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

Thematic (Sector/Industry)

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<div>During COVID-19, tech stocks have led the markets supported by demand expansion, strong balance sheets filled with cash, and innovative products. At the end of the cycle, there should be a rotation towards cyclical and value stocks but this time around is policy-induced recovery and during the COVID-19 crisis, tech stocks have led the recovery ahead of the cyclical. The question is whether this will carry on and large tech names to continue leading market recovery while cyclical drag their feet?</div>
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<div>The regulator in China has given dominant tech names a slap in the wrist with the anti-trust law that proposes to democratize the payment systems that will inevitably break up the monopolies and these companies will lose their customers' stickiness. </div>
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<div>In light of the <strong>antitrust</strong> law and the real economic recovery in China, investors should start to underweight technology stocks in China such as Tencent, Alibaba, Meituan, and start to overweight travel and tourism stocks such as <a href="https://www.smartkarma.com/entities/air-china-ltd-a" target="_blank" data-smartkarma-citation="entities:1080:1" rel="noopener">Air China Ltd (A) (601111 CH)</a> , <a href="https://www.smartkarma.com/entities/travelsky-technology-ltd-h" target="_blank" data-smartkarma-citation="entities:19829:1" rel="noopener">Travelsky Technology Ltd H (696 HK)</a> , <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> and also Industrials such as <a href="https://www.smartkarma.com/entities/zoomlion-heavy-industry-h" target="_blank" data-smartkarma-citation="entities:7817:1" rel="noopener">Zoomlion Heavy Industry H (1157 HK)</a> and <a href="https://www.smartkarma.com/entities/sany-heavy-equipment-intl" target="_blank" data-smartkarma-citation="entities:11104:1" rel="noopener">Sany Heavy Equipment Intl (631 HK)</a>expecting that construction works can resume at full capacity anytime soon. </div>
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<div>Globally, dominant tech stocks (FANGS) such as <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> , <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> , <a href="https://www.smartkarma.com/entities/netflix-inc" target="_blank" data-smartkarma-citation="entities:20451:1" rel="noopener">Netflix Inc (NFLX US)</a> and <a href="https://www.smartkarma.com/entities/alphabet-inc-cl-c" target="_blank" data-smartkarma-citation="entities:11369:1" rel="noopener">Alphabet Inc Cl C (GOOG US)</a> should start to be underweight due to the potential punitive measures from the House if Democrats win. Investors should start to overweight industrial stocks such as <a href="https://www.smartkarma.com/entities/caterpillar-inc" target="_blank" data-smartkarma-citation="entities:697:1" rel="noopener">Caterpillar Inc (CAT US)</a> and staples such as <a href="https://www.smartkarma.com/entities/procter-gamble-co" target="_blank" data-smartkarma-citation="entities:978:1" rel="noopener">Procter &amp; Gamble Co (PG US)</a> and <a href="https://www.smartkarma.com/entities/nestle-sa-020546b9-e58a-465b-a5ac-98e84143bf4c" target="_blank" data-smartkarma-citation="entities:27908:1" rel="noopener">Nestle SA (NESN SW)</a> . </div>
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<div>Investors should also consider start building positions in blue-chip with moat names such as <a href="https://www.smartkarma.com/entities/visa-inc-class-a-shares" target="_blank" data-smartkarma-citation="entities:8707:1" rel="noopener">Visa Inc Class A Shares (V US)</a> and <a href="https://www.smartkarma.com/entities/travelers-cos-inc" target="_blank" data-smartkarma-citation="entities:10300:1" rel="noopener">Travelers Cos (TRV US)</a> as they provide stability and proxy to America's economic recovery. </div>


During COVID-19, tech stocks have led the markets supported by demand expansion, strong balance sheets filled with cash, and innovative products. At the end of the cycle, there should be a rotation towards cyclical and value stocks but this time around is policy-induced recovery and during the COVID-19 crisis, tech stocks have led the recovery ahead of the cyclical. The question is whether this will carry on and large tech names to continue leading market recovery while cyclical drag their feet?


The regulator in China has given dominant tech names a slap in the wrist with the anti-trust law that proposes to democratize the payment systems that will inevitably break up the monopolies and these companies will lose their customers' stickiness. 



In light of the antitrust law and the real economic recovery in China, investors should start to underweight technology stocks in China such as Tencent, Alibaba, Meituan, and start to overweight travel and tourism stocks such as Air China Ltd (A) (601111 CH) , Travelsky Technology Ltd H (696 HK) , Cathay Pacific Airways (293 HK) and also Industrials such as Zoomlion Heavy Industry H (1157 HK) and Sany Heavy Equipment Intl (631 HK)expecting that construction works can resume at full capacity anytime soon. 

Globally, dominant tech stocks (FANGS) such as Facebook Inc A (FB US) , Apple Inc (AAPL US) , Netflix Inc (NFLX US) and Alphabet Inc Cl C (GOOG US) should start to be underweight due to the potential punitive measures from the House if Democrats win. Investors should start to overweight industrial stocks such as Caterpillar Inc (CAT US) and staples such as Procter &amp; Gamble Co (PG US) and Nestle SA (NESN SW) . 

Investors should also consider start building positions in blue-chip with moat names such as Visa Inc Class A Shares (V US) and Travelers Cos (TRV US) as they provide stability and proxy to America's economic recovery. 

