Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<p>Fifty four weeks ago, <strong><a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a></strong> announced a gloriously messy recapitalization plan for sembcorp marine, and a de-merger between the two, discussed in <a href="https://www.smartkarma.com/insights/sembcorp-marine-and-sci-a-gloriously-messy-recap-and-de-merger-big-win-for-sci" target="_blank" data-smartkarma-citation="insights:40153" rel="noopener">SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI</a>. <strong>sembcorp marine</strong> conducted a large rights offering to raise money to repay a subordinated loan that its then-parent had provided. <strong>Temasek</strong> backstopped the rights offering. Then <strong>SCI</strong> spun off <strong>SMM</strong> to its shareholders.</p><p>This was, in effect, a transfer of indirect ownership of <strong>SMM</strong> by <strong>Temasek</strong> to direct ownership to <strong>Temasek</strong>.  <strong>SMM</strong> had been cast away, discussed in <a href="https://www.smartkarma.com/insights/sembcorp-marine-rights-offer-cast-away" target="_blank" data-smartkarma-citation="insights:40164" rel="noopener">Sembcorp Marine Rights Offer - Cast Away</a>. </p><p>At the time, I said the only good trade was <strong>SCI</strong>. It has more than doubled since. <strong>SMM</strong> would have been a great short at the time, but there was almost no stock borrow. It fell, it has bounced back to close to its rights offering price of S$0.20/share. </p><p>At the time, <strong><a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a></strong> was itself undergoing a possible partial tender offer by Temasek - also discussed heavily on Smartkarma <a href="https://www.smartkarma.com/entities/keppel-corp-ltd/insights" target="_blank" rel="noopener">here</a>. That deal ended up failing two months later because of a MAC on NAV triggered by a writedown. That writedown which lowered the NAV was in the rig/O&amp;M space. </p><p>At the time, of last year's <strong>SMM</strong> rights offering, I wrote:</p><blockquote><p>The relatively common refrain on the Street (and indeed in my insights on the <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> Partial Tender Offer) has been the thought that at some point, Temasek would need to sort out the two O&amp;M businesses because Singapore probably doesn't need two unhealthy majors under Temasek influence. An eventual merger between SCM and Keppel O&amp;M has clearly been in people's thoughts. </p></blockquote><h2>The NEW News</h2><p>Pre-open on the 24th of June, <strong><a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a></strong> were halted pending release of an announcement, which the news had later in the day as being a possible  merger between SMM and Keppel's O&amp;M business. </p><p>Last night, <strong>sembcorp marine</strong> announced the <a href="https://links.sgx.com/FileOpen/Launch%20Announcement.ashx?App=Announcement&amp;FileID=672228" target="_blank" rel="noopener">launch</a> with a 20-page <a href="https://links.sgx.com/FileOpen/Presentation.ashx?App=Announcement&amp;FileID=672230" target="_blank" rel="noopener">presentation</a> extolling the virtues and necessity of the rights issue. This was accompanied by a <a href="https://links.sgx.com/FileOpen/Trading%20and%20Liquidity%20Update.ashx?App=Announcement&amp;FileID=672231" target="_blank" rel="noopener">Trading &amp; Liquidity Update</a> which discussed order delays, and difficulty in sourcing workers during the covid mitigation efforts in Singapore. The section on Liquidity and Cash Management tells it like it is.</p><blockquote>
<p>The delays in construction progress and project completion have resulted in lower operating cash inflows. The deferred payment arrangements under the Transocean Amendment Agreements have also resulted in reduced cash collections in the near term. Conversely, project payables have increased due to the increased labour and other related costs to complete projects.</p>
<p>...</p>
<p>The Group will have to identify potential sources of capital to support and strengthen its liquidity and financial position.</p>
</blockquote><p><strong>sembcorp marine</strong> and <strong>Keppel Corp</strong> also <a href="https://www.sembmarine.com/stock-exchange-announcements/keppel-corporation-and-sembcorp-marine-commence-talks-on-potential-combination-of-keppel-om-and-sembcorp-marine-to-create-stronger-player-and-accelerate-pivot-to-the-energy-transition" target="_blank" rel="noopener">announced</a> they were to <em>"Commence Talks on Potential Combination of Keppel O&amp;M and Sembcorp Marine, to Create Stronger Player and Accelerate Pivot to the Energy Transition."</em></p><p style="padding-left: 25px;"><em>The "energy transition" concept has been prominent in the commentary from management from both companies. fossil fuel exploration drove the growth of SMM and Keppel O&amp;M. Now that is being replaced by cleaner energy sources both for green reasons and that it is cheaper. That means the support businesses differ. Keppel has installed large floating PV farms as part of its generation infrastructure business, and has looked at more offshore wind farms and the changing needs of OSVs for such renewable energy businesses. It clearly makes sense to pivot. </em></p><p>However, that brief explanation of an MOU between the two companies to negotiate exclusively is DEFINITELY worth a read - mostly because of the non-business aspects.  </p><p>The whole situation deserves some attention, but the trades are obvious.</p><p>SMM is struggling. It needs cash. It will dilute existing holders via a 3:2 rights offering at S$0.08/share which will lead NTA to S$0.154 and TERP at S$0.1244. The offering is fully backstopped - two thirds by Temasek and one third by DBS - but I expect this to trade to TERP and lower. Borrow will be an issue.</p><p>More below the fold. </p>

