href="https://www.smartkarma.com/insights/indomobil-sukses-internasional-imas-ij-emerging-transport-monolith" target="_blank" data-smartkarma-citation="insights:43927" rel="noopener">Indomobil Sukses Internasional (IMAS IJ) Emerging Transport Monolith?,</a> CrossASEAN insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits <a href="https://www.smartkarma.com/entities/indomobil-sukses-internasional-tbk-pt" target="_blank" data-smartkarma-citation="entities:11738:1" rel="noopener">Indomobil Sukses Internasional (IMAS IJ),</a> which is making meaningful progress towards being a leader in automotive and transport.</p><p>In <a href="https://www.smartkarma.com/insights/bank-mestika-dharma-september-quarter-reversals-surge" target="_blank" data-smartkarma-citation="insights:44089" rel="noopener">Bank Mestika Dharma – September Quarter Reversals Surge,</a> banking specialist <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> zeros in on this small Indonesian lender, which is one of the first to report earnings and reported an improvement and reversal of credit costs. </p><p>In <a href="https://www.smartkarma.com/insights/ammb-top-decile-ph-score-and-vfm-asset" target="_blank" data-smartkarma-citation="insights:44065" rel="noopener">AMMB: Top Decile PH Score™ and VFM Asset,</a><a href="https://www.smartkarma.com/profiles/paul-hollingworth" target="_blank" data-smartkarma-citation="accounts:2554" rel="noopener">Paul Hollingworth</a> zeros in on this Malaysia lender were he find a promising outlook and attractive valuations under his model.</p><p><a href="https://www.smartkarma.com/entities/ammb-holdings-bhd" target="_blank" data-smartkarma-citation="entities:137:1" rel="noopener"></a>In Singapore,<a href="https://www.smartkarma.com/insights/trade-ideas-for-singapore-reits-implications-from-cct-cmt-merger" target="_blank" rel="noopener"> Trade Ideas for Singapore REITs - Implications from CCT+CMT Merger</a>,<a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" rel="noopener"> Sumeet Singh</a> takes a look at the long drawn out merger of CCT+CMT finally approved with minimal resistance, with the little there was coming mostly from CCT holders, the combined entity will add to the bunch of listed REITs which offer a mix of office and retail exposure. </p><p>In <a href="https://www.smartkarma.com/insights/mr-diy-ipo-store-expansion-still-going-strong-undemanding-valuation" target="_blank" data-smartkarma-citation="insights:43929" rel="noopener">MR DIY IPO - Store Expansion Still Going Strong, Undemanding Valuation,</a> IPO specialist <a href="https://www.smartkarma.com/profiles/zhen-zhou-toh" target="_blank" data-smartkarma-citation="accounts:673" rel="noopener">Zhen Zhou, Toh</a> revisits this IPO looking at its growth prospects and valuation. </p><p>In Malaysia,<a href="https://www.smartkarma.com/insights/mr-d-i-y-group-ipo-valuation-insights" target="_blank" rel="noopener"> Mr. D.I.Y. Group IPO: Valuation Insights</a>,<a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" rel="noopener"> Arun George</a> provides a view on why he believes that an attractive valuation and solid cornerstone support makes <a href="https://www.smartkarma.com/entities/mr-d-i-y-group" target="_blank" data-smartkarma-citation="entities:28430:1" rel="noopener">MR D.I.Y. Group (MRDIY MK)</a> IPO tempting at the proposed price. </p><p>In Malaysia,<a href="https://www.smartkarma.com/insights/mr-diy-ipo-quality-homes" target="_blank" rel="noopener"> MR DIY IPO: Quality Homes</a>,<a href="https://www.smartkarma.com/profiles/shifara-samsudeen-acma-cgma" target="_blank" rel="noopener"> Shifara Samsudeen</a> takes an initial look at Malaysia's home improvement retailer Mr. D.I.Y.  which has filed for an IPO which will raise approximately RM1.5bn (US$362m), the largest listing in three years in Malaysia. The company has set the price at RM1.60 per share and is expected to list the IPO on the 14th of October.