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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Sri Trang Gloves Thailand  / Event-Driven

Today is the last day of the review period for the June rebalance of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a>. The Stock Exchange of Thailand (SET) should announce the list of changes in the next few weeks and the changes will be effective after the close of trading on 30 June.With no changes made to the index methodology post the market consultation, we see three potential inclusions and exclusions for the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a>.<a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (Thailand) Public Company Limited (STGT TB)</a> and <a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> are high probability inclusions while <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a> and <a href="https://www.smartkarma.com/entities/bangkok-commercial-asset-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:28442:1" rel="noopener">Bangkok Commercial Asset Management (BAM TB)</a> are high probability deletions from the index.<a href="https://www.smartkarma.com/entities/sri-trang-agro-industry-pcl" target="_blank" data-smartkarma-citation="entities:2759:1" rel="noopener">Sri Trang Agro Industry (STA TB)</a> is a lower probability inclusion and <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint (Thailand) (TOA TB)</a> is the corresponding deletion.<a href="https://www.smartkarma.com/entities/kce-electronics-pcl" target="_blank" data-smartkarma-citation="entities:1892:1" rel="noopener">KCE Electronics PCL (KCE TB)</a> at rank 51 will just miss out on index inclusion at the June review despite the surge in the stock price due to the averaging process.

Today is the last day of the review period for the June rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX). The Stock Exchange of Thailand (SET) should announce the list of changes in the next few weeks and the changes will be effective after the close of trading on 30 June.With no changes made to the index methodology post the market consultation, we see three potential inclusions and exclusions for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX).Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) and IRPC PCL (IRPC TB) are high probability inclusions while VGI PCL (VGI TB) and Bangkok Commercial Asset Management (BAM TB) are high probability deletions from the index.Sri Trang Agro Industry (STA TB) is a lower probability inclusion and TOA Paint (Thailand) (TOA TB) is the corresponding deletion.KCE Electronics PCL (KCE TB) at rank 51 will just miss out on index inclusion at the June review despite the surge in the stock price due to the averaging process.

SET50 June Index Rebalance Preview: Review Period Ends Today

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Intco Medical Technology  Lt / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/intco-medical-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:29782:1" rel="noopener">Intco Medical Technology Co., Ltd-A (300677 CH)</a> is the largest disposable gloves provider in China and the third-largest in the world as measured by production capacity as of 31 December 2020, according to Frost &amp; Sullivan. Intco which listed its A Share on the Shenzhen Stock Exchange on 21 July 2017, is seeking an H Share listing to raise $1 billion, according to press reports. <div class="content-highlight">Intco along with its global peers have benefited tremendously from the demand-supply imbalance for gloves due to the COVID-19 pandemic. Most peer share prices have declined since the start of the year in expectation of peak quarterly earnings in the second or third quarter of 2021. The glove industry has gone through two previous cycles but has re-rated at each cycle – sector average P/E of 11x in 2007-11 and P/E of 18x in 2013-17. As the industry continues to be underpinned by structural growth drivers, the sector will likely re-rate as sector earnings normalise. Overall, we think that Intco has attractive fundamentals to benefit from these market dynamics. </div>

Intco Medical Technology Co., Ltd-A (300677 CH) is the largest disposable gloves provider in China and the third-largest in the world as measured by production capacity as of 31 December 2020, according to Frost &amp; Sullivan. Intco which listed its A Share on the Shenzhen Stock Exchange on 21 July 2017, is seeking an H Share listing to raise $1 billion, according to press reports. Intco along with its global peers have benefited tremendously from the demand-supply imbalance for gloves due to the COVID-19 pandemic. Most peer share prices have declined since the start of the year in expectation of peak quarterly earnings in the second or third quarter of 2021. The glove industry has gone through two previous cycles but has re-rated at each cycle – sector average P/E of 11x in 2007-11 and P/E of 18x in 2013-17. As the industry continues to be underpinned by structural growth drivers, the sector will likely re-rate as sector earnings normalise. Overall, we think that Intco has attractive fundamentals to benefit from these market dynamics. 