Fifty four weeks ago, Sembcorp Industries (SCI SP) and Sembcorp Marine (SMM SP) announced a gloriously messy recapitalization plan for sembcorp marine, and a de-merger between the two, discussed in SembCorp Marine and SCI - A Gloriously Messy Recap and De-Merger - Big Win for SCI. sembcorp marine conducted a large rights offering to raise money to repay a subordinated loan that its then-parent had provided. Temasek backstopped the rights offering. Then SCI spun off SMM to its shareholders.This was, in effect, a transfer of indirect ownership of SMM by Temasek to direct ownership to Temasek.  SMM had been cast away, discussed in Sembcorp Marine Rights Offer - Cast Away. At the time, I said the only good trade was SCI. It has more than doubled since. SMM would have been a great short at the time, but there was almost no stock borrow. It fell, it has bounced back to close to its rights offering price of S$0.20/share. At the time, Keppel Corp (KEP SP) was itself undergoing a possible partial tender offer by Temasek - also discussed heavily on Smartkarma here. That deal ended up failing two months later because of a MAC on NAV triggered by a writedown. That writedown which lowered the NAV was in the rig/O&amp;M space. At the time, of last year's SMM rights offering, I wrote:The relatively common refrain on the Street (and indeed in my insights on the Keppel Corp Ltd (KEP SP) Partial Tender Offer) has been the thought that at some point, Temasek would need to sort out the two O&amp;M businesses because Singapore probably doesn't need two unhealthy majors under Temasek influence. An eventual merger between SCM and Keppel O&amp;M has clearly been in people's thoughts. The NEW NewsPre-open on the 24th of June, Sembcorp Marine (SMM SP) and Keppel Corp (KEP SP) were halted pending release of an announcement, which the news had later in the day as being a possible  merger between SMM and Keppel's O&amp;M business. Last night, sembcorp marine announced the launch with a 20-page presentation extolling the virtues and necessity of the rights issue. This was accompanied by a Trading &amp; Liquidity Update which discussed order delays, and difficulty in sourcing workers during the covid mitigation efforts in Singapore. The section on Liquidity and Cash Management tells it like it is.
The delays in construction progress and project completion have resulted in lower operating cash inflows. The deferred payment arrangements under the Transocean Amendment Agreements have also resulted in reduced cash collections in the near term. Conversely, project payables have increased due to the increased labour and other related costs to complete projects.
...
The Group will have to identify potential sources of capital to support and strengthen its liquidity and financial position.
sembcorp marine and Keppel Corp also announced they were to "Commence Talks on Potential Combination of Keppel O&amp;M and Sembcorp Marine, to Create Stronger Player and Accelerate Pivot to the Energy Transition."The "energy transition" concept has been prominent in the commentary from management from both companies. fossil fuel exploration drove the growth of SMM and Keppel O&amp;M. Now that is being replaced by cleaner energy sources both for green reasons and that it is cheaper. That means the support businesses differ. Keppel has installed large floating PV farms as part of its generation infrastructure business, and has looked at more offshore wind farms and the changing needs of OSVs for such renewable energy businesses. It clearly makes sense to pivot. However, that brief explanation of an MOU between the two companies to negotiate exclusively is DEFINITELY worth a read - mostly because of the non-business aspects.  The whole situation deserves some attention, but the trades are obvious.SMM is struggling. It needs cash. It will dilute existing holders via a 3:2 rights offering at S$0.08/share which will lead NTA to S$0.154 and TERP at S$0.1244. The offering is fully backstopped - two thirds by Temasek and one third by DBS - but I expect this to trade to TERP and lower. Borrow will be an issue.More below the fold. 

