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>This past week's offering of Insights across 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. 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></div><h2>Macro Insights</h2><p>In <a href="https://www.smartkarma.com/insights/fintech-lending-corraled-gsp-in-doubt-oil-trading-unveiled-health-ministry-muddles-polls" target="_blank" data-smartkarma-citation="insights:37039" rel="noopener">Fintech Lending Corraled / GSP in Doubt / Oil Trading Unveiled / Health Ministry Muddles / Polls,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/kevin-o-rourke" target="_blank" data-smartkarma-citation="accounts:2060" rel="noopener">Kevin O’Rourke</a> highlights the most important political and economic developments in Indonesia over the past week. </p><p>In <a href="https://www.smartkarma.com/insights/mahathir-resigns-after-an-attempted-coup-against-his-successor-watch-this-space" target="_blank" data-smartkarma-citation="insights:36875" rel="noopener">Mahathir Resigns After an Attempted Coup Against His Successor (Watch This Space!),</a> CrossASEAN 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 recent resignation of Malaysia's PM. </p><p>In <a href="https://www.smartkarma.com/insights/malaysia-s-political-turmoil-takes-a-new-twist" target="_blank" data-smartkarma-citation="insights:36949" rel="noopener">Malaysia’s Political Turmoil Takes a New Twist,</a><a href="https://www.smartkarma.com/profiles/dr-jim-walker" target="_blank" data-smartkarma-citation="accounts:1628" rel="noopener">Dr. Jim Walker</a> lays out his views on the recent resignation of Mahatir's PM. When he visited Malaysia in January it became more and more obvious that the reversal in its Austrian stress indicator (ASI) fortunes were much more to do with political in-fighting than economic factors.</p><p>In <a href="https://www.smartkarma.com/insights/china-dominates-asian-trade-the-elephant-in-the-room" target="_blank" data-smartkarma-citation="insights:36764" rel="noopener">China Dominates Asian Trade: The Elephant In The Room,</a><a href="https://www.smartkarma.com/profiles/dr-jim-walker" target="_blank" data-smartkarma-citation="accounts:1628" rel="noopener">Dr. Jim Walker</a> comments in impact on Asian Trade from the ongoing Corona Virus outbreak. </p><h2>Equity Bottom-Up Insights</h2><p>In <a href="https://www.smartkarma.com/insights/mitra-adiperkasa-mapi-ij-oversold-indonesian-king-of-retail-on-the-ground-in-j-town" target="_blank" data-smartkarma-citation="insights:36878" rel="noopener">Mitra Adiperkasa (MAPI IJ) - Oversold Indonesian King of Retail</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 this leading retailer after a face to face meeting with management. </p><p>In <a href="https://www.smartkarma.com/insights/akr-corporindo-akra-ij-time-to-fill-up-the-tank" target="_blank" data-smartkarma-citation="insights:36944" rel="noopener">AKR Corporindo (AKRA IJ) - Time to Fill-Up the Tank?</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 Indonesia's largest private distributor of fuel and chemicals following a meeting with management in Jakarta. </p><p>In <a href="https://www.smartkarma.com/insights/matahari-department-store-lppf-ij-about-turn-and-back-to-the-core" target="_blank" data-smartkarma-citation="insights:37012" rel="noopener">Matahari Department Store (LPPF IJ) - About Turn and Back to the Core,</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 Indonesia's largest beleaguered department store operators and finds changes are afoot with a new CEO in place. </p><p>In <a href="https://www.smartkarma.com/insights/aem-holdings-aem-sp-stellar-fy19-results-on-its-way-to-be-1-billion-sgd-market-cap" target="_blank" data-smartkarma-citation="insights:36952" rel="noopener">AEM Holdings (AEM SP): Stellar FY19 Results &amp; On Its Way to Be 1 Billion SGD Market Cap,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a> revisits <a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM Holdings (AEM SP)</a> post the company's recent results.</p><p>In <a href="https://www.smartkarma.com/insights/sunpower-spwg-sp-on-target-to-deliver-fy20-fy21-financial-targets-fair-value-1-sgd-85-upside" target="_blank" data-smartkarma-citation="insights:37010" rel="noopener">Sunpower (SPWG SP): On Target To Deliver FY20/FY21 Financial Targets; Fair Value 1 SGD (85% Upside),</a><a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a> revisits the company with a keen eye on its 2020 targets. </p><p>In <a href="https://www.smartkarma.com/insights/breadtalk-privatisation-opportunism" target="_blank" data-smartkarma-citation="insights:36900" rel="noopener">Breadtalk: Privatisation Opportunism,</a><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> take a closer look at <a href="https://www.smartkarma.com/entities/breadtalk-group-ltd" target="_blank" data-smartkarma-citation="entities:15888:1" rel="noopener">Breadtalk (BREAD SP)</a> in light of its privatisation proposal. </p><p>In <a href="https://www.smartkarma.com/insights/drb-hi-com-drb-value-unlocking-part-ii" target="_blank" data-smartkarma-citation="insights:36766" rel="noopener">DRB Hi Com (DRB): Value Unlocking-Part II,</a><a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" data-smartkarma-citation="accounts:1006" rel="noopener">Henry Soediarko</a> looks to highlight the potential value in the company's vehicle inspection business. </p><p>In <a href="https://www.smartkarma.com/insights/singpost-spost-lasting-tough-times" target="_blank" data-smartkarma-citation="insights:36948" rel="noopener">Singpost (SPOST): Lasting Tough Times,</a><a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" data-smartkarma-citation="accounts:1006" rel="noopener">Henry Soediarko</a> looks at Singapore's beleaguered postman in light of its attempt to reinvent itself. </p><p>In <a href="https://www.smartkarma.com/insights/airports-of-thailand-aot-fallen-enough" target="_blank" data-smartkarma-citation="insights:36863" rel="noopener">Airports of Thailand (AOT): Fallen Enough?