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

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> is the leading diagnostic lab and clinic operator in Indonesia, providing a wide range of testing services both for individuals, as well as doctor referrals and hospitals. It stands out as the only diagnostic company in Indonesia to have College of American Physicians (CAP) accreditation.
The company is heavily involved in COVID-19 testing with around 4-5% of revenues now coming from PCR tests but this has not been enough to offset the downturn in patient numbers, especially for walk-in customers. This does seem to be changing and we expect a pick up in patient numbers in 3Q2020.
Corporate health check-ups have also been delayed with most of the testing taking place for corporates for COVID-19.  This may take more time to recover according to management. 
June and July have seen customers start to come back with traffic better and revenue per patient has picking up from the average in 1H2020 at IDR679,000 per visit. 
<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> is also increasingly focused on developing digital and online channels and provides a variety of services through its Prodia App.
<div class="content-highlight">
<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> looks attractive from a valuation perspective, trading on 5.8x FY21E  versus its 5-year average of 8.0x forward EV/EBITDA, especially with the prospect of an ongoing recovery over the next few quarters. Healthcare and especially rising demand for preventative medicine plays into the company's strengths. 
</div>

Prodia Widyahusada (PRDA IJ) is the leading diagnostic lab and clinic operator in Indonesia, providing a wide range of testing services both for individuals, as well as doctor referrals and hospitals. It stands out as the only diagnostic company in Indonesia to have College of American Physicians (CAP) accreditation.
The company is heavily involved in COVID-19 testing with around 4-5% of revenues now coming from PCR tests but this has not been enough to offset the downturn in patient numbers, especially for walk-in customers. This does seem to be changing and we expect a pick up in patient numbers in 3Q2020.
Corporate health check-ups have also been delayed with most of the testing taking place for corporates for COVID-19.  This may take more time to recover according to management. 
June and July have seen customers start to come back with traffic better and revenue per patient has picking up from the average in 1H2020 at IDR679,000 per visit. 
Prodia Widyahusada (PRDA IJ) is also increasingly focused on developing digital and online channels and provides a variety of services through its Prodia App.

Prodia Widyahusada (PRDA IJ) looks attractive from a valuation perspective, trading on 5.8x FY21E  versus its 5-year average of 8.0x forward EV/EBITDA, especially with the prospect of an ongoing recovery over the next few quarters. Healthcare and especially rising demand for preventative medicine plays into the company's strengths. 


Prodia Widyahusada (PRDA IJ) - Keeping Indonesia Diagnosed and Healthy

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

<a href="https://www.smartkarma.com/entities/kimia-farma-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:8524:1" rel="noopener">Kimia Farma Persero (KAEF IJ)</a> share price astronomic rise has benefited from the COVID-19 panic reaction and its position of being the government distributor for surgical masks throughout the country. Investors were expecting that the surgical masks to be sold at a premium price but the reality is the government instructed the company to sell at Rp 100,000 per box, instead of the overhyped price at Rp 500,000 to 850,000 previously. 
Since its lows (Rp 600) on the 19th of March 2020, the share price has increased by 458% when it reached its high of Rp 3,350. After a couple of days of profit-taking, investors who bought at Rp 600 still made 3x at today's close price. 
At the beginning of the pandemic, people made their own masks from cloth. As surgical masks' availability has improved, some people still like cloth-based masks although clearly, this is not as effective as surgical masks. <a href="https://www.smartkarma.com/entities/sri-rejeki-isman-tbk-pt" target="_blank" data-smartkarma-citation="entities:20178:1" rel="noopener">Sri Rejeki Isman (SRIL IJ)</a> launched non-surgical but anti-microbial and water-resistant masks based on their own technology with a history of manufacturing army uniform with the same functionalities that I discussed in <a href="https://www.smartkarma.com/insights/sritex-sril-undervalued-with-more-products-and-b2c" target="_blank" data-smartkarma-citation="insights:43490" rel="noopener">Sritex (SRIL): Undervalued with More Products and B2C</a> .
The most expensive stock in LQ45, <a href="https://www.smartkarma.com/entities/perusahaan-gas-negara-perser" target="_blank" data-smartkarma-citation="entities:1584:1" rel="noopener">Perusahaan Gas Negara Perser (PGAS IJ)</a> , is trading at 81x PER so Kimia Farma is really expensive at 190x PER on the back of the surgical mask distributors across Indonesia although the margin is very questionable given the market price for surgical masks have plummeted. 
For existing shareholder - it is really time to get out before the stock price plummets
For long-short investors - the stock is worth shorting for short term gains if there is borrow. Given the small market capitalization, borrow may be tough but the liquidity has improved (USD 5 million ADTV) thus there is a chance for borrow availability.

