In this briefing:
- Asian Bank Asset Quality: “One Overdue, Two Bad” 一逾两呆 The Complex Journey of the NPL
- PLANB: Moving Forward with VGI, the Outdoor Media Tycoon
- China’s New Semiconductor Thrust – Part 2: Commodities as a Quick Path to Success
- GEM Active Funds: Big Q1 Outperformance
- The Week that Was in ASEAN@Smartkarma – Jakarta’s MRT, Indonesian Sportswear, and Malaysian Telcos
1. Asian Bank Asset Quality: “One Overdue, Two Bad” 一逾两呆 The Complex Journey of the NPL
- Asset Quality recognition is something of a black art with varied definitions for non-performing loans (“NPLs”).
- Firstly, we analyse what a NPL is.
- We then evaluate provisioning changes across Asia. We rank countries.
- We further analyse specific underlying NPL recognition issues in China.
- We then rank a sample of regional banks and countries by NPL recognition.
- Later, we take a look at how different systems come under NPL stress and how they cope often in a crisis environment.
- Finally, we wrap things up with some concluding insights about the cultural backdrop which defines systemic asset quality.
2. PLANB: Moving Forward with VGI, the Outdoor Media Tycoon
We maintain PLANB with a BUY rating with the target price of Bt8.30 derived from 1.5xPEG’2019E of Thai consumer discretionary sector, which implies to 36xPE’19E.
The story:
- Collaboration among the leaders in OOH industry
- Revising down EPS in 2019-21E by 9-11% due to dilution effect
Risks: Obstacles for renewing concession contracts with state-owned enterprises along with falling consumer spending and a share-price dilution effect on the back of then generally mandated raise in capital.
3. China’s New Semiconductor Thrust – Part 2: Commodities as a Quick Path to Success
China’s current efforts to gain prominence in the semiconductor market targets memory chips – large commodities. This three-part series of insights examines how China determined its strategy and explains which companies are the most threatened by it.
This second part of the series explains how China chose commodity semiconductors (DRAM and NAND flash memory chips) as the best technology to pursue.
4. GEM Active Funds: Big Q1 Outperformance
Global Emerging Market funds made a strong start to 2019, with just over two-thirds of funds outperforming the benchmark, generating an average alpha above the IShares MSCI Emerging Markets Indx (ETF) (EEM US) of 1.3%.
In this report, we look at the performance of 180 global emerging market strategies over the first quarter of 2019 and analyse the countries, sectors and stocks that helped generate that outperformance. We also take a look at the longer-dated outperformance of active GEM funds.
5. The Week that Was in ASEAN@Smartkarma – Jakarta’s MRT, Indonesian Sportswear, and Malaysian Telcos
This week’s offering of Insights across ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up pieces. Please find a brief summary below, with a fuller write up in the detailed section.
This week’s highlights include value-added comment from Kevin O’Rourke on the ongoing Indonesian Presidential Election campaign, some differentiated comment on the upcoming follow-on offering from Map Aktif Adiperkasa PT (MAPA IJ), as well as the 6th and 7th Insights fromJessica Irene andAngus Mackintosh from the ongoing series of Indonesian Property onIntiland Development (DILD IJ) and Kawasan Industri Jababeka(KIJA IJ). I also include in the detailed section some on-the-ground snapshots from a recent trip to Jakarta, with brief highlights from company visits toNippon Indosari Corpindo (ROTI IJ), Sarimelati Kencana PT (PZZA IJ), andAce Hardware Indonesia (ACES IJ), as well as the first take on Jakarta’s brand new MRT.
Macro Insights
In Widodo Withstands Prabowo’s Debate Pressure / BI Hints at Lower 1Q CAD / Gerindra Prepares Dispute, CrossASEAN Insight Provider Kevin O’Rourke comments on the most important political and economic developments in Indonesia over the past week.
In his global Insight, What Next in the Inflation / Deflation Debate and What Does It Mean for Asset Prices? Stewart Paterson takes a look at this very current subject of debate globally.
Equity Bottom-Up Insights
In the sixth company visit Insight in an ongoing series, Indonesia Property – In Search of the End of the Rainbow – Part 6 – Intiland Development (DILD IJ), CrossASEAN Insight Provider Jessica Irene takes a deep dive into this high-rise and office focused developer. The company is a property developer that focuses on landed residential, industrial estates, high-end condominiums, and offices in Jakarta and Surabaya. DILD has a good track record in building and operating high-end condominiums and offices.
In Indonesia Property-In Search of the End of the Rainbow- Part 7 – Kawasan Industri Jababeka (KIJA IJ) CrossASEAN Insight Provider Angus Mackintosh takes a close look at Indonesia’s oldest Industrial Estate Developer.
In Map Aktif Follow-On Offering – Lace up for a Potential Long Run, Zhen Zhou, Toh runs through the latest details on the proposed follow-on offering for this Indonesian sports retailer.
Sector and Thematic Insights
In the first part in a series of Insights, Quiddity Singapore M&A Guide 2019, Travis Lundy kicks off by taking a look at Singapore from an M&A perspective.
In Company Visits: The Best of March 2019, Thai Guru Athaporn Arayasantiparb, CFA lays out his thoughts on the most interesting company visits he made in the month of March, including Singapore International School of Bangkok (SISB TB), Minor International (MINT TB), and After You Pcl (AU TB) .
In Malaysian Telcos: Look for Improvements to Continue in 2019, our friends at New Street Research revisit the Malaysian Telecoms sector post the recent results.
In Singapore Property – Luxury Segment Leads Price Decline in 1Q; Property Outlook Remains Shaky, Royston Foo revisits the Singapore Property after analysing 1Q19 numbers.
In Singapore REIT – The Draft Master Plan 2019 Boost and Q1 Scorecard, Anni Kum takes a bird’s eye view of the Singapore REIT space after 1Q19 numbers.
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