</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" data-smartkarma-citation="accounts:1006" rel="noopener">Henry Soediarko</a> revisits Thailand's airport operator. </p><p>In <a href="https://www.smartkarma.com/insights/dark-clouds-over-erawan" target="_blank" data-smartkarma-citation="insights:35695" rel="noopener">Dark Clouds Over Erawan,</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> revisits one of Thailand's biggest hotel operators, <a href="https://www.smartkarma.com/entities/erawan-group" target="_blank" data-smartkarma-citation="entities:11290:1" rel="noopener">Erawan Group (ERW TB),</a> which is facing tough times as tourists stay at home, as well as chemical company <a href="https://www.smartkarma.com/entities/global-green-chemicals" target="_blank" data-smartkarma-citation="entities:24215:1" rel="noopener">Global Green Chemicals (GGC TB)</a>. </p><p>In <a href="https://www.smartkarma.com/insights/bumrungrad-bangkok-dusit-s-poor-diagnosis" target="_blank" data-smartkarma-citation="insights:36977" rel="noopener">Bumrungrad: Bangkok Dusit's Poor Diagnosis,</a><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> looks <a href="https://www.smartkarma.com/entities/bangkok-dusit-med-service" target="_blank" data-smartkarma-citation="entities:875:1" rel="noopener">Bangkok Dusit Med Service (BDMS TB)</a>'s bid for <a href="https://www.smartkarma.com/entities/bumrungrad-hospital-pub-co" target="_blank" data-smartkarma-citation="entities:883:1" rel="noopener">Bumrungrad Hospital Pub Co (BH TB).</a></p><p>In <a href="https://www.smartkarma.com/insights/garuda-event-flash-potential-debt-restructuring-lucror-analytics" target="_blank" data-smartkarma-citation="insights:37044" rel="noopener">Garuda - Event Flash - Potential Debt Restructuring</a>, our friends at <a href="https://www.smartkarma.com/companies/lucror-analytics" target="_blank" data-smartkarma-citation="companies:1350" rel="noopener">Lucror Analytics</a> take a look at <a href="https://www.smartkarma.com/entities/garuda-indonesia-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12151:1" rel="noopener">Garuda Indonesia (Persero) (GIAA IJ),</a> which they suggest could be a privatisation target. </p><p>In <a href="https://www.smartkarma.com/insights/kbank-buyback-progress-and-performance-vs-bbl" target="_blank" data-smartkarma-citation="insights:36874" rel="noopener">KBANK - Buyback Progress and Performance Vs BBL,</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 impact of <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a>'s buyback program. </p><p>In <a href="https://www.smartkarma.com/insights/central-retail-cheaper-than-its-peer-basket" target="_blank" data-smartkarma-citation="insights:37050" rel="noopener">Central Retail - Cheaper Than Its Peer Basket,</a><a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> takes a look at <a href="https://www.smartkarma.com/entities/central-retail-corp-ltd" target="_blank" data-smartkarma-citation="entities:28240:1" rel="noopener">Central Retail (CRC TB)</a> following its post-IPO sell-off. </p><p>In <a href="https://www.smartkarma.com/insights/keppel-corp-update-still-trading-cheap" target="_blank" data-smartkarma-citation="insights:36946" rel="noopener">Keppel Corp Update - STILL Trading Cheap,</a> events-specialist <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> revisits <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp Ltd (KEP SP)</a> and the evolving state of the partial offer from Temasek.  </p><p>In <a href="https://www.smartkarma.com/insights/why-tesco-should-sell-not-its-thai-business" target="_blank" data-smartkarma-citation="insights:37004" rel="noopener">Why Tesco Should Not Sell Its Thai Business,</a><a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" data-smartkarma-citation="accounts:1680" rel="noopener">Arun George</a> looks at the arguements why <a href="https://www.smartkarma.com/entities/tesco-plc" target="_blank" data-smartkarma-citation="entities:22187:1" rel="noopener">Tesco PLC (TSCO LN)</a> should not sell its Thai business.</p><p><a href="https://www.smartkarma.com/entities/tesco-plc" target="_blank" data-smartkarma-citation="entities:22187:1" rel="noopener"></a>In <a href="https://www.smartkarma.com/insights/stubworld-genting-at-all-time-lows-on-politics-and-virus-concerns" target="_blank" data-smartkarma-citation="insights:36910" rel="noopener">StubWorld: Genting At All-Time Lows On Politics And Virus Concerns,</a><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> highlights the fact that <a href="https://www.smartkarma.com/entities/genting-bhd" target="_blank" data-smartkarma-citation="entities:14210:1" rel="noopener">Genting Bhd (GENT MK)</a> at rock-bottom levels and merits a look. </p><p>In <a href="https://www.smartkarma.com/insights/sprc-back-to-its-normal-operation-in-1q20" target="_blank" data-smartkarma-citation="insights:36951" rel="noopener">SPRC: Back to Its Normal Operation in 1Q20,</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> revisit <a href="https://www.smartkarma.com/entities/star-petroleum-refining-pcl" target="_blank" data-smartkarma-citation="entities:21007:1" rel="noopener">Star Petroleum Refining (SPRC TB)</a> having attended the analyst meeting, where they came out with a positive tone for SPRC’s operation 2Q20 onwards, supported by improved refinery margins. </p><p>In <a href="https://www.smartkarma.com/insights/pttgc-virus-outbreak-to-dampen-petrochemicals-demand-in-1h20" target="_blank" data-smartkarma-citation="insights:36980" rel="noopener">PTTGC: Virus Outbreak to Dampen Petrochemicals Demand in 1H20,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a>. report back having attended <a href="https://www.smartkarma.com/entities/ptt-global-chemical-pcl" target="_blank" data-smartkarma-citation="entities:19852:1" rel="noopener">Ptt Global Chemical (PTTGC TB)</a>'s analyst briefing, where the company came out with a neutral tone for its 2020 performance. </p><p>In <a href="https://www.smartkarma.com/insights/erw-covid-19-significantly-impact-to-2020-earnings" target="_blank" data-smartkarma-citation="insights:37041" rel="noopener">ERW: COVID-19 Significantly Impact to 2020 Earnings,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> assesses the impact of Corona Virus on Thai hotel operator <a href="https://www.smartkarma.com/entities/erawan-group" target="_blank" data-smartkarma-citation="entities:11290:1" rel="noopener">Erawan Group (ERW TB)</a>.</p><p>In <a href="https://www.smartkarma.com/insights/ratch-stern-and-steady-player-in-thai-utility-sector" target="_blank" data-smartkarma-citation="insights:37024" rel="noopener">RATCH: Stern and Steady Player in Thai Utility Sector,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisit this Thai utility after attending the company's analyst briefing, where the company came out with a neutral tone. </p><div class="content-highlight">
<p><em>At CrossASEAN Research we strive to produce unbiased and differentiated on the ground Insights on companies, economies and stock markets across South East Asia exclusive to Smartkarma.</em></p>
<p><em>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. </em></p>
<p><em>We offer bespoke work, company visits and tailor-made trips across South East Asia to our clients through Premium Services on Smartkarma. Please feel free to show your appreciation for any of our insights you find useful using the like button. It makes a difference!</em></p>
</div>

