Indonesia

• Prodia (PRDA IJ) remains the leading diagnostics company in Indonesia and was a huge beneficiary of the pandemic and hence has seen a recent slowdown.
• The number of tests per visit increased in 1H2022, as customers returned to more routine testing post COVID plus the company is increasingly employing a digital approach to its business.
• Prodia is forecast to return to growth over the next two years, with  +11% EPS growth forecast for FY2023E and FY2024E, implying a forward PER of 8.6x.

• Selamat Sempurna (SMSM IJ) is one of the most interesting industrial companies in Indonesia but also the largest filter manufacturer in South-East Asia for heavy equipment and autos. 
• The company mainly produces filters for the replacement market under its Sakura brand, with Indonesia being the major growth driver along with the US but it exports to 120 countries. 
• The company has an almost second-to-none track record for growth in both profits and dividends, with current valuations looking attractive. 

• AKR Corporindo (AKRA IJ) continues to see strong sales momentum in July and August after releasing a strong set of 1H2022 results previously with strong momentum expected to year-end.
• Both petroleum distribution and chemical distribution are seeing strong tailwinds and its gas station business should be a beneficiary of the fuel price hike.
• AKR Corporindo‘s JIIPE estate booked a large 37-hectare plot sale in August with a potential for more smelter-related buyers to come. Valuations look fair but there are potential catalysts ahead.

• Mitra Adiperkasa (MAPI IJ) has proved itself with flying colours during the pandemic and continues to do so as mobility resumes, with offline sales recovering but digital remaining firm. 
• The company continues to build out its newer brands such as Boots, Footlocker, Sketchers,  DigiMAP, and Lego, with 161 store openings in 1H2022 and more to come in 2H2022.
• Mitra Adiperkasa is starting to ramp up its regional presence in Vietnam and the Philippines especially, which represents a future growth driver. Valuations are attractive despite the recent run up. 

• Astra International just held its public expose at which the company reiterated the strong performance in 1H2022 driven by automotive, finance, heavy equipment and commodity-related businesses. 
• The momentum will continue into 2H2022 and car sales continue to show strong growth, with the tailwind of higher commodity prices and increased mobility.
• Astra International remains one of our top picks in Indonesia for the ongoing recovery in an environment where commodity prices remain high. Valuations are attractive versus history. 

• Ace Hardware Indonesia (ACES IJ) is a household name in Indonesia and should be a beneficiary of the economic recovery and improved mobility but has languished, trading at 5-year lows.
• SSSG for the last two months have remained strong pushing the YTD SSSG into positive territory and confirming an ongoing recovery. It will roll out 15 new stores this year.
• Ace Hardware Indonesia (ACES IJ) is trading at 13.5x FY2023E PER, with EPS forecast to recover by +27.8% in FY2023E versus its 5-year average forward PER of 27x.

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. Fosun International
2. China SCE
3. CIFI Holdings
4. Vedanta Resources
5. China Jinmao Holdings

and more…

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.

• China SCE
• CIFI Holdings
• Fosun International
• Sino-Ocean Service
• Vedanta Resources

• Fazz claims it saw US$10B in annualised transaction volumes over the past year and looks to double the volumes in the next 12 months
• Fazz, a digital financial services group dual-headquartered in Singapore and Indonesia, has announced a US$100 million Series C funding round.
• Fazz will use the funds to grow the business and expand its teams in Singapore, Indonesia, Malaysia, Vietnam and Taiwan from 800 to 1,400.

• Food delivery is the digital sector with the highest adoption in Southeast Asia. The pandemic gave the segment a huge boost, as people were forced to stay at home.
• Local food startup Uena tried to solve this by building a network of online kitchens that can deliver these meals directly to customers.
• It targets lower and middle-income segments, such as office workers, university students, convenience store employees, and couriers of food delivery apps.

For our next Corporate Webinar we are glad to welcome Bukalapak’s Director – Strategy, Corp Comms and IR, Carl Reading.

In the upcoming webinar, Carl will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Henry Soediarko. The Corporate Webinar will include a live Q&A session.
 
This Corporate Webinar will be hosted on Tuesday, September 20, 17:00 SGT

• In mid-July, United Tractors (UNTR IJ) announced a buyback of up to 5 trillion rupiah, buying back “up to 20% of shares out.”  
• In United Tractors (UNTR IJ) Buyback – Sure to Be Impactful I said the buyback would be smaller than the headlines, but still likely quite impactful. 
• On Day 1, shares rose 5% to IDR 28,275. Since then the stock is up an additional 22%. Now we have a month left. There may be more juice still. 

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.

• Longfor Properties
• Tower Bersama Infrastructure

• In 2Q22, the six Indonesian banks retain their strong capital adequacy ratios, healthy credit quality and good NPL coverage; yet we see select credit quality headwinds, especially in MSME credit
• We maintain our positive view on Bank Mandiri, with its attractive pre-provision profitability and healthy cost of risk, whilst trading on attractive multiples; we prefer Bank Negara to Bank Rakyat
• We await stronger signals from Bank Permata for its “turn around” potential, especially if management can improve credit quality, and keep lowering its cost of risk to boost returns

• Gokomodo, an Indonesia-based agriculture supply chain platform, said it earned US$26 million in a series A round led by East Ventures.
• Gokomodo is a B2B startup that offers digital procurement, digital commerce, and distribution services.
• Its clients also have the option of buying competitive products through the company’s ecommerce storefront.

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.

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. ABM Investama
2. China Jinmao Holdings
3. Lifestyle International Holdings
4. Geely Auto
5. First Pacific Co

and more…