Intco Medical IPO Initiation: Riding the Cycle

The <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (Klci) (FBMKLCI INDEX)</a> is the flagship index of the Bursa Malaysia. The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be announced on 3 December and will be effective after the close of trading on 18 December.The review uses today's closing price to determine the stocks to be included into and excluded from the index. We see <a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp (SUCB MK)</a> being included in the index, replacing <a href="https://www.smartkarma.com/entities/klccp-stapled-group" target="_blank" data-smartkarma-citation="entities:7148:1" rel="noopener">KLCCP Stapled (KLCCSS MK)</a>. Glove makers should have a weighting of 14.23% in the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)</a> post the change.<a href="https://www.smartkarma.com/entities/kossan-rubber-industries" target="_blank" data-smartkarma-citation="entities:20482:1" rel="noopener">Kossan Rubber Industries (KRI MK)</a> has dropped out of the list of potential inclusions following the momentum unwind, while <a href="https://www.smartkarma.com/entities/genting-bhd" target="_blank" data-smartkarma-citation="entities:14210:1" rel="noopener">Genting Bhd (GENT MK)</a> and <a href="https://www.smartkarma.com/entities/genting-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:3141:1" rel="noopener">Genting Malaysia (GENM MK)</a> have rallied to avoid index deletion.We estimate passive funds will need to buy 0.35 days of ADV on <a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp (SUCB MK)</a>, while passive selling on <a href="https://www.smartkarma.com/entities/klccp-stapled-group" target="_blank" data-smartkarma-citation="entities:7148:1" rel="noopener">KLCCP Stapled (KLCCSS MK)</a> will be around 13 days of ADV.<a href="https://www.smartkarma.com/entities/klccp-stapled-group" target="_blank" data-smartkarma-citation="entities:7148:1" rel="noopener">KLCCP Stapled (KLCCSS MK)</a> was an inclusion at the previous review in June, and its short stay in the index looks like coming to an end.

The Kuala Lumpur Composite Index (Klci) (FBMKLCI INDEX) is the flagship index of the Bursa Malaysia. The index has 30 stocks and is a free float weighted market cap index. The next rebalance will be announced on 3 December and will be effective after the close of trading on 18 December.The review uses today's closing price to determine the stocks to be included into and excluded from the index. We see Supermax Corp (SUCB MK) being included in the index, replacing KLCCP Stapled (KLCCSS MK). Glove makers should have a weighting of 14.23% in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) post the change.Kossan Rubber Industries (KRI MK) has dropped out of the list of potential inclusions following the momentum unwind, while Genting Bhd (GENT MK) and Genting Malaysia (GENM MK) have rallied to avoid index deletion.We estimate passive funds will need to buy 0.35 days of ADV on Supermax Corp (SUCB MK), while passive selling on KLCCP Stapled (KLCCSS MK) will be around 13 days of ADV.KLCCP Stapled (KLCCSS MK) was an inclusion at the previous review in June, and its short stay in the index looks like coming to an end.

KLCI Index Rebalance Preview: Glovemaker to Take a Real Estate Spot

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)

Less than a year since the news hit that the Chinese outbreak spread to the world, <a href="https://www.smartkarma.com/entities/pfizer-inc" target="_blank" data-smartkarma-citation="entities:1131:1" rel="noopener">Pfizer Inc (PFE US)</a> has announced its vaccine with more than 90% effective in preventing Covid-19 among those without evidence of prior infection. Similar to <a href="https://www.smartkarma.com/insights/china-outbreak-theme-winners-and-losers" target="_blank" data-smartkarma-citation="insights:35971" rel="noopener">China Outbreak Theme: Winners and Losers</a> , this insight will discuss the potential winners and losers from the announcement of the vaccine. Travel-related names such as airlines, airport operators, tour operators, the duty-free operators are the clear beneficiaries of this news while auto dealership will also benefit from the potential lower unemployment later on. Instant noodle makers, pc makers that benefit from the work-from-home rush, as well as glove makers will no longer enjoy the same growth rate in 1H, and in the case of the glove makers, both ASP and volumes may see a decline.