This past week's offering of Insights across 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. 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.Macro InsightsIn Fintech Lending Corraled / GSP in Doubt / Oil Trading Unveiled / Health Ministry Muddles / Polls, CrossASEAN Insight Provider Kevin O’Rourke highlights the most important political and economic developments in Indonesia over the past week. In Mahathir Resigns After an Attempted Coup Against His Successor (Watch This Space!), CrossASEAN Economist Prasenjit K. Basu zeros in on the recent resignation of Malaysia's PM. In Malaysia’s Political Turmoil Takes a New Twist,Dr. Jim Walker lays out his views on the recent resignation of Mahatir's PM. When he visited Malaysia in January it became more and more obvious that the reversal in its Austrian stress indicator (ASI) fortunes were much more to do with political in-fighting than economic factors.In China Dominates Asian Trade: The Elephant In The Room,Dr. Jim Walker comments in impact on Asian Trade from the ongoing Corona Virus outbreak. Equity Bottom-Up InsightsIn Mitra Adiperkasa (MAPI IJ) - Oversold Indonesian King of Retail, CrossASEAN Insight Provider Angus Mackintosh revisits this leading retailer after a face to face meeting with management. In AKR Corporindo (AKRA IJ) - Time to Fill-Up the Tank? CrossASEAN Insight Provider Angus Mackintosh revisits Indonesia's largest private distributor of fuel and chemicals following a meeting with management in Jakarta. In Matahari Department Store (LPPF IJ) - About Turn and Back to the Core, CrossASEAN Insight Provider Angus Mackintosh revisits Indonesia's largest beleaguered department store operators and finds changes are afoot with a new CEO in place. In AEM Holdings (AEM SP): Stellar FY19 Results &amp; On Its Way to Be 1 Billion SGD Market Cap, CrossASEAN Insight Provider Nicolas Van Broekhoven revisits AEM Holdings (AEM SP) post the company's recent results.In Sunpower (SPWG SP): On Target To Deliver FY20/FY21 Financial Targets; Fair Value 1 SGD (85% Upside),Nicolas Van Broekhoven revisits the company with a keen eye on its 2020 targets. In Breadtalk: Privatisation Opportunism,David Blennerhassett take a closer look at Breadtalk (BREAD SP) in light of its privatisation proposal. In DRB Hi Com (DRB): Value Unlocking-Part II,Henry Soediarko looks to highlight the potential value in the company's vehicle inspection business. In Singpost (SPOST): Lasting Tough Times,Henry Soediarko looks at Singapore's beleaguered postman in light of its attempt to reinvent itself. In Airports of Thailand (AOT): Fallen Enough? CrossASEAN Insight Provider Henry Soediarko revisits Thailand's airport operator. In Dark Clouds Over Erawan, our Thai guru Athaporn Arayasantiparb, CFA revisits one of Thailand's biggest hotel operators, Erawan Group (ERW TB), which is facing tough times as tourists stay at home, as well as chemical company Global Green Chemicals (GGC TB). In Bumrungrad: Bangkok Dusit's Poor Diagnosis,David Blennerhassett looks Bangkok Dusit Med Service (BDMS TB)'s bid for Bumrungrad Hospital Pub Co (BH TB).In Garuda - Event Flash - Potential Debt Restructuring, our friends at Lucror Analytics take a look at Garuda Indonesia (Persero) (GIAA IJ), which they suggest could be a privatisation target. In KBANK - Buyback Progress and Performance Vs BBL,Brian Freitas looks at the impact of Kasikornbank PCL (KBANK TB)'s buyback program. In Central Retail - Cheaper Than Its Peer Basket,Brian Freitas takes a look at Central Retail (CRC TB) following its post-IPO sell-off. In Keppel Corp Update - STILL Trading Cheap, events-specialist Travis Lundy revisits Keppel Corp Ltd (KEP SP) and the evolving state of the partial offer from Temasek.  In Why Tesco Should Not Sell Its Thai Business,Arun George looks at the arguements why Tesco PLC (TSCO LN) should not sell its Thai business.In StubWorld: Genting At All-Time Lows On Politics And Virus Concerns,David Blennerhassett highlights the fact that Genting Bhd (GENT MK) at rock-bottom levels and merits a look. In SPRC: Back to Its Normal Operation in 1Q20, our friends at Country Group revisit Star Petroleum Refining (SPRC TB) having attended the analyst meeting, where they came out with a positive tone for SPRC’s operation 2Q20 onwards, supported by improved refinery margins. In PTTGC: Virus Outbreak to Dampen Petrochemicals Demand in 1H20,Country Group. report back having attended Ptt Global Chemical (PTTGC TB)'s analyst briefing, where the company came out with a neutral tone for its 2020 performance. In ERW: COVID-19 Significantly Impact to 2020 Earnings,Country Group assesses the impact of Corona Virus on Thai hotel operator Erawan Group (ERW TB).In RATCH: Stern and Steady Player in Thai Utility Sector,Country Group revisit this Thai utility after attending the company's analyst briefing, where the company came out with a neutral tone. 
At CrossASEAN Research we strive to produce unbiased and differentiated on the ground Insights on companies, economies and stock markets across South East Asia exclusive to Smartkarma.
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 offer bespoke work, company visits and tailor-made trips across South East Asia to our clients through Premium Services on Smartkarma. Please feel free to show your appreciation for any of our insights you find useful using the like button. It makes a difference!