</p><p>In <a href="https://www.smartkarma.com/insights/mr-diy-ipo-inexpensive-valuation-compared-to-peers-despite-better-growth-profile" target="_blank" data-smartkarma-citation="insights:44019" rel="noopener">MR DIY IPO: Inexpensive Valuation Compared to Peers Despite Better Growth Profile,</a><a href="https://www.smartkarma.com/profiles/shifara-samsudeen-acma-cgma" target="_blank" data-smartkarma-citation="accounts:3297" rel="noopener">Shifara Samsudeen,</a> provides us with her views on this upcoming Malaysian IPO. </p><p>In Thailand,<a href="https://www.smartkarma.com/insights/kerry-express-best-inc-two-approaches-to-ecommerce-logistics-growth-in-se-asia" target="_blank" rel="noopener"> Kerry Express &amp; Best Inc: Two Approaches to ECommerce Logistics Growth in SE Asia</a> examines the different approaches pursued in eCommerce fulfillment in SE Asia by the upcoming IPO<a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" rel="noopener"> Kerry Express Thailand (KEX TB)</a> and by<a href="https://www.smartkarma.com/entities/best-inc" target="_blank" rel="noopener"> BEST Inc (BEST US). </a></p><p>In <a href="https://www.smartkarma.com/insights/bgrim-positive-sentiments-from-joining-hands-with-pea-encom" target="_blank" data-smartkarma-citation="insights:43897" rel="noopener">BGRIM: Positive Sentiments from Joining Hands with PEA ENCOM,</a> our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> expect the cooperation with PEA ENCOM will help <a href="https://www.smartkarma.com/entities/b-grimm-pcl" target="_blank" data-smartkarma-citation="entities:23996:1" rel="noopener">B Grimm Power (BGRIM TB)</a> to expand the SPP (Small Power Producer) client base and have synergy benefits of up to THB1.0bn from cost-saving and service efficiency. </p><h3>Sector and Thematic</h3><p>In<a href="https://www.smartkarma.com/insights/indonesia-banks-positives-clouded-but-persist" target="_blank" rel="noopener"> Indonesia Banks – Positives Clouded, But Persist</a>, banking specialist<a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" rel="noopener"> Daniel Tabbush</a> discusses why the country's credit penetration remains low and margins remain higher than almost any other country. Due to the ill-conceived interruption of economies and a more conservative bank system due to the financial crisis in 1997, credit growth is now lower in Indonesia than in most other Asian-Pacific countries. </p><p>In Thailand,<a href="https://www.smartkarma.com/insights/silicon-stories-m-if-you-can-t-beat-them-join-them" target="_blank" rel="noopener"> Silicon Stories M: If You Can't Beat Them, Join Them</a>, Thai specialist<a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" rel="noopener"> Athaporn Arayasantiparb, CFA</a> takes a look at <a href="https://www.smartkarma.com/entities/bank-of-ayudhya-pcl" target="_blank" data-smartkarma-citation="entities:136:1" rel="noopener">Bank Of Ayudhya (BAY TB)</a>,  which has realized that it is easier to partner with Internet startups than build businesses from scratch. </p><p>In <a href="https://www.smartkarma.com/insights/sti-index-rebalance-in-the-race-to-replace-cct-finally-some-daylight-emerges" target="_blank" data-smartkarma-citation="insights:43862" rel="noopener">STI Index Rebalance: In the Race to Replace CCT, Finally Some Daylight Emerges,</a><a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> looks at the upcoming Singapore STI Index rebalancing. </p><h3>Credit Insights</h3><p>In<a href="https://www.smartkarma.com/insights/thai-bank-capital-constraints-debt-capital-issuance-needs-and-potential-impacts" target="_blank" rel="noopener"> Thai Bank Capital Constraints, Debt Capital Issuance Needs, and Potential Impact,</a> Credit Specialist<a href="https://www.smartkarma.com/profiles/hank-calenti-cfa" target="_blank" rel="noopener"> Hank Calenti, CFA</a> discusses the potential for further capital issuance by Thai banks following<a href="https://www.smartkarma.com/entities/bangkok-bank-public-co-ltd" target="_blank" rel="noopener"> Bangkok Bank Public (BBL TB)</a>'s recent bond issue. </p><p>In <a href="https://www.smartkarma.com/insights/thai-bank-capital-and-chronic-covid-19-sensitivity" target="_blank" data-smartkarma-citation="insights:44011" rel="noopener">Thai Bank Capital and Chronic COVID-19 Sensitivity,</a><a href="https://www.smartkarma.com/profiles/hank-calenti-cfa" target="_blank" data-smartkarma-citation="accounts:5194" rel="noopener">Hank Calenti, CFA</a> dives into the potential scenarios for Thai Banks should COVID-19 loan relief decay become chronic. </p><p>In Indonesia,<a href="https://www.smartkarma.com/insights/the-plight-of-the-garuda" target="_blank" rel="noopener"> The Plight of the Garuda</a>, Credit Specialist<a href="https://www.smartkarma.com/profiles/derek-silva" target="_blank" rel="noopener"> Derek Silva</a>,  examines Garuda's financial condition, which is now becoming critical. </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 Vietnam in Robust Health Despite Transient Threat of US S301 Action, CrossASEAN Chief Economist Prasenjit K. Basu zeros IN on the Vietnamese economy, which has been a key beneficiary of trade diversion from China. In Asian Exports &amp; COVID - Best Is Behind,Sharmila Whelan looks at the prospects for Asian Exports and sees a less attractive outlook ahead. Equity Bottom-Up InsightsIn Indonesia, Media Nusantara Citra (MNCN IJ) - No Credit Given for Metamorphosis, CrossASEAN insight provider Angus Mackintosh examines an aggressive sell-off in Media Nusantara Citra (MNCN IJ) share price, despite announcing a reasonable set of 2Q2020 results, with especially strong growth coming from its digital advertising through RCTI+ and its YouTube Multichannel Network (MCN), which now has a staggering 101m subscribers.  In Indomobil Sukses Internasional (IMAS IJ) Emerging Transport Monolith?, CrossASEAN insight Provider Angus Mackintosh revisits Indomobil Sukses Internasional (IMAS IJ), which is making meaningful progress towards being a leader in automotive and transport.In Bank Mestika Dharma – September Quarter Reversals Surge, banking specialist Daniel Tabbush zeros in on this small Indonesian lender, which is one of the first to report earnings and reported an improvement and reversal of credit costs. In AMMB: Top Decile PH Score™ and VFM Asset,Paul Hollingworth zeros in on this Malaysia lender were he find a promising outlook and attractive valuations under his model.In Singapore, Trade Ideas for Singapore REITs - Implications from CCT+CMT Merger, Sumeet Singh takes a look at the long drawn out merger of CCT+CMT finally approved with minimal resistance, with the little there was coming mostly from CCT holders, the combined entity will add to the bunch of listed REITs which offer a mix of office and retail exposure. In MR DIY IPO - Store Expansion Still Going Strong, Undemanding Valuation, IPO specialist Zhen Zhou, Toh revisits this IPO looking at its growth prospects and valuation. In Malaysia, Mr. D.I.Y. Group IPO: Valuation Insights, Arun George provides a view on why he believes that an attractive valuation and solid cornerstone support makes MR D.I.Y. Group (MRDIY MK) IPO tempting at the proposed price. In Malaysia, MR DIY IPO: Quality Homes, Shifara Samsudeen takes an initial look at Malaysia's home improvement retailer Mr. D.I.Y.  which has filed for an IPO which will raise approximately RM1.5bn (US$362m), the largest listing in three years in Malaysia. The company has set the price at RM1.60 per share and is expected to list the IPO on the 14th of October.In MR DIY IPO: Inexpensive Valuation Compared to Peers Despite Better Growth Profile,Shifara Samsudeen, provides us with her views on this upcoming Malaysian IPO. In Thailand, Kerry Express &amp; Best Inc: Two Approaches to ECommerce Logistics Growth in SE Asia examines the different approaches pursued in eCommerce fulfillment in SE Asia by the upcoming IPO Kerry Express Thailand (KEX TB) and by BEST Inc (BEST US). In BGRIM: Positive Sentiments from Joining Hands with