Indonesia

• Delta Djakarta (DLTA IJ) is a cheaper small-cap option to play the recovery of tourism in Indonesia instead of Multi Bintang Indonesia (MLBI IJ) 
• It’s 5Yr/10Yr average ROCE is 22%/29% lower than MLBI IJ due to the high net cash on the balance sheet, ~25% of the market capitalization.
• Trading at 11x PE and 10% dividend yield on normalized earnings (Assuming a 110% payout ratio since the 5 Yr average is 120%), the stock is super cheap.

• Multi Bintang Indonesia (MLBI IJ) is Indonesia’s leading beer company, with a marketshare of 50% by volume. The company is 89% owned by Heineken. 
• The company has maintained an average 5 Yr/10 Yr ROCE of over 72%/82% and paid out 80-100% of its profits as dividends.  It is also net cash.
• The stock boasts a 6.5%-7% dividend yield and trades at 14-15x PE if profits normalize due to increased tourism in Indonesia, where we believe most of the demand is. 

• Sido Muncul (SIDO IJ) performance during COVID was stellar and posted record high revenues and earnings without sacrificing margins. 
• FY 22’s result was the first time in many years that both revenue and net income decelerated. 
• Current valuations at 19x PER and 7x PBR are not cheap, historically or relative to their peers. 

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• In this insight, we examine J&T Global Express (1936374D CH)‘s operation in SE Asia, where it’s the region’s dominant player, with market share of 22.5% by volume 
• We profile SE Asian demand and supply and compare these to the development of China’s express industry, acknowledging the key role Alibaba (ADR) (BABA US) has played there
• We also present a framework for estimating the value of J&T’s SE Asian operation by identifying the most appropriate comps and EV valuation multiples

• Amman Mineral Internasional (1416286D IJ) raised around US$714m in its Indonesian IPO.
• Amman Mineral International (AMI) carries out exploration, development, mining, processing. The company operates an open pit copper and gold mine known as the Batu Hijau mine in Indonesia.
• In this note, we will talk about the trading dynamics and valuation.

• PNLF has seen its asset growth ratchet downward, running at near 12-year lows at +2% YoY 
• Phases of ROE decline are apparent, from 12-13%, then to 9%, and now to 5-6%
• At least, there is a rebound in profit growth in FY22, after dismal 3 years

• Indonesia-based fleet-tracking startup TransTRACK has secured US$2.1 million in a pre-Series A funding round.
• Ortus Star, Cocoon Capital, and YCAB Ventures led the funding round. Goldbell Investment, NP Consulting, Damson Capital, and unnamed angel investors participated.
• TransTRACK plans to use the fresh funds to expand operations to 100 cities in Indonesia and other Southeast Asian countries, including Malaysia, Singapore, Thailand, Cambodia, and Vietnam, providing an end-to-end supply chain solution for the business players in the region.

• Since 2015, Indonesia’s digital economy has grown 10x, reaching US$77 billion in gross merchandise value. However, credit penetration remains low for individuals and businesses alike, with only 3% of Indonesians having a credit card.
• Access to credit would allow businesses to boost customer adoption, among other things, and Indonesia-based fintech firm Finfra is looking to fill this niche.
• The startup has raised US$1 million to help make this happen.

• Ace Hardware Indonesia is starting to see the seeds of recovery come through in SSSG through April and May and should get a further boost from its BOOM sale.
• The company has resumed its store opening with plans for 13 new stores this year and a new store concept being rolled out across existing stores providing a potential boost. 
• Ace Hardware Indonesia has a more cohesive digital strategy and has taken on its first brand ambassadors to boost millennial demand. Valuations remain attractive. 

• Sumber Alfaria Trijaya (Alfamart) continues to book solid growth in its core mini-market business but is now pushing harder with both larger format Alfamidi and Lawson convenience stores formats.
• 89%-Owned Midi Utama Indonesia (Alfamidi) recently announced a rights issue to finance the expansion of Alfamidi and Lawson underpinning its more aggressive expansion plans. 
• Sumber Alfaria Trijaya booked solid 1Q2023 numbers for its core business and continues to grow its digital connections and collaborations as an integral offline leg of the digital economy. 

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Central China Real Estate
2. Sino-Ocean Group
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• Medikaloka Hermina (HEAL IJ) saw a strong recovery in patient volumes in 1Q2023, with margins starting to normalise from COVID highs and occupancy rates picking up. 
• The company is back on an expansion track and recently secured the first hospital in the new capital next year with two new hospitals planned to open this year.
• Medikaloka Hermina continues to focus on women & children and JKN patients but is also expanding into more intensive specialist treatments to drive profits. Valuations remain attractive versus peers.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharat Petroleum Corp
• Meituan
• Pertamina Geothermal Energy

• AKR Corporindo provided an unseasonally upbeat indication for 2Q2023 for its petroleum and chemical product distribution businesses, and for the strong demand pick up for its retail JV with BP.
• Indications suggest that the company is well on track to meet its FY2023 guidance for its distribution businesses, and is optimistic about the build-out of its retail filling stations. 
• Its JIIPE industrial estate secured 17 hectares in 2Q2023 but its pipeline is now 300-350 hectares, underlining the increasing importance to AKR Corporindo (AKRA IJ).