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

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

Thematic (Sector/Industry)

The last week in ASEAN@Smartkarma was prolific with 32 insights being published across the region, which include an eclectic mix of both bottom up and top down and thematic pieces . I include a short summary here but please scroll down to the detailed section for a fuller account. In Bull on Thanachart Capital, Techical insight provider Thomas Schroeder suggests that Thanachart Capital Pcl (TCAP TB) shows explosive upside momentum, after breaking higher out of well defined bull wedge formation. In his insight, The Philippines: A Belated End to the Marawi Crisis, Jason Tan comments on President Duterte's declaration that Marawi City had been “liberated from terrorist influence” after security forces had killed Abu Sayyaf leader Isnilon Hapilon and another senior terrorist leader, Omar Maute.In M1 Finally Turns the Corner with Revenue Growth Recovering in 3Q17. Looks Oversold. our friends at New Street Research note that after an extended period of weakness, M1 (M1 SP) finally reported a much improved mobile service revenue trend, with positive YoY growth for the first time since 1Q15. In Trends Continue to Deteriorate at DIGI as Competition Remains Intense in Malaysia.New Street Research stress that they have been negative on the Malaysian telecoms market for some time. They see Malaysian telcos as overvalued and facing a period of declining returns as competition increases and spectrum prices rise from very low levels.  The latest results from DIGI (DIGI MK) do nothing to change that view. In ITMG: Beneficiary of Chinese Supply Cut, Dr. Andrew Stotz, CFA suggests that Indo Tambangraya Megah Tbk P (ITMG IJ) should benefit from recent Chinese supply cut which should drive the global coal prices and increase the demand for Indonesian coal. Domestic demand should also rise over the coming years, as coal-fired plants are the main part of the Indonesian government’s 35GW program.In Reviving Laggard Economy Key to Jokowi’s Re-Election Bid, Nicholas Chia  notes that the buoyant export figures are indicative of a largely conducive external environment and will provide a boost to growth in Indonesia, at a time when the economy is seemingly stalling. Recent surveys by both ISEAS and SMRC suggest that Jokowi remains the man to beat in 2019 with sizeable approval ratings.In IFRS 9 Drives 50% Higher Provisions, banking specialist Daniel Tabbush suggests that for certain the new accounting regulation will drive provisions higher for banks.  IFRS 9 starts to be phased in during 2018. Siam Commercial Bank Public Co (SCB TB) latest results are stunning not for their core income or loan growth, but for how meaningful IFRS 9 can be for Asia’s banks.In Singapore Airlines - Take off Remains Unclear, Alan Greene notes that based on Singapore Airlines Ltd (SIA SP) operating statistics and industry trends, the company is going nowhere fast. In Nagacorp: One of the Uncut Gems Left in the Asian Gaming Space, Ready to Sparkle Soon, gaming specialist Howard J Klein zeros in on casino player and find it has interesting prospects. Nagacorp Ltd (3918 HK)'s solid performance under the radar screen mainly due to investor focus on bullish catalysts elsewhere.In MNC Investama: Conference Call with the Chairman, Johannes Salim, CFA  writes on the business empire of Mr. Hary Tanoesoedibjo following a call with him. He revealed that Mnc Investama Tbk Pt (BHIT IJ) would focus on three core businesses: media, financial services, and property. The overall tone of Mr. Tanoesoedibjo is optimistic, with property, through Mnc Land Tbk Pt (KPIG IJ), being the new growth driver. In Sector Capsule: Baby Food in Vietnam, Yu Mitsuhashi from Euromonitor International Ltd. take look at the baby food market in Vietnam, which is dominated by Vinamilk.In Thai Mobile: DTAC Revenue Declines Again in 3Q17 as Market Share Falls. our friends at New Street Research note that data growth continues to drive the Thai mobile market. In EM Telcos: Video Growth Drives an EM Wireless Growth Inflection, Chris Hoare raised AIS (ADVANC TB) to Neutral to reflect higher data growth but kept DTAC (DTAC TB) on Reduce to reflect its ongoing market share and spectrum issues. In Malaysia: Inflation Spike Transitory; More Pressure on Opposition, economist Manu Bhaskaran suggests that higher oil prices have fed into price pressures, which explains the jump in headline inflation figures in September. CPI inflation rose 4.3% y/y in