PEA ENCOM, our friends at Country Group expect the cooperation with PEA ENCOM will help B Grimm Power (BGRIM TB) to expand the SPP (Small Power Producer) client base and have synergy benefits of up to THB1.0bn from cost-saving and service efficiency. Sector and ThematicIn Indonesia Banks – Positives Clouded, But Persist, banking specialist Daniel Tabbush discusses why the country's credit penetration remains low and margins remain higher than almost any other country. Due to the ill-conceived interruption of economies and a more conservative bank system due to the financial crisis in 1997, credit growth is now lower in Indonesia than in most other Asian-Pacific countries. In Thailand, Silicon Stories M: If You Can't Beat Them, Join Them, Thai specialist Athaporn Arayasantiparb, CFA takes a look at Bank Of Ayudhya (BAY TB),  which has realized that it is easier to partner with Internet startups than build businesses from scratch. In STI Index Rebalance: In the Race to Replace CCT, Finally Some Daylight Emerges,Brian Freitas looks at the upcoming Singapore STI Index rebalancing. Credit InsightsIn Thai Bank Capital Constraints, Debt Capital Issuance Needs, and Potential Impact, Credit Specialist Hank Calenti, CFA discusses the potential for further capital issuance by Thai banks following Bangkok Bank Public (BBL TB)'s recent bond issue. In Thai Bank Capital and Chronic COVID-19 Sensitivity,Hank Calenti, CFA dives into the potential scenarios for Thai Banks should COVID-19 loan relief decay become chronic. In Indonesia, The Plight of the Garuda, Credit Specialist Derek Silva,  examines Garuda's financial condition, which is now becoming critical. 

The NEW Week that Was in ASEAN@Smartkarma - Omnibus Laws, Credit Costs, and Mr DIY

<p><a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> has seen an aggressive sell-off in its share price, despite announcing a reasonable set of 2Q2020 results, with especially strong growth coming from its digital advertising through RCTI+ and its YouTube Multichannel Network (MCN), which now has a staggering 101m subscribers.  </p>
<p>2Q2020 saw some impact from COVID-19, with overall revenues falling by -18%, to a large extent due to the cancellation of a number of big promotional events, as well as sporting fixtures such as the European Cup soccer league. </p>
<p>Overall ad-revenue fell by -20% in 2Q2020 but digital revenue grew by +27% YoY, with non-digital falling by -24%. This was better than the overall industry given its ability to continue to produce fresh content at its studios and more non-time-consuming (NTC) ads. </p>
<p><a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> also saw rapid growth in its 3rd party content licensing business to PayTV and OTT players, which grew +54% in 1H2020 IDR113bn. </p>
<p>The company has also teamed up with <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> to air its content and is in the process of signing an agreement with Tik Tok, which will also encompass talent management. </p>
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<p><a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> will continue to benefit from a return to growth for its core free-to-air advertising business as the economy recovers but will also see increasing importance for its digital business, which does not look to be reflected in the share price. The company looks attractive from a valuation perspective, now trading on 4.4x FY21E PER versus its 3-year average of 8.4x forward PER, with the prospect of a +20% rebound in EPS in FY21E. It trades on 0.77x FY20E PBV yet generates an FY20E ROE of 15.5%</p>
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Media Nusantara Citra (MNCN IJ) has seen an aggressive sell-off in its share price, despite announcing a reasonable set of 2Q2020 results, with especially strong growth coming from its digital advertising through RCTI+ and its YouTube Multichannel Network (MCN), which now has a staggering 101m subscribers.  
