Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>During 1Q2024, the 200 largest weighted companies in the GEM index reported average EPS growth of +8.7%y/y, down slightly from the +10.1% reported during 4Q2023.</li>
<li>Only 47% of companies delivered positive EPS surprises, and only 44% delivered positive Sales surprises, a sharp correction from the positive trend witnessed during 2023.</li>
<li>Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.</li>
</ul>


During 1Q2024, the 200 largest weighted companies in the GEM index reported average EPS growth of +8.7%y/y, down slightly from the +10.1% reported during 4Q2023.
Only 47% of companies delivered positive EPS surprises, and only 44% delivered positive Sales surprises, a sharp correction from the positive trend witnessed during 2023.
Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.


Global Emerging Markets: Reporting Season Summary, 1Q2024

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.

Event-Driven

<ul>
<li>On 21 March, Bloomberg reported that TPG and MBK had restarted a strategic review to reduce their <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> shareholdings. Previous privatisation rumours have fizzled out.</li>
<li>The options include going private, attracting new investors, or raising cash through some of HKBN’s assets. Infrastructure-focused funds and one Chinese telco (likely <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>) were approached.</li>
<li>The probability of an offer is low as TPG and MBK will need to accept a material discount on their cost per share and financing challenges due to high leverage. </li>
</ul>


On 21 March, Bloomberg reported that TPG and MBK had restarted a strategic review to reduce their HKBN Ltd (1310 HK) shareholdings. Previous privatisation rumours have fizzled out.
The options include going private, attracting new investors, or raising cash through some of HKBN’s assets. Infrastructure-focused funds and one Chinese telco (likely China Mobile (941 HK)) were approached.
The probability of an offer is low as TPG and MBK will need to accept a material discount on their cost per share and financing challenges due to high leverage. 


HKBN (1310 HK): Déjà Vu as Privatisation Rumours Resurface

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>Organic and inorganic opportunities for rerating4Q23 foretells positive trends for better subs demographics and ARPU for IOH &amp; XL, justifying their guidance for FY24 revenue to outperform.</li><li>TLKM’s valuation reflects mainly ex-Java challenges</li><li>Integrated services qualities can be unlocked with the presence of a strategic investor.An EXCL-FREN M&amp;A may not trigger a tender-offer</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Organic and inorganic opportunities for rerating4Q23 foretells positive trends for better subs demographics and ARPU for IOH &amp; XL, justifying their guidance for FY24 revenue to outperform.TLKM’s valuation reflects mainly ex-Java challengesIntegrated services qualities can be unlocked with the presence of a strategic investor.An EXCL-FREN M&amp;A may not trigger a tender-offerContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Telco - Organic and Inorganic Opportunities for Rerating

<ul><li>IOH may see 4Q23 revenue growth (+3.9%qoq) provided that it absorbs its capex budget, while we expect margins to continue to improve. </li><li>Expect TLKM &amp; EXCL to deliver 4Q23 revenue growth of 4.0%/1.5% qoq but with opex potentially weighing on the 4Q23 margins.</li><li>ISAT is our top pick for expected earnings improvements, while EXCL is an attractive merger target and has value unlocking potential.  </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

IOH may see 4Q23 revenue growth (+3.9%qoq) provided that it absorbs its capex budget, while we expect margins to continue to improve. Expect TLKM &amp; EXCL to deliver 4Q23 revenue growth of 4.0%/1.5% qoq but with opex potentially weighing on the 4Q23 margins.ISAT is our top pick for expected earnings improvements, while EXCL is an attractive merger target and has value unlocking potential.  Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

4Q23 Preview: Telcos to Deliver Tangible Quarterly Topline Growth with Broadly In-Line Earnings

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

<ul>
<li>CrossASEAN Ground Zero is a new thematic weekly product that will focus on key Southeast Asian digital themes and technology trends with a core focus on Indonesia. </li>
<li>This week is focused on GoTo's sustainability credentials and the recent scientific validation of its emission targets. </li>
<li>2024 will also see a ramp-up of Indonesia's 2W EV charging infrastructure to power growth in numbers. We also look at key themes in 2024 for the digital economy.</li>
</ul>


CrossASEAN Ground Zero is a new thematic weekly product that will focus on key Southeast Asian digital themes and technology trends with a core focus on Indonesia. 
This week is focused on GoTo's sustainability credentials and the recent scientific validation of its emission targets. 
2024 will also see a ramp-up of Indonesia's 2W EV charging infrastructure to power growth in numbers. We also look at key themes in 2024 for the digital economy.


CrossASEAN Ground Zero - GoTo's Sustainability Verified, 2W EVs, and the Stormy Year Ahead

Indonesia

PT Telekomunikasi Indonesia Persero Tbk is a telecommunication company that provides a variety of domestic telecommunications services such as telephone, telex, telegram, satellite, and leased lines services.  The Company also offers electronic mail, mobile communication, and cellular phone services.

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Telekomunikasi Indonesia (TLKM IJ)

Global Emerging Markets: Reporting Season Summary, 1Q2024

In this quarterly insight, we analyse recent GEM reporting trends by looking at Sales and EPS growth, size and percentage of positive surprises,...

Wium Malan, CFA

HKBN (1310 HK): Déjà Vu as Privatisation Rumours Resurface

The probability of a takeover offer is low, which explains TPG/MBK's exploration of other options. An attractive dividend yield continues to...

Arun George

Telco - Organic and Inorganic Opportunities for Rerating

Organic and inorganic opportunities for rerating4Q23 foretells positive trends for better subs demographics and ARPU for IOH & XL, justifying their...

BRI Danareksa Research

4Q23 Preview: Telcos to Deliver Tangible Quarterly Topline Growth with Broadly In-Line Earnings

ISAT is our top pick for expected earnings improvements, while EXCL is an attractive merger target and has value unlocking potential.

BRI Danareksa Research

CrossASEAN Ground Zero - GoTo's Sustainability Verified, 2W EVs, and the Stormy Year Ahead

CrossASEAN Ground Zero is a new thematic weekly product that will focus on key Southeast Asian digital themes and technology trends with a core...

Angus Mackintosh

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