Sembcorp Marine Bites the Bullet - Big Rights Offering - And May Combine with Keppel O&M

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Less that a year after a massive rights issue, <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> has announced a big rights issue to strengthen its financial position and accelerate its pivot towards renewable and clean energy.</p><p>The recapitalisation will be done via a 3:2 renounceable rights issue at a price of S$0.08/share, representing a 58.12% discount to the last close and a 35.69% discount to the Theoretical Ex-Rights Price (TERP).</p><p>Temasek (via Startree Investments) has committed to subscribe to its 42.6% entitlement and will underwrite part of the excess rights so that its total subscription will not exceed 67% of the rights issue. <a href="https://www.smartkarma.com/entities/dbs-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22:1" rel="noopener">DBS (DBS SP)</a> is underwriting the remaining 33% of the rights issue.</p><p><a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> and <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> have also commenced talks on a potential combination of Keppel O&amp;M and SMM to create a stronger player and to accelerate the pivot to energy transition.</p><p>We expect <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> shares to open lower and possibly trade lower in the near-term. The stock trades at high valuations and shareholders looking at the longer term price charts have a right to be wary.</p><h3>Links</h3><table class="table table-striped"><tbody>
<tr>
<td style="width: 50%;">Detail</td>
<td style="width: 50%;">Link</td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Press Release</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Press%20Release.ashx?App=Announcement&amp;FileID=672241" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Announcement</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Launch%20Announcement.ashx?App=Announcement&amp;FileID=672228" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Media Release</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Media%20Release.ashx?App=Announcement&amp;FileID=672229" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Presentation</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Presentation.ashx?App=Announcement&amp;FileID=672230" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">SMM SP Trading &amp; Liquidity Update</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/Trading%20and%20Liquidity%20Update.ashx?App=Announcement&amp;FileID=672231" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">KEP SP Media Release</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/MREL_KCL%20Announcement%20-%2024%20Jun%202021.ashx?App=Announcement&amp;FileID=672253" target="_blank" rel="noopener">Link</a></td>
</tr>
<tr>
<td style="width: 50%;">KEP SP Media &amp; Analyst Briefing</td>
<td style="width: 50%;"><a href="https://links.sgx.com/FileOpen/TRSCR_%20KCL%20Briefing%20to%20Media%20and%20Analysts%20-Transcript.ashx?App=Announcement&amp;FileID=672341" target="_blank" rel="noopener">Link</a></td>
</tr>
</tbody></table>

Less that a year after a massive rights issue, Sembcorp Marine (SMM SP) has announced a big rights issue to strengthen its financial position and accelerate its pivot towards renewable and clean energy.The recapitalisation will be done via a 3:2 renounceable rights issue at a price of S$0.08/share, representing a 58.12% discount to the last close and a 35.69% discount to the Theoretical Ex-Rights Price (TERP).Temasek (via Startree Investments) has committed to subscribe to its 42.6% entitlement and will underwrite part of the excess rights so that its total subscription will not exceed 67% of the rights issue. DBS (DBS SP) is underwriting the remaining 33% of the rights issue.Sembcorp Marine (SMM SP) and Keppel Corp (KEP SP) have also commenced talks on a potential combination of Keppel O&amp;M and SMM to create a stronger player and to accelerate the pivot to energy transition.We expect Sembcorp Marine (SMM SP) shares to open lower and possibly trade lower in the near-term. The stock trades at high valuations and shareholders looking at the longer term price charts have a right to be wary.Links