2Q2020 saw some impact from COVID-19, with overall revenues falling by -18%, to a large extent due to the cancellation of a number of big promotional events, as well as sporting fixtures such as the European Cup soccer league. 
Overall ad-revenue fell by -20% in 2Q2020 but digital revenue grew by +27% YoY, with non-digital falling by -24%. This was better than the overall industry given its ability to continue to produce fresh content at its studios and more non-time-consuming (NTC) ads. 
Media Nusantara Citra (MNCN IJ) also saw rapid growth in its 3rd party content licensing business to PayTV and OTT players, which grew +54% in 1H2020 IDR113bn. 
The company has also teamed up with Facebook Inc A (FB US) to air its content and is in the process of signing an agreement with Tik Tok, which will also encompass talent management. 

Media Nusantara Citra (MNCN IJ) will continue to benefit from a return to growth for its core free-to-air advertising business as the economy recovers but will also see increasing importance for its digital business, which does not look to be reflected in the share price. The company looks attractive from a valuation perspective, now trading on 4.4x FY21E PER versus its 3-year average of 8.4x forward PER, with the prospect of a +20% rebound in EPS in FY21E. It trades on 0.77x FY20E PBV yet generates an FY20E ROE of 15.5%


Media Nusantara Citra (MNCN IJ) - No Credit Given for Metamorphosis

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<p><em><strong>Corrigenda: There is an error in this Insight. Please note the correction.</strong></em></p>
<p><em><strong>Correction: The <a href="https://www.smartkarma.com/insights/singapore-sti-macro-bear-pressure-mounting-with-tactical-relief-from-2-400" target="_blank" data-smartkarma-citation="insights:42932" rel="noopener">Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400</a> Insight is improperly attributed to Thomas Monaco. That Insight was published by <a href="https://www.smartkarma.com/profiles/thomas-schroeder" target="_blank" data-smartkarma-citation="accounts:381" rel="noopener">Thomas Schroeder</a>.</strong></em></p>
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<hr>
<div class="content-highlight">
<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.</p>
<p>Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma.</a></p>
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<h3>Equity Bottom-Up Insights</h3>
<p>In <a href="https://www.smartkarma.com/insights/kalbe-farma-klbf-ij-a-nutritional-spin-off" target="_blank" data-smartkarma-citation="insights:42533" rel="noopener">Kalbe Farma (KLBF IJ) - A Nutritional Spin-Off?,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits South East Asia's largest pharmaceutical company in light of news that the company is considering spinning off its Nutritionals division to raise around US$500m. </p>
<p>In <a href="https://www.smartkarma.com/insights/link-net-tbk-pt-link-ij-summer-migration-at-last" target="_blank" data-smartkarma-citation="insights:42829" rel="noopener">Link Net Tbk Pt (LINK IJ) - Summer Migration at Last,</a> <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits Indonesia's highest quality high-speed broadband provider following a call with managment, which focused on its recent results, as well as the decision to build its own pole infrastructure to carry its fibre.  </p>
<p>In <a href="https://www.smartkarma.com/insights/singtel-make-the-call" target="_blank" data-smartkarma-citation="insights:42900" rel="noopener">SingTel: Make The Call,</a> <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> zeros in on Singapore's leading telecom provider and finds deep value appearing in the stock.</p>
<p>In <a href="https://www.smartkarma.com/insights/scg-packaging-ipo-initiation-shrink-wrapping" target="_blank" data-smartkarma-citation="insights:42967" rel="noopener">SCG Packaging IPO Initiation: Shrink Wrapping,</a> <a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" data-smartkarma-citation="accounts:1680" rel="noopener">Arun George</a> takes a first look at the upcoming spin-off from <a href="https://www.smartkarma.com/entities/siam-cement-pcl-the" target="_blank" data-smartkarma-citation="entities:2589:1" rel="noopener">Siam Cement (SCC TB)</a> and IPO of SCG Packaging, which will get a lot of investor focus given ist size and share in of the packaging market in SE Asia. </p>