Kimia Farma Persero (KAEF IJ) share price astronomic rise has benefited from the COVID-19 panic reaction and its position of being the government distributor for surgical masks throughout the country. Investors were expecting that the surgical masks to be sold at a premium price but the reality is the government instructed the company to sell at Rp 100,000 per box, instead of the overhyped price at Rp 500,000 to 850,000 previously. 
Since its lows (Rp 600) on the 19th of March 2020, the share price has increased by 458% when it reached its high of Rp 3,350. After a couple of days of profit-taking, investors who bought at Rp 600 still made 3x at today's close price. 
At the beginning of the pandemic, people made their own masks from cloth. As surgical masks' availability has improved, some people still like cloth-based masks although clearly, this is not as effective as surgical masks. Sri Rejeki Isman (SRIL IJ) launched non-surgical but anti-microbial and water-resistant masks based on their own technology with a history of manufacturing army uniform with the same functionalities that I discussed in Sritex (SRIL): Undervalued with More Products and B2C .
The most expensive stock in LQ45, Perusahaan Gas Negara Perser (PGAS IJ) , is trading at 81x PER so Kimia Farma is really expensive at 190x PER on the back of the surgical mask distributors across Indonesia although the margin is very questionable given the market price for surgical masks have plummeted. 
For existing shareholder - it is really time to get out before the stock price plummets
For long-short investors - the stock is worth shorting for short term gains if there is borrow. Given the small market capitalization, borrow may be tough but the liquidity has improved (USD 5 million ADTV) thus there is a chance for borrow availability. 

Kimia Farma (KAEF): National Service Is Charity

Expand when your peers retreat. That is what <a href="https://www.smartkarma.com/entities/sri-rejeki-isman-tbk-pt" target="_blank" data-smartkarma-citation="entities:20178:1" rel="noopener">Sri Rejeki Isman (SRIL IJ)</a> management has done in this COVID-19 period. It has launched more products from daily wear to COVID-19 related products such as non-medical masks (B2C) and PPE (B2B). It has won a mandate to become a PPE supplier to chain hospitals such as <a href="https://www.smartkarma.com/entities/siloam-international-hospital" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospital (SILO IJ)</a> and <a href="https://www.smartkarma.com/entities/mitra-keluarga-karyasehat-tbk" target="_blank" data-smartkarma-citation="entities:288:1" rel="noopener">Mitra Keluarga Karyasehat Tbk (MIKA IJ)</a> .
Among LQ45 constituents, Sritex has the lowest PER while other COVID-19 related stocks such as <a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma (KLBF IJ)</a> and <a href="https://www.smartkarma.com/entities/mitra-keluarga-karyasehat-tbk" target="_blank" data-smartkarma-citation="entities:288:1" rel="noopener">Mitra Keluarga Karyasehat Tbk (MIKA IJ)</a> trade at 27x and 50x PER respectively. Compared to other PPE and gloves manufacturers in Malaysia such as <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a> and <a href="https://www.smartkarma.com/entities/hartalega-holdings-bhd" target="_blank" data-smartkarma-citation="entities:10230:1" rel="noopener">Hartalega Holdings (HART MK)</a> , Sritex is trading at a deep discount.

Expand when your peers retreat. That is what Sri Rejeki Isman (SRIL IJ) management has done in this COVID-19 period. It has launched more products from daily wear to COVID-19 related products such as non-medical masks (B2C) and PPE (B2B). It has won a mandate to become a PPE supplier to chain hospitals such as Siloam International Hospital (SILO IJ) and Mitra Keluarga Karyasehat Tbk (MIKA IJ) .
Among LQ45 constituents, Sritex has the lowest PER while other COVID-19 related stocks such as Kalbe Farma (KLBF IJ) and Mitra Keluarga Karyasehat Tbk (MIKA IJ) trade at 27x and 50x PER respectively. Compared to other PPE and gloves manufacturers in Malaysia such as Top Glove Corp (TOPG MK) and Hartalega Holdings (HART MK) , Sritex is trading at a deep discount. 