Less than a year since the news hit that the Chinese outbreak spread to the world, Pfizer Inc (PFE US) has announced its vaccine with more than 90% effective in preventing Covid-19 among those without evidence of prior infection. Similar to China Outbreak Theme: Winners and Losers , this insight will discuss the potential winners and losers from the announcement of the vaccine. Travel-related names such as airlines, airport operators, tour operators, the duty-free operators are the clear beneficiaries of this news while auto dealership will also benefit from the potential lower unemployment later on. Instant noodle makers, pc makers that benefit from the work-from-home rush, as well as glove makers will no longer enjoy the same growth rate in 1H, and in the case of the glove makers, both ASP and volumes may see a decline. 

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

A few days after Malaysia’s largest glove manufacturer, <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>, announced its dual primary listing, <a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp (SUCB MK)</a>, Malaysia’s third-largest rubber glove maker by market value, announced that it was considering a dual listing on the Singapore Exchange.
Benefitting from the demand for COVID-19 resistant stocks, Supermax’s shares have risen to an all-time high since the beginning of the pandemic. Having increased by over 1,000% since the beginning of March 2020, Supermax’s shares currently trade at MYR 9.78 per share on the Kuala Lumpur Exchange.
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/169/977/original/Picture1.png?1604829481" class="editor-image img-responsive" data-smartkarma-image-id="169977"></figure>
<div class="content-caption">Source: Company disclosures</div>
</section>
In addition to allowing the company to expand and diversify its shareholder base, the company also expects that the proposed listing in Singapore will also enable the glove maker to pursue growth opportunities.
Supermax also noted that the proposed Singapore Exchange listing is still at an early stage and that the structure of the listing has not been finalised.

A few days after Malaysia’s largest glove manufacturer, Top Glove Corp (TOPG MK), announced its dual primary listing, Supermax Corp (SUCB MK), Malaysia’s third-largest rubber glove maker by market value, announced that it was considering a dual listing on the Singapore Exchange.
Benefitting from the demand for COVID-19 resistant stocks, Supermax’s shares have risen to an all-time high since the beginning of the pandemic. Having increased by over 1,000% since the beginning of March 2020, Supermax’s shares currently trade at MYR 9.78 per share on the Kuala Lumpur Exchange.


Source: Company disclosures

In addition to allowing the company to expand and diversify its shareholder base, the company also expects that the proposed listing in Singapore will also enable the glove maker to pursue growth opportunities.
Supermax also noted that the proposed Singapore Exchange listing is still at an early stage and that the structure of the listing has not been finalised.

Supermax Dual Listing: Gloves Off! – Part 2

Malaysia

Supermax Corporation Berhad is an investment holding company whose subsidiaries manufacture, sell, and export various type of latex gloves around the world.

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Supermax Corp (SUCB MK)

SET50 June Index Rebalance Preview: Review Period Ends Today

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Brian Freitas

Intco Medical IPO Initiation: Riding the Cycle

Intco is seeking an H Share listing to raise $1 billion, according to press reports. Overall, we think that Intco has attractive fundamentals to...

Arun George

KLCI Index Rebalance Preview: Glovemaker to Take a Real Estate Spot

Supermax is expected to join the KLCI after its eye-popping rally this year, taking the place of KLCC. Glove makers will have a weight of over 14%...

Brian Freitas

Pfizer Vaccine: Winners and Losers

Similar to China Outbreak Theme: Winners and Losers , this insight will discuss the potential winners and losers from the announcement of the vaccine.

Henry Soediarko

Supermax Dual Listing: Gloves Off! – Part 2

Supermax, Malaysia’s third-largest rubber glove maker by market value, announced that it was considering a dual listing on the Singapore Exchange.

Oshadhi Kumarasiri

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