<p>In <a href="https://www.smartkarma.com/insights/sembcorp-last-chance-before" target="_blank" data-smartkarma-citation="insights:42886" rel="noopener">Sembcorp - Last Chance Before...</a> <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> looks at the enormously dilutive rights issue and de-merger of Semcorp Marine. </p>
<p> In <a href="https://www.smartkarma.com/insights/singapore-sti-macro-bear-pressure-mounting-with-tactical-relief-from-2-400" target="_blank" data-smartkarma-citation="insights:42932" rel="noopener">Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400,</a> technical analysis specialist <a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" data-smartkarma-citation="accounts:1716" rel="noopener">Thomas J. Monaco</a> works his technical magic on the <a href="https://www.smartkarma.com/entities/ftse-straits-times-index-sti" target="_blank" data-smartkarma-citation="entities:22902:1" rel="noopener">FTSE Straits Times Index (STI) (STI INDEX).</a></p>
<p>In <a href="https://www.smartkarma.com/insights/ratch-3q20-earnings-to-improve-from-overseas-performance" target="_blank" data-smartkarma-citation="insights:42789" rel="noopener">RATCH: 3Q20 Earnings to Improve from Overseas Performance</a>, our friend at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> report back on <a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratchaburi Electric (RATCH TB)</a> post its more recent analyst meeting, which left a positive impression.  </p>
<p>In <a href="https://www.smartkarma.com/insights/b-work-good-dividend-yield-makes-an-attractive-investment" target="_blank" data-smartkarma-citation="insights:42782" rel="noopener">B-WORK: Good Dividend Yield Makes an Attractive Investment,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/bualuang-office-leasehold-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:26187:1" rel="noopener">Bualuang Office Leasehold Real Estate Investment Trust (B-WORK TB)</a> and takes a positive view. </p>
<p>In <a href="https://www.smartkarma.com/insights/rbf-the-excessive-outperformance-may-come-to-a-halt" target="_blank" data-smartkarma-citation="insights:42788" rel="noopener">RBF: The Excessive Outperformance May Come to a Halt,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> upgrades his recommendation on <a href="https://www.smartkarma.com/entities/r-b-food-supply-pcl" target="_blank" data-smartkarma-citation="entities:28949:1" rel="noopener">R&amp;B Food Supply PCL (RBF TB)</a> to HOLD from SELL based on raising his target price of THB9.25 from THB8.70, implying a downside of 9% from the current price. </p>
<p>In <a href="https://www.smartkarma.com/insights/sti-acquisition-benefits-are-not-fully-priced-in-strong-buy" target="_blank" data-smartkarma-citation="insights:42785" rel="noopener">STI: Acquisition Benefits Are Not Fully Priced In, Strong BUY,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/stonehenge-inter-pcl" target="_blank" data-smartkarma-citation="entities:27353:1" rel="noopener">Stonehenge Inter (STI TB)</a> with a BUY recommendation based on his target of THB10.10, implying an upside of 31% from the current share price. </p>
<p>In <a href="https://www.smartkarma.com/insights/dod-strong-performance-deserves-a-re-rating" target="_blank" data-smartkarma-citation="insights:42676" rel="noopener">DOD: Strong Performance Deserves a Re-Rating,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> upgrades his recommendation on <a href="https://www.smartkarma.com/entities/dod-biotech-pcl" target="_blank" data-smartkarma-citation="entities:26179:1" rel="noopener">DOD Biotech PCL (DOD TB)</a> to BUY from HOLD based on raising his target price to Bt10.70 from Bt7.55, implying an upside of 26% from the current price. </p>
<p>In <a href="https://www.smartkarma.com/insights/vranda-the-calm-before-challenging-times" target="_blank" data-smartkarma-citation="insights:42781" rel="noopener">VRANDA: The Calm Before Challenging Times,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> has a SELL recommendation on <a href="https://www.smartkarma.com/entities/veranda-resort-pcl" target="_blank" data-smartkarma-citation="entities:29176:1" rel="noopener">Veranda Resort PCL (VRANDA TB)</a> based on a target price of THB4.30, implying a downside of 26% from the current share price. </p>