Detail
Link


SMM SP Press Release
Link


SMM SP Announcement
Link


SMM SP Media Release
Link


SMM SP Presentation
Link


SMM SP Trading &amp; Liquidity Update
Link


KEP SP Media Release
Link


KEP SP Media &amp; Analyst Briefing
Link



Sembcorp Marine: BIG Rights Issue & Potential Combination with Keppel O&M

David Blennerhassett

<div>
<p>This week in StubWorld ...</p>
</div>
<div>
<div>
<div class="content-highlight">
<p>Following the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">no-objection notice</a> from the SGX on the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">4 February</a> concerning its BeerCo IPO, <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> announced that the SGX has <a href="https://links.sgx.com/FileOpen/TB_Annoucement_Conditional_ETL_for_BeerCo.ashx?App=Announcement&amp;FileID=654525" target="_blank" rel="noopener">issued</a> its conditional eligibility-to-list letter for the potential listing.  </p>
</div>
</div>
</div>
<div>
<p>Preceding my comments on ThaiBev are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


This week in StubWorld ...




Following the no-objection notice from the SGX on the 4 February concerning its BeerCo IPO, Thai Beverage (THBEV SP) announced that the SGX has issued its conditional eligibility-to-list letter for the potential listing.  




Preceding my comments on ThaiBev are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: ThaiBev’s BeerCo Spin-Off One Step Closer

<div>
<p>This week in StubWorld ...</p>
</div>
<div>
<div>
<div class="content-highlight">
<p>Following the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">no-objection notice</a> from the SGX concerning its BeerCo IPO, the key focus will be on the appropriate discount <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> will trade to the spun-off entity, and in turn, BeerCo's discount to 53.5%-held <a href="https://www.smartkarma.com/entities/saigon-beer-alcohol-beverage" target="_blank" data-smartkarma-citation="entities:23645:1" rel="noopener">Saigon Beer Alcohol Beverage (SAB VN)</a>. </p>
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<p>Preceding my comments on ThaiBev <em>and </em><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


This week in StubWorld ...




Following the no-objection notice from the SGX concerning its BeerCo IPO, the key focus will be on the appropriate discount Thai Beverage (THBEV SP) will trade to the spun-off entity, and in turn, BeerCo's discount to 53.5%-held Saigon Beer Alcohol Beverage (SAB VN). 




Preceding my comments on ThaiBev and PCCW Ltd (8 HK) are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: Double Stub Via ThaiBev's BeerCo IPO

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>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

Singapore

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

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Seatrium (STM SP)

Sembcorp Marine Bites the Bullet - Big Rights Offering - And May Combine with Keppel O&M

SMM did a disastrous rights offering last year - an equity/debt swap. Now they do a REAL ONE to raise more money. There is nothing good here near...

Travis Lundy

Sembcorp Marine: BIG Rights Issue & Potential Combination with Keppel O&M

A big rights issue of S$1.5bn from SMM SP could see the stock trade lower. A potential merger with Keppel O&M could provide a bright spot....

Brian Freitas

StubWorld: ThaiBev’s BeerCo Spin-Off One Step Closer

I see perhaps 12% upside from here if assuming a 25% discount to NAV. Given its growth potential, investors may switch out of ThaiBev into BeerCo....

David Blennerhassett

StubWorld: Double Stub Via ThaiBev's BeerCo IPO

I estimate minimal upside for ThaiBev here if assuming a 25% discount to NAV. ThaiBev is trading at 16.5x trailing EV/EBITDA, but its forward EV...

David Blennerhassett

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

The NEW Week that Was in ASEAN@Smartkarma includes a curation of the past week's insights across SE Asia together with value-added commentary on...

Angus Mackintosh

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