Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

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

Equity Bottom-Up

Rex International Holding / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> will report results around 25/2/2022; we expect a major 2H21 performance inflection as the Norwegian Brage field cash flow is included from 01/01/2021.</li>
<li>According to a press release on 13/1/22 the company is actively applying to uplist from Catalist to the mainboard. We see no reason why SGX should not grant this application.</li>
<li>Rex's Oman production has disappointed in 4Q21 but cash flow-wise shortfall should be made up by higher oil prices and Brage. Maiden dividend announcement should be forthcoming.</li>
</ul>



Rex International Holding (REXI SP) will report results around 25/2/2022; we expect a major 2H21 performance inflection as the Norwegian Brage field cash flow is included from 01/01/2021.
According to a press release on 13/1/22 the company is actively applying to uplist from Catalist to the mainboard. We see no reason why SGX should not grant this application.
Rex's Oman production has disappointed in 4Q21 but cash flow-wise shortfall should be made up by higher oil prices and Brage. Maiden dividend announcement should be forthcoming.


Preview Rex International FY21 Results: Prime Beneficiary Of Rising Oil Price

Thematic (Sector/Industry)

<ul>
<li>2021's vintage of my 5 High Convictions Ideas did extremely well</li>
<li>
<a href="https://www.smartkarma.com/entities/pc-partner-group-ltd" target="_blank" data-smartkarma-citation="entities:8492:1" rel="noopener">PC Partner (1263 HK)</a> was up 543%, <a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> was up 80%, <a href="https://www.smartkarma.com/entities/straits-trading-co-ltd" target="_blank" data-smartkarma-citation="entities:15745:1" rel="noopener">Straits Trading (STRTR SP)</a> was up almost 74% and Shougang Fushan just under 40%.</li>
<li>The underperformer award goes to HK restaurant operator <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet Group Ltd (8371 HK)</a> as it declined 25%. Below the fold we'll give our 5 High Conviction Ideas for 2022.</li>
</ul>


2021's vintage of my 5 High Convictions Ideas did extremely well

PC Partner (1263 HK) was up 543%, Rex International Holding (REXI SP) was up 80%, Straits Trading (STRTR SP) was up almost 74% and Shougang Fushan just under 40%.
The underperformer award goes to HK restaurant operator Taste Gourmet Group Ltd (8371 HK) as it declined 25%. Below the fold we'll give our 5 High Conviction Ideas for 2022.


Overview of My Winners and Losers in 2021... And 5 High Conviction Ideas Going Into 2022

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

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

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

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

Technical Analysis

AngloGold Ashanti Spon Adr / Technical Analysis

<ul>
<li>We continue to see more global indexes/Sectors breaking out to new highs, with the latest being the MSCI Emerging Markets index (local currency), breaking out from a 2-year base--add exposure.</li>
<li>In terms of MSCI EM specifically, this is a huge risk-on signal for global equities, as EM is pretty much as risky as it gets across the global landscape.</li>
<li>Our bullish outlook (since early November 2023) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.</li>
</ul>


We continue to see more global indexes/Sectors breaking out to new highs, with the latest being the MSCI Emerging Markets index (local currency), breaking out from a 2-year base--add exposure.
In terms of MSCI EM specifically, this is a huge risk-on signal for global equities, as EM is pretty much as risky as it gets across the global landscape.
Our bullish outlook (since early November 2023) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.


MSCI Emerging Markets Finally Join the Rally; China/HK Improve; Upgrading Taiwan, Downgrading Brazil

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Naturgy Energy Group SA / Equity Bottom-Up

<ul>
<li>S&amp;P has raised <a href="https://www.smartkarma.com/entities/naturgy-energy-group-sa" target="_blank" data-smartkarma-citation="entities:21271:1" rel="noopener">Naturgy Energy Group SA (NTGY SM)</a>'s credit outlook from negative to stable considering that the company may not finally carry out the Gemini spin-off project.</li>
<li>Naturgy's shares do not trade on fundamentals, rather on expectations that IFM tries to increase its stake (free float is just 15%). There's some potential overhang risk though.</li>
<li>IFM has not acquired any significant stake since April, but I would not short the shares as IFM could resume share purchases on an opportunistic basis.</li>
</ul>


S&amp;P has raised Naturgy Energy Group SA (NTGY SM)'s credit outlook from negative to stable considering that the company may not finally carry out the Gemini spin-off project.
Naturgy's shares do not trade on fundamentals, rather on expectations that IFM tries to increase its stake (free float is just 15%). There's some potential overhang risk though.
IFM has not acquired any significant stake since April, but I would not short the shares as IFM could resume share purchases on an opportunistic basis.


Event-Driven

<ul>
<li>The $19bn EV operation (vs. Repsol's market cap of €19bn) allows Repsol to maintain the majority in a strategic area, crystallizes value (market assigns a higher valuation to the E&amp;P division separately).</li>
<li>The implied valuation by the market is on average $3 billion lower. As usual with a minority stake sale, the market rarely values it at 100%. </li>
<li>I estimate a moderate positive impact (the deal is similar to what was announced in July), value unlocking could theoretically reach €2.5-€3 per share, but I'd take a neutral stance.</li>
</ul>


The $19bn EV operation (vs. Repsol's market cap of €19bn) allows Repsol to maintain the majority in a strategic area, crystallizes value (market assigns a higher valuation to the E&amp;P division separately).
The implied valuation by the market is on average $3 billion lower. As usual with a minority stake sale, the market rarely values it at 100%. 
I estimate a moderate positive impact (the deal is similar to what was announced in July), value unlocking could theoretically reach €2.5-€3 per share, but I'd take a neutral stance.


Spain

Repsol S.A., through subsidiaries, explores for and produces crude oil and natural gas, refines petroleum, and transports petroleum products and liquefied petroleum gas (LPG).  The Company retails gasoline and other products through its chain of gasoline filling stations.  Repsol's petroleum reserves are in Spain, Latin America, Asia, North Africa, and the Middle East and United States.

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Repsol SA (REP SM)

Preview Rex International FY21 Results: Prime Beneficiary Of Rising Oil Price

Rex will report FY21 results in late February. We expect results to be a major wake-up call to investors as the Norwegian Brage field cash flows...

Nicolas Van Broekhoven

Overview of My Winners and Losers in 2021... And 5 High Conviction Ideas Going Into 2022

2021's vintage of 5 High Conviction Ideas did extremely well led by star performer Pc Partner. Our new selection for 2022 will hopefully have some...

Nicolas Van Broekhoven

MSCI Emerging Markets Finally Join the Rally; China/HK Improve; Upgrading Taiwan, Downgrading Brazil

MSCI EM Finally Joins the Rally; China/Hong Kong Continue to Improve; Downgrading Brazil to Market Weight; Upgrading Taiwan to Overweight;...

Vermilion Research

Gemini Postponed Sine Die

Standard & Poor's has raised Naturgy's credit outlook from negative to stable given the possibility that the company will not finally carry out the...

Jesus Rodriguez Aguilar

Repsol: Sale of 25% of E&P Division

The $19bn EV operation (vs. Repsol's market cap of €19bn) allows Repsol to maintain the majority in a strategic area, crystallizes value (market...

Jesus Rodriguez Aguilar

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