<p>In <a href="https://www.smartkarma.com/insights/ace-results-are-not-stunning-stay-on-hold" target="_blank" data-smartkarma-citation="insights:42784" rel="noopener">ACE: Results Are Not Stunning, Stay on HOLD,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> upgrades his recommendation on <a href="https://www.smartkarma.com/entities/absolute-clean-energy-pcl" target="_blank" data-smartkarma-citation="entities:29155:1" rel="noopener">Absolute Clean Energy PCL (ACE TB)</a> to HOLD from SELL based on raising his target price to THB3.49 from THB2.64, implying an upside of 8% from the current price. </p>
<p>In <a href="https://www.smartkarma.com/insights/spa-weak-demand-continues-to-pressure-2h20-earnings" target="_blank" data-smartkarma-citation="insights:42813" rel="noopener">SPA: Weak Demand Continues to Pressure 2H20 Earnings,</a> <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr. Andrew Stotz, CFA</a> downgrades <a href="https://www.smartkarma.com/entities/siam-wellness-group-pcl" target="_blank" data-smartkarma-citation="entities:3765:1" rel="noopener">Siam Wellness Group (SPA TB)</a> from BUY to HOLD rating and cut his target price by 31% to THB6.6 to factor in weakening earnings momentum in 2H20. </p>
<p>In <a href="https://www.smartkarma.com/insights/gunkul-new-60mw-power-plant-to-drive-2h20-earnings" target="_blank" data-smartkarma-citation="insights:42820" rel="noopener">GUNKUL: New 60MW Power Plant to Drive 2H20 Earnings,</a> <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> maintain a BUY rating on <a href="https://www.smartkarma.com/entities/gunkul-engineering-pcl" target="_blank" data-smartkarma-citation="entities:15272:1" rel="noopener">Gunkul Engineering (GUNKUL TB)</a> with a target price of THB3.24 derived using DCF method (WACC 7.8% and TG 1%) implying 11.4x FY20E PER or 0.5x relative PER to Thai utility sector. </p>
<h3>Sector and Thematic Insights</h3>
<p>In <a href="https://www.smartkarma.com/insights/telecom-review-sept-2020-ais-and-asiasoft-get-aggressive-on-gaming" target="_blank" data-smartkarma-citation="insights:41022" rel="noopener">Telecom Review (Sept 2020): AIS and AsiaSoft Get Aggressive on Gaming,</a> our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> takes a look at gaming, specifically related to <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl" target="_blank" data-smartkarma-citation="entities:947:1" rel="noopener">Advanced Info Service (ADVANC TB)</a> and <a href="https://www.smartkarma.com/entities/asiasoft-corp-pcl" target="_blank" data-smartkarma-citation="entities:5429:1" rel="noopener">Asiasoft Corp (AS TB)</a> in Thailand. </p>


Corrigenda: There is an error in this Insight. Please note the correction.
Correction: The Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400 Insight is improperly attributed to Thomas Monaco. That Insight was published by Thomas Schroeder.



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.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in ASEAN@Smartkarma.

Equity Bottom-Up Insights
In Kalbe Farma (KLBF IJ) - A Nutritional Spin-Off?, CrossASEAN Insight Provider Angus Mackintosh revisits South East Asia's largest pharmaceutical company in light of news that the company is considering spinning off its Nutritionals division to raise around US$500m. 
In Link Net Tbk Pt (LINK IJ) - Summer Migration at Last, Angus Mackintosh revisits Indonesia's highest quality high-speed broadband provider following a call with managment, which focused on its recent results, as well as the decision to build its own pole infrastructure to carry its fibre.  
In SingTel: Make The Call, David Blennerhassett zeros in on Singapore's leading telecom provider and finds deep value appearing in the stock.
In SCG Packaging IPO Initiation: Shrink Wrapping, Arun George takes a first look at the upcoming spin-off from Siam Cement (SCC TB) and IPO of SCG Packaging, which will get a lot of investor focus given ist size and share in of the packaging market in SE Asia. 
