ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

In Equity Sales and Research for more than 25 years covering Asian markets. Possesses in-depth knowledge of a wide range of companies, economies, and markets in Asia. Over his career, he has specialised in HK/China and ASEAN markets at various different Investment Banks, most recently heading equities in Indonesia for Bank of America Merrill Lynch in Jakarta for more than three years. Whilst in Jakarta, he produced a well-read daily and weekly product on the Indonesian market, which included company visits, as well as political, economic and sector commentary. A former racing skier, who enjoys ultra-marathons and surfing in his spare time.

ASEAN Insight Provider

The Week That Was in ASEAN@Smartkarma - OTT's Back, Indonesian Consumer Health, and Lippo Karawaci

Arwana Citramulia (ARNA IJ) - Fired Up Top Quality Industrial

Arwana Citramulia (ARNA IJ) - Glazed Porcelain

Arwana Citramulia (ARNA IJ) - Jumping Jack Flash

Arwana (ARNA IJ) – A Turnaround in Full Swing

Arwana Citramulia (ARNA IJ) - Strong Underlying Demand Driving Price Hikes and Margin Growth

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

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ),</a> Indonesia's largest and most efficient ceramic tile manufacturer, continues to go from strength to strength in FY2020, after a short lull in 2Q2020, benefiting from the lowering on the gas price in April 2020, together with continuing improvements in its product mix and cost structure. A conversation with management further unpinned our positive view on the company.
The next significant move by the company will be its move into the higher-end glazed porcelain tile market versus its current lower end ceramic red-bodied tiles. Here it will compete head-on with Chinese imports but management is confident that <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> produces a better quality product, with a significant advantage on lead times, and providing much more attractive working capital terms to its customers. 
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> operated at 103% capacity utilization last year and plans to grow volumes by +10% in 2021, as well as improving its product mix further towards its Uno Digi brands, as well as its newer high-end offering, which should mean higher ASPs. 
Management sees further potential improvements in efficiencies in 2021, with even lower rejection rates in the production process and lower gas usage, which should help to drive better margins, along with the full-year impact on a lower gas price. 
<div class="content-highlight">
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> trades on 12.3x FY21E PER and 10.6x FY21E PER, compared to its 3-year average forward PER of 15.4x. We see the company as one of the best-managed industrials in Indonesia and this move into the higher-end tile market has the potential to drive the next leg of growth. 
</div>

Arwana Citramulia (ARNA IJ), Indonesia's largest and most efficient ceramic tile manufacturer, continues to go from strength to strength in FY2020, after a short lull in 2Q2020, benefiting from the lowering on the gas price in April 2020, together with continuing improvements in its product mix and cost structure. A conversation with management further unpinned our positive view on the company.
The next significant move by the company will be its move into the higher-end glazed porcelain tile market versus its current lower end ceramic red-bodied tiles. Here it will compete head-on with Chinese imports but management is confident that Arwana Citramulia (ARNA IJ) produces a better quality product, with a significant advantage on lead times, and providing much more attractive working capital terms to its customers. 
Arwana Citramulia (ARNA IJ) operated at 103% capacity utilization last year and plans to grow volumes by +10% in 2021, as well as improving its product mix further towards its Uno Digi brands, as well as its newer high-end offering, which should mean higher ASPs. 
Management sees further potential improvements in efficiencies in 2021, with even lower rejection rates in the production process and lower gas usage, which should help to drive better margins, along with the full-year impact on a lower gas price. 

Arwana Citramulia (ARNA IJ) trades on 12.3x FY21E PER and 10.6x FY21E PER, compared to its 3-year average forward PER of 15.4x. We see the company as one of the best-managed industrials in Indonesia and this move into the higher-end tile market has the potential to drive the next leg of growth. 


Arwana Citramulia (ARNA IJ) - Garuda Versus Dragon