Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Lippo Malls Indonesia Retail Trust / Equity Bottom-Up

Q2 2018 gross revenue by 15.9% Y-o-Y and net property income grew by 1.3%. Similarly, 1H 2018 gross revenue grew by 13.2% and net property income grew by 2.7%. As mentioned in <a href="https://www.smartkarma.com/insights/lippo-mall-reit-downside-priced-in" target="_blank" data-smartkarma-citation="insights:19947">Lippo Mall REIT: Downside Priced-In</a> , the 10% service charges, and utility recovery charges weighed earnings growth. It also did not help that IDR has weakened by 9.7% since Q2 2017 to Q2 2018 hence distributable income decline from SGD 25.4 million to SGD 16.8 million, bringing DPU down from 0.9 cents to 0.59 cents…

Q2 2018 gross revenue by 15.9% Y-o-Y and net property income grew by 1.3%. Similarly, 1H 2018 gross revenue grew by 13.2% and net property income grew by 2.7%. As mentioned in Lippo Mall REIT: Downside Priced-In , the 10% service charges, and utility recovery charges weighed earnings growth. It also did not help that IDR has weakened by 9.7% since Q2 2017 to Q2 2018 hence distributable income decline from SGD 25.4 million to SGD 16.8 million, bringing DPU down from 0.9 cents to 0.59 cents…

Lippo Mall REIT (LMRT): Q2 2018 Result And Local Perspective of Malls

Asia ex-Japan Credit - Analyst, Bondcritic

Brayan Lai

Asia ex-Japan Credit - Analyst

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

We initiate our coverage on <a href="https://www.smartkarma.com/entities/3121" target="_blank" data-smartkarma-citation="entities:3121:1">Lippo Karawaci Tbk Pt (LPKR IJ)</a> (“LK”) with a NEUTRAL recommendation on the LPKRIJ complex and a tactical OVERWEIGHT recommendation on LPKRIJ 26s.
LK is a large integrated Indonesian property company with businesses spanning development, commercial/retail leasing, healthcare operation and asset management. The company began operations in January 1993 (listing on the JCI in 1996) with the same namesake development “Lippo Karawaci” (subsequently rebranded as Lippo Village) in Tangerang, near central Jakarta. The company is renowned for developing large-scale self-contained townships with various residential, commercial, light industrial and infrastructure elements.
The company has been on a negative credit trajectory over the past few years which has seen all 3 major rating agencies downgrade its credit from “BB-” equivalent to “B/B-“ with a negative outlook at the time of this report (with the latest downgrades effected in April/May 2018). The primary causes for the company’s credit deterioration stem from its increasing focus towards asset ownership (a long-term game requiring immense financial resources) and resultant heavy working-capital/capex requirements which have been internally funded and/or by new paid-up capital/equity. While avoiding overleveraging itself at the onset, this has also meant the company has diluted discretionary cashflow to itself, creating liquidity pressure and weakening debt-servicing.
In this note, we explore some of the causes of the weakness in the company’s credit to determine whether there are any real short-term liquidity issues, and at the same time decipher the steps required to stabilize the credit in the medium-to-long term.

We initiate our coverage on Lippo Karawaci Tbk Pt (LPKR IJ) (“LK”) with a NEUTRAL recommendation on the LPKRIJ complex and a tactical OVERWEIGHT recommendation on LPKRIJ 26s.
LK is a large integrated Indonesian property company with businesses spanning development, commercial/retail leasing, healthcare operation and asset management. The company began operations in January 1993 (listing on the JCI in 1996) with the same namesake development “Lippo Karawaci” (subsequently rebranded as Lippo Village) in Tangerang, near central Jakarta. The company is renowned for developing large-scale self-contained townships with various residential, commercial, light industrial and infrastructure elements.
The company has been on a negative credit trajectory over the past few years which has seen all 3 major rating agencies downgrade its credit from “BB-” equivalent to “B/B-“ with a negative outlook at the time of this report (with the latest downgrades effected in April/May 2018). The primary causes for the company’s credit deterioration stem from its increasing focus towards asset ownership (a long-term game requiring immense financial resources) and resultant heavy working-capital/capex requirements which have been internally funded and/or by new paid-up capital/equity. While avoiding overleveraging itself at the onset, this has also meant the company has diluted discretionary cashflow to itself, creating liquidity pressure and weakening debt-servicing.
In this note, we explore some of the causes of the weakness in the company’s credit to determine whether there are any real short-term liquidity issues, and at the same time decipher the steps required to stabilize the credit in the medium-to-long term.

Lippo Karawaci: Buying Time To Avert Distress

Indonesia

PT Lippo Cikarang Tbk operates in the industrial and real estate development activities.  Through its subsidiaries, the Company also provides public transportation and recreational services.

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Pt Lippo Cikarang (LPCK IJ)

Lippo Mall REIT (LMRT): Q2 2018 Result And Local Perspective of Malls

Q2 2018 gross revenue by 15.9% Y-o-Y and net property income grew by 1.3%. Similarly, 1H 2018 gross revenue grew by 13.2% and net property income...

Henry Soediarko

Lippo Karawaci: Buying Time To Avert Distress

We initiate our coverage on Lippo Karawaci Tbk Pt (LPKR IJ) (“LK”) with a NEUTRAL recommendation on the LPKRIJ complex and a tactical OVERWEIGHT...

Bondcritic

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