Sritex (SRIL): Undervalued with More Products and B2C

Mitra Keluarga Karyasehat Tbk / Equity Bottom-Up

The finding of the COVID-19 vaccine is not a risk to the company's expanding EBITDA margin (from 35% to between 45-50%) as the demand for COVID-19 specific testing and medical service will continue for a few years longer. The Ministry of Health capped the price but it is still at a premium compared to the non-COVID-19 service rate. 
Trading at a 15% PER premium to the domestic peers, the company is valued at a 39% EV/EBITDA discount to the regional peers (thus it is still favorable to ASEAN investors) despite being the most profitable and pristine balance sheet. BUY.

The finding of the COVID-19 vaccine is not a risk to the company's expanding EBITDA margin (from 35% to between 45-50%) as the demand for COVID-19 specific testing and medical service will continue for a few years longer. The Ministry of Health capped the price but it is still at a premium compared to the non-COVID-19 service rate. 
Trading at a 15% PER premium to the domestic peers, the company is valued at a 39% EV/EBITDA discount to the regional peers (thus it is still favorable to ASEAN investors) despite being the most profitable and pristine balance sheet. BUY.

Mitra Keluarga (MIKA): Margin Expansion from COVID-19

Thematic (Sector/Industry)

The latest report from AC Niesen Indonesia is entitled "Meet the new consumer" and looks into the changing behaviour of Indonesia's consumers in the face of the COVID-19 pandemic. 
These changes will have a pronounced impact on the retail landscape in Indonesia and the way that the population consumes, with a lot more already going online and much more focus on health with more financial restraint. 
A number of consumer behaviours developed during the pandemic will stick as we enter the new normal period, with 16% of those surveyed by AC Nielsen suggesting they will not visit the mall even under the new normal. 
We remain positive on consumer staples and healthcare stocks including <a href="https://www.smartkarma.com/entities/unilever-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:231:1" rel="noopener">Unilever Indonesia (UNVR IJ),</a><a href="https://www.smartkarma.com/entities/indofood-cbp-sukses-makmur-tbk" target="_blank" data-smartkarma-citation="entities:17651:1" rel="noopener">Indofood CBP Sukses (ICBP IJ),</a> <a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma (KLBF IJ),</a><a href="https://www.smartkarma.com/entities/mitra-keluarga-karyasehat-tbk" target="_blank" data-smartkarma-citation="entities:288:1" rel="noopener">Mitra Keluarga Karyasehat Tbk (MIKA IJ)</a> and consumer discretionary name <a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> for the recovery.

The latest report from AC Niesen Indonesia is entitled "Meet the new consumer" and looks into the changing behaviour of Indonesia's consumers in the face of the COVID-19 pandemic. 
These changes will have a pronounced impact on the retail landscape in Indonesia and the way that the population consumes, with a lot more already going online and much more focus on health with more financial restraint. 
A number of consumer behaviours developed during the pandemic will stick as we enter the new normal period, with 16% of those surveyed by AC Nielsen suggesting they will not visit the mall even under the new normal. 
We remain positive on consumer staples and healthcare stocks including Unilever Indonesia (UNVR IJ),Indofood CBP Sukses (ICBP IJ), Kalbe Farma (KLBF IJ),Mitra Keluarga Karyasehat Tbk (MIKA IJ) and consumer discretionary name Mitra Adiperkasa (MAPI IJ) for the recovery. 

Indonesian Consumers - This Transformation Is Forever - BUY Staples and Healthcare

Indonesia

Mitra Keluarga Karyasehat Tbk PT engages in hospital management and business services. The Company operates hospitals located in the Greater Jakarta Area, Surabaya and Tegal.

PT Sejahteraraya Anugrahjaya Tbk operates hospitals.

PT Medikaloka Hermina Tbk owns and operates a chain of hospitals. The Hospital provides professional healthcare services, as well as focuses on obstetric and pediatric care. Medikaloka Hermina also offers consulting services. Medikaloka Hermina serves patients in Indonesia.

PT Enseval Putera Megatrading Tbk distributes pharmaceutical products, consumer goods, and hospital supplies and equipment.  The Company also markets and sells chemical products as raw material for the pharmaceutical, cosmetics, and food industries.