The Week That Was in ASEAN@Smartkarma - Malaysian Politics, Indonesian Consumers, and Central Retail

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:11019:1">AEM Holdings (AEM SP)</a> posted stellar FY19 results and upped its 2020 guidance. Long-term the company's TAM continues to rise and diversification away from core-client <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:16764:1">Intel Corp (INTC US)</a> will gather pace in FY20-21.</p><div>
<div><p>Management must be bullish on its FY20-FY21 prospects if we believe Charlie Munger's <em>"show me the incentives and I will show you the outcome"</em> motto. On 07/10/19 the board granted a <a href="https://links.sgx.com/FileOpen/Announcement%20PSP%20and%20ESOS%207Oct19.ashx?App=Announcement&amp;FileID=581029" target="_blank" rel="noopener">Mega Grant of Performance Shares</a> to both the Chairman and CEO to complete its Transformational Roadmap (aka diversify away from Intel). The options and share grants were priced at 1.14 SGD.</p></div>
<div id="annotable-executive_summary-2">While investors in ASEAN SMIDcaps often have to worry about the alignment of the promoters and the interests of minorities we believe they are aligned at AEM. Free float is over 83% which also <strong>makes AEM a prime takeover candidate</strong>, but not before maximum value has been extracted by the current management team.</div>
<div></div>
</div><p>Net cash is over 107M SGD (18% of market cap) and should continue to grow as its record order book for FY2020 gets delivered. So far it sees no impact from Covid-19.</p><p>Our revised Fair Value is 3.7 SGD (previously 2.5 SGD) which equates to a market cap of 1 billion SGD but an EV of just 898M SGD. At this kind of valuation the stock would still only be trading at 14.8x 2020 EPS, a level easily justified by its fast growth, high margins and high ROE. Looking at its peers such as <a href="https://www.smartkarma.com/entities/cohu-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:7990:1">Cohu Inc (COHU US)</a>, <a href="https://www.smartkarma.com/entities/teradyne-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:13088:1">Teradyne Inc (TER US)</a>, <a href="https://www.smartkarma.com/entities/chroma-ate-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:7731:1">Chroma Ate Inc (2360 TT)</a> or <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" rel="noopener" data-smartkarma-citation="entities:15302:1">Pentamaster Corp (PENT MK)</a> we note that they trade at an average P/E multiple of 23.9x, 13.5x EV/EBITDA and 3.4x P/B with a 1.8% dividend yield. </p>