In Sembcorp - Last Chance Before... Travis Lundy looks at the enormously dilutive rights issue and de-merger of Semcorp Marine. 
 In Singapore STI Macro Bear Pressure Mounting with Tactical Relief from 2,400, technical analysis specialist Thomas J. Monaco works his technical magic on the FTSE Straits Times Index (STI) (STI INDEX).
In RATCH: 3Q20 Earnings to Improve from Overseas Performance, our friend at Country Group report back on Ratchaburi Electric (RATCH TB) post its more recent analyst meeting, which left a positive impression.  
In B-WORK: Good Dividend Yield Makes an Attractive Investment, Dr. Andrew Stotz, CFA revisits Bualuang Office Leasehold Real Estate Investment Trust (B-WORK TB) and takes a positive view. 
In RBF: The Excessive Outperformance May Come to a Halt, Dr. Andrew Stotz, CFA upgrades his recommendation on R&amp;B Food Supply PCL (RBF TB) to HOLD from SELL based on raising his target price of THB9.25 from THB8.70, implying a downside of 9% from the current price. 
In STI: Acquisition Benefits Are Not Fully Priced In, Strong BUY, Dr. Andrew Stotz, CFA revisits Stonehenge Inter (STI TB) with a BUY recommendation based on his target of THB10.10, implying an upside of 31% from the current share price. 
In DOD: Strong Performance Deserves a Re-Rating, Dr. Andrew Stotz, CFA upgrades his recommendation on DOD Biotech PCL (DOD TB) to BUY from HOLD based on raising his target price to Bt10.70 from Bt7.55, implying an upside of 26% from the current price. 
In VRANDA: The Calm Before Challenging Times, Dr. Andrew Stotz, CFA has a SELL recommendation on Veranda Resort PCL (VRANDA TB) based on a target price of THB4.30, implying a downside of 26% from the current share price. 
In ACE: Results Are Not Stunning, Stay on HOLD, Dr. Andrew Stotz, CFA upgrades his recommendation on Absolute Clean Energy PCL (ACE TB) to HOLD from SELL based on raising his target price to THB3.49 from THB2.64, implying an upside of 8% from the current price. 
In SPA: Weak Demand Continues to Pressure 2H20 Earnings, Dr. Andrew Stotz, CFA downgrades Siam Wellness Group (SPA TB) from BUY to HOLD rating and cut his target price by 31% to THB6.6 to factor in weakening earnings momentum in 2H20. 
In GUNKUL: New 60MW Power Plant to Drive 2H20 Earnings, Country Group maintain a BUY rating on Gunkul Engineering (GUNKUL TB) with a target price of THB3.24 derived using DCF method (WACC 7.8% and TG 1%) implying 11.4x FY20E PER or 0.5x relative PER to Thai utility sector. 
Sector and Thematic Insights
In Telecom Review (Sept 2020): AIS and AsiaSoft Get Aggressive on Gaming, our Thai guru Athaporn Arayasantiparb, CFA takes a look at gaming, specifically related to Advanced Info Service (ADVANC TB) and Asiasoft Corp (AS TB) in Thailand. 

The Week that Was in ASEAN@Smartkama - Kalbe Spin-Off, SingTel's Deep Value, and Thailand's Gamers

Indonesia

PT Media Nusantara Citra Tbk is the largest integrated media company in Southeast Asia. The Company has 3 main businesses 1) 4 free-to-air TV stations with a dominant audience share of 40% 2) The largest content production house producing up to 20,000 hours annually while managing the largest talent agency with almost 400 talents 3) Digital businesses: the largest social media presence in Indonesia through Youtube (100 million subscribers), Facebook and TikTok. 3 online portals, okezone.com, sindonews.com and inews.id with more than 24 million unique visitors daily. RCTI+, the largest entertainment super app in Indonesia with AVOD business model.

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Media Nusantara Citra (MNCN IJ)

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