Indonesia

• Bukalapak (BUKA IJ) 1Q2022 results were all about execution, with significant improvements in take-rates for its Mitra business, and even more so for its marketplace segment. 
• The launch of AlloFresh and Allo Bank Indonesia will add some further depth and breadth to the platform’s product offering and help to accerlate the move towards profitabilty.
• Bukalapak (BUKA IJ) looks like an increasingly interesting way to play the Indonesian digital economy with an expanding ecosystem and increasing take-rates at the same time. 

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. China Jinmao Holdings
2. Guangzhou R&F Properties
3. Sunac China Holdings
4. Greenland Hong Kong Holdings
5. Evergrande

and more…

• Astra International 1Q2022 numbers reflect its prime positioning as a beneficiary of recovering domestic growth in Indonesia and its exposure to the commodities boom through United Tractors (UNTR IJ).
• It has increased market share in autos through Toyota and Daihatsu plus holds a strong position in providing auto, motorcycle, and heavy equipment financing providing further geared exposure. 
• Astra International has a war chest from the sale of Bank Permata which is yet to be deployed but could be in the digital space as a future potential catalyst.

• Arwana Citramulia (ARNA IJ) released a strong set of 1Q2022 surpassing expectations and paving the way for strong growth in 2022 driven by an improving product mix.
• ASPs for Arwana are increasing through changing product mix, which is improving margins but not suppressing demand with a move to higher-end Digi Uno and ARNA products. 
• A webinar with management confirmed the positive outlook for 2022, with an estimate of +30% bottom-line growth forecast from increased volumes, greater efficiencies, and higher ASPs through improved product mix.

• Bank Negara Indonesia (BBNI IJ) released a solid set of 1Q2022 results, with new loan bookings improving to pre-pandemic levels, strong non-interest income, and improving credit costs.
• The bank continues to pursue a multi-pronged digital strategy, with strong growth in mobile banking which now surpasses ATMs on transactions plus the launch of Bank Mayora digital bank.
• Bank Negara Indonesia (BBNI IJ) has already seen some upward re-rating since the last results but this can continue as its digital strategy bites and loan growth and NIMs improve.

• AKR Corporindo (AKRA IJ) results continued to reflect its key exposure to both economic recovery in Indonesia and its exposure to rising commodity prices through its chemical distribution.
• Volume growth in petroleum distribution may surprise on the upside, whilst chemical prices remain elevated boosting that business.
• The pipeline for its JIIPE industrial estate looks promising and management remains confident in targeting 40 ha land sales with potential upside from Freeport Smelter related demand. 

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.

• PT Pertamina (Persero)
• Sands China Ltd
• Vedanta Resources

• Finally, Blue Bird (BIRD IJ) is back on profit in two consecutive quarters, highlighting the comeback mode in Indonesia. 
• It went on to sign a partnership to develop and integrate big data analytics with PT LRT Jakarta and BCA app users can call Bluebird from the app. 
• It is still trading at 0.6x PBR while pre COVID level was 1.3-1.5x PBR. 

• Bank Central Asia (BBCA IJ) released its 1Q2022 this week, reflecting an ongoing recovery and the bank’s strong positioning to take advantage, with new lending picking up strongly.
• The bank is seeing strong growth in CASA driven by its lead in transactional banking and digital initiatives, with its CASA ratio hitting 80% by the end of 2022. 
• Credit costs are also forecast to fall further this year, which will provide an additional boost to profitability. It trades at a premium to peers but generates consistent returns.

• Float and capping changes will require passive trackers to buy Bank Central Asia (BBCA IJ) and sell Bank Rakyat Indonesia Persero (BBRI IJ) at the close on 28 April.
• There will be passive changes to other stocks too, though the impact will not be material on most of the stocks.
• GoTo (GOTO IJ) could be added to the IDX30, LQ45 and IDX80 indices in May. With the oversubscription option nearly all used up, the stock should trade weak near-term.

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.

• Delta Dunia Makmur
• Jingrui Holdings
• KWG Living Group

• The review period for the price cutoff of the MSCI May SAIR commenced last week and will run through the coming week. MSCI normally chooses a day from week 1.
• Yangzijiang Financial Holding Ltd (YZJFH) will list on 28 April and one stock will be deleted from the FTSE Straits Times Index (STI) (STI INDEX) at the close on 4 May.
• There were inflows to China and Taiwan focused ETFs, while there were outflows from Korea focused ETFs.

• Adi Sarana Armada (ASSA IJ) booked a strong set of FY2021 results with sales growing by +68% and net profit by +64%, driven by a strong performance from logistics business.
• Anteraja now makes up 54% of sales and broke even in FY2021, delivering an average of 650,000 parcels per day in 2021, expected to rise to 1.5m by December 2022.
• Adi Sarana Armada (ASSA IJ) is a proxy for mobility through car leasing, online and offline used car sales through Autopedia, and last-mile deliveries through Anteraja.

• Superapp GoTo (GOTO IJ) made its public debut on the Indonesian Stock Exchange on 11th April. The company set the final IPO price at IDR338 per share.  
• GoTo’s shares surged nearly 23% to IDR416 a piece on the open, boosting the company’s market cap to more than IDR497trn.
• GoTo’s share price has continued to slide and our SOTP valuation suggests that there is further downside.

• The review period for the MSCI May 2022 SAIR started yesterday. As of the close on 15 April, we see 45 potential adds and 65 potential deletions for Asia.
• At a country level, the most changes are in China, while the largest net change is expected in Japan (16 deletions) and China (10 deletions). Indonesia could have five inclusions.
• The largest potential inclusions are Powerchip Semiconductor Manufacturing Corp, Tata Elxsi Ltd, Orient Overseas International, Pop Mart International Group Limited, Eva Airways, Jindal Steel & Power and China Airlines.

The Asia HY Trade Book for the month of April includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.