AEM Holdings (AEM SP) posted stellar FY19 results and upped its 2020 guidance. Long-term the company's TAM continues to rise and diversification away from core-client Intel Corp (INTC US) will gather pace in FY20-21.
Management must be bullish on its FY20-FY21 prospects if we believe Charlie Munger's "show me the incentives and I will show you the outcome" motto. On 07/10/19 the board granted a Mega Grant of Performance Shares to both the Chairman and CEO to complete its Transformational Roadmap (aka diversify away from Intel). The options and share grants were priced at 1.14 SGD.
While investors in ASEAN SMIDcaps often have to worry about the alignment of the promoters and the interests of minorities we believe they are aligned at AEM. Free float is over 83% which also makes AEM a prime takeover candidate, but not before maximum value has been extracted by the current management team.

Net cash is over 107M SGD (18% of market cap) and should continue to grow as its record order book for FY2020 gets delivered. So far it sees no impact from Covid-19.Our revised Fair Value is 3.7 SGD (previously 2.5 SGD) which equates to a market cap of 1 billion SGD but an EV of just 898M SGD. At this kind of valuation the stock would still only be trading at 14.8x 2020 EPS, a level easily justified by its fast growth, high margins and high ROE. Looking at its peers such as Cohu Inc (COHU US), Teradyne Inc (TER US), Chroma Ate Inc (2360 TT) or Pentamaster Corp (PENT MK) we note that they trade at an average P/E multiple of 23.9x, 13.5x EV/EBITDA and 3.4x P/B with a 1.8% dividend yield. 

AEM Holdings (AEM SP): Stellar FY19 Results & On Its Way to Be 1 Billion SGD Market Cap

Malaysia

Pentamaster Corporation Berhad is an investment holding company.  The Company, through its subsidiaries, manufactures automated and semi-automated machines and equipment, designs and manufactures precision machinery components, as well as assembles and installs computerized automation systems and equipment.

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Pentamaster Corp (PENT MK)

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AEM Holdings (AEM SP): Stellar FY19 Results & On Its Way to Be 1 Billion SGD Market Cap

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