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<p>It was reported by several news media outlets that Apple and Sony Music Entertainment have held discussions with Wondery, the producer of popular shows “Dirty John” and “Dr. Death” on a potential acquisition. Wondery is looking for about US$300-400m and at least four companies including Apple and Sony Music Entertainment (SME) have discussed with Wondery about a potential deal.</p><p>A deal is expected to be established in the coming months and the discussions are said to be in early stages. We believe this comes in response to streaming rival Spotify who has invested as much as US$400m over the last two years to expand its podcast offerings. Through M&amp;A deals, Spotify now has a stake in almost every aspect of the podcast value chain including content, distribution and monetisation (ad technology and marketplaces).</p><p>Spotify has expanded its library of exclusive podcasts to differentiate its offering from Apple Music which makes Spotify more appealing to listeners of audio content.</p>

It was reported by several news media outlets that Apple and Sony Music Entertainment have held discussions with Wondery, the producer of popular shows “Dirty John” and “Dr. Death” on a potential acquisition. Wondery is looking for about US$300-400m and at least four companies including Apple and Sony Music Entertainment (SME) have discussed with Wondery about a potential deal.A deal is expected to be established in the coming months and the discussions are said to be in early stages. We believe this comes in response to streaming rival Spotify who has invested as much as US$400m over the last two years to expand its podcast offerings. Through M&amp;A deals, Spotify now has a stake in almost every aspect of the podcast value chain including content, distribution and monetisation (ad technology and marketplaces).Spotify has expanded its library of exclusive podcasts to differentiate its offering from Apple Music which makes Spotify more appealing to listeners of audio content.

Apple and Sony Music Compete to Buy Wondery to Take on Rival Spotify’s Podcast Offerings

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Prosus/Naspers, GMO Internet, CK Hutchison, AviChina, Ant Group, Tonly

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Equity Bottom-Up

<p>We have noted previously that we have positive expectations for Sony’s use of next generation haptics in its controllers for the PS5. This is a point of differentiation with the next generation Xboxes and commentary so far suggests that the feature could be reasonably impactful for PS5 share.</p>

We have noted previously that we have positive expectations for Sony’s use of next generation haptics in its controllers for the PS5. This is a point of differentiation with the next generation Xboxes and commentary so far suggests that the feature could be reasonably impactful for PS5 share.

Sony – PS5 Controller Haptics Getting Good Reviews

<p>It was reported by Nikkei on Friday (30<sup>th</sup> October) that Sony has entered into final negotiations to acquire the US-based anime-streaming service company Crunchyroll. The deal is expected to be worth around JPY100bn (US$957m) which will give Sony access to Crunchyroll’s 70m users across the world.</p><p>Anime streaming has become mainstream in Japan and globally, and Sony has taken several initiatives to expand its presence in the anime segment. The company previously acquired a 95% stake in Funimation, a Japanese anime distributor and also bought over children’s animation series maker Silvergate, who has developed world-class series such as Octonauts, Hilda and Peter Rabbit. Sony also acquired a stake in Chinese Comic and anime developer Bilibili.</p>

It was reported by Nikkei on Friday (30th October) that Sony has entered into final negotiations to acquire the US-based anime-streaming service company Crunchyroll. The deal is expected to be worth around JPY100bn (US$957m) which will give Sony access to Crunchyroll’s 70m users across the world.Anime streaming has become mainstream in Japan and globally, and Sony has taken several initiatives to expand its presence in the anime segment. The company previously acquired a 95% stake in Funimation, a Japanese anime distributor and also bought over children’s animation series maker Silvergate, who has developed world-class series such as Octonauts, Hilda and Peter Rabbit. Sony also acquired a stake in Chinese Comic and anime developer Bilibili.

Sony: Crunchyroll Acquisition to Strengthen Anime Content and Take on Rivals Netflix and Hulu

Japan

Sony Group Corporation manufactures and distributes electronics products and provides related solutions. The Company produces televisions, cameras, mobiles, audio and video products. game equipment, and more. Sony Group also engages in game production,  movie production, music production, and other businesses.

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Sony Corp (SONY US)

Tech Sell-Off: Stop or Carry On?

In light of the anti-trust law in China, real economic recovery, higher corporate tax rates in the US, and breakup of dominant tech firms,...

Henry Soediarko

Apple and Sony Music Compete to Buy Wondery to Take on Rival Spotify’s Podcast Offerings

It was reported by several news media outlets that Apple and Sony Music Entertainment have held discussions with Wondery, the producer of popular...

Shifara Samsudeen, ACMA, CGMA

Last Week in Event SPACE: Prosus/Naspers, GMO Internet, CK Hutchison, AviChina, Ant Group, Tonly

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Sony – PS5 Controller Haptics Getting Good Reviews

The haptic feedback and adaptive triggers on Sony's new PS5 controllers offer entirely new functionality for the console and could be a significant...

Mio Kato

Sony: Crunchyroll Acquisition to Strengthen Anime Content and Take on Rivals Netflix and Hulu

It was reported by Nikkei that Sony has entered into final negotiations to acquire the US-based anime-streaming service company Crunchyroll. In...

Shifara Samsudeen, ACMA, CGMA

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