PT Sarana Meditama Metropolitan Tbk owns and manages hospitals in Indonesia.

PT Prodia Widyahusada provides health care testing services. The Company provides analytic and diagnostic services for the medical professionals. Prodia Widyahusada serves customers in Indonesia.

PT Millennium Pharmacon International Tbk distributes pharmaceutical, food supplements and consumer products.

Millennium Pharmacon Internationl (SDPC IJ)

PT Royal Prima Tbk provides hospital services. The Company offers treatment for orthopedics, urology, oncology, digestive surgery, psychiatric, cardiovascular, hypertension, and metabolic diabetes treatment services. Royal Prima serves patients in Indonesia.

PT Tempo Scan Pacific Tbk manufactures and distributes pharmaceutical , health care and cosmetic products. The Company offers a variety of products including prescription drugs, specialty care products, and home care consumer products.

Kimia Farma (Persero) Tbk manufactures, distributes, and sells pharmaceutical, chemical, biological, and other materials for use of manufacturing of contraceptives, cosmetics, medical equipment, medicines, and food and beverages. The Company also produces packing material, machinery, equipment, and supporting facilities related to pharmaceuticals as well as operates pharmacies.

National Healthcare Corporation operates long-term health care centers.  The Company also operates homecare programs, independent living centers, and assisted living centers.  National Healthcare's other services include managed care specialty medical units, Alzheimer's units, and a rehabilitation services company.

Premier Inc. provides health care services. The Company offers clinical and financial database, peers, food and drug administration, drug surveillance, pharmacy, health insurance, and healthcare consultancy.

AMN Healthcare Services, Inc., a temporary healthcare staffing company, provides travel nurse staffing services. The Company places nurses and allied health professionals on temporary assignments at hospitals and healthcare facilities throughout the United States.

Addus HomeCare Corp provides a broad range of social and medical services in the home.  The Company's services include personal care and assistance with activities of daily living, skilled nursing and rehabilitative therapies, and adult day care. Addus consumers are individuals with special needs who are at risk of hospitalization or institutionalization.

Generale de Sante operates private hospitals.  The Company operates hospitals in France, Italy, Portugal, and Canada.

Orpea operates nursing homes.  The Company serves older clients in all stages of dependency through its facilities located throughout France.

Aster DM Healthcare Limited provides health care services. The Company offers cardiology, cardiac and spine surgery, oncology, orthopedics, neurology and urology, oncology, gastroenterology and hepatology services. Aster DM Healthcare serves patients worldwide.

Al Hammadi Development and Investment Co. owns, operates and manages hospitals.

Al Hammadi Development And I (ALHAMMAD AB)

KPJ Healthcare Berhad is an investment holding company. Through its subsidiaries, the Company operates specialist medical centers and also provides pathology and laboratory services, hospital management services, drug and medical distribution along with operating a nursing college.

Raffles Medical Group Limited is a health care provider.  The Company operates medical clinics, imaging centers, and medical laboratories.  Raffles provides general and specialized medical, medical evacuation, medical advisory, and dental treatment services.

PT Siloam International Hospitals Tbk owns and operates hospitals. The Company offers a comprehensive range of specialist medical services including laboratory services, radiology, imaging and complex surgical procedures. Siloam International operates its hospitals throughout Indonesia.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Siloam International Hospitals (SILO IJ)

Prodia Widyahusada (PRDA IJ) - Keeping Indonesia Diagnosed and Healthy

Prodia is a high-quality proxy for the recovery in demand for diagnostic testing in Indonesia, as well as for increasing health-consciousness.

Angus Mackintosh

Kimia Farma (KAEF): National Service Is Charity

•Get a mandate to distribute mask throughout Indonesia - Estimated revenues and margin, How much compared to the last year’s earnings •Share Price...

Henry Soediarko

Sritex (SRIL): Undervalued with More Products and B2C

Expand when your peers retreat. That is what Sri Rejeki Isman (SRIL IJ)

Henry Soediarko

Mitra Keluarga (MIKA): Margin Expansion from COVID-19

The finding of the COVID

Henry Soediarko

Indonesian Consumers - This Transformation Is Forever - BUY Staples and Healthcare

The latest report from AC Niesen Indonesia is entitled "Meet the new consumer" and looks into the changing behaviour of Indonesia's consumers in...

Angus Mackintosh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)