September 2017, up from the 3.7% recorded in August 2017. In Buoyant Remittances Bode Well for the Economy, Nicholas Chia notes that cash remittances in the Philippines surged 7.8% y/y in August 2017, which is the fastest growth in five months. In particular, remittances from Asia and the Middle East came in strongly, growing 9.1% and 19.2% respectively while Europe and the Americas displayed moderate growth.In his Insight TLKM: IndiHome Now in Two Million Indonesian Homes, Dr. Andrew Stotz, CFA looks at Telekomunikasi Indonesia (TLKM IJ), which should continue to be driven by growing data usage, which rose 120% YoY in 1H17 supported by IndiHome users growing by 25% to the total of 2m and mobile subscribers grew by 13% YoY over the same period. In Keppel-KBS US REIT IPO: Looks Cheap but Asset Mix Matters, our own Ke Yan, CFA, FRM looks at Keppel-KBS US REIT (KORE SP), which is raising USD448m in its listing of US-based commercial REIT. His fellow insight provider Will Tan, CAIA has provided an excellent preview of the deal here. In this insight, Ke Yan continues from this effort, and looks at more details of the deal and scores the deal in our Smartkarma ECM Framework.In ASTRO: Media Company with ROE Above 100%, Dr. Andrew Stotz, CFA notes that TV household penetration in Malaysia is expected to be 90% in FY22 from current 71% based on recent subscription CAGR of 4.5% in FY13 to FY17. Astro Malaysia Holdings Bhd (ASTRO MK) management targets to grow Go Shop 7x by FY22, riding its 38% YoY growth in FY17. The company trades on a high of 21.8x PBV but offers an ROE above 100% and a nice 5% dividend yield.In her Insight Genting Berhad: GITP &amp; Las Vegas Projects Offer Upside Potential To This Stable Stock, Nandini Vijayaraghavan, CFA looks at Malaysia-based Genting Bhd (GENT MK) which is a gaming focussed conglomerate with interests in oil palm plantations, property, power, and oil &amp; gas. In Cigars, Cigarillos and Smoking Tobacco in Thailand, our friend at Euromonitor International Ltd. that retail volume sales of cigars and cigarillos in Thailand remained at 1 million sticks in 2016, whilst retail volume sales of smoking tobacco increase by 4% to reach 598 tonnes and retail value sales in the latter grew by 8% to reach THB319 million. In his insight,WIKA: SOE to Benefit from High-Speed Rail Project, Dr. Andrew Stotz, CFA notes that as one of  Indonesia’s top three building contractors ranked by revenue, and a state-owned enterprise, Wijaya Karya Persero Tbk Pt (WIKA IJ) is particularly well placed to get orders for major infrastructure projects to be rolled out through 2019. In City Profile Capsule: Ho Chi Minh, our friends at Euromonitor International Ltd. look at Ho Chi Minh City which had GDP of USD47 billion in 2016 (23% of the country's total), Ho Chi Minh City is a foremost economic centre in Vietnam.In Overseas Education Ltd (OEL SP) - More Pain to Come as Weak Enrolment Points to 3Q Miss, insight provider Lloyd Moffatt takes a close look at this education play. He notes that the weak expat labour market and increasing competition between schools drove enrolment lower 4-4.5% QoQ and a 5.4% decline in revenue QoQ. Negative operating leverage is likely to impact earnings despite rationalization of teaching staff. He forecasts that FY17 net income of S$6.4m will fall short of consensus estimates of $8.0m. A strong balance-sheet is backed by positive FCF which underpins dividend and 7.4% yield, though is yet to reach trough in earnings.In Global Logistic Properties: Clear Timeline to Payment, our own Pranav Rao comments on this logistics giant following the release of the scheme document by the consortium of offers for the comoany.With the scheme document coming, we now have a concrete timeline to the scheme becoming effective and for shareholders to receive payment. Given GIC's irrevocable undertaking (which amounts to 36.84% of total shares) and the large premium offered, we believe the scheme resolutions will pass at the meeting on 30th November 2017.In 7-Eleven Malaysia: In a Soft Patch While Recovery Story Discounted, Johannes Salim, CFA writes on this convenience store operator following a conference call with management.  7 Eleven Malaysia Holdings Bhd (SEM MK) is the sole operator of 7-Eleven convenience stores in Malaysia. In DLG: Beneficiary of High Oil and Gas Storage Demand, Dr. Andrew Stotz, CFA suggests that Dialog Group Bhd (DLG MK) is well positioned to benefit from the growing demand for oil and gas storage facilities, which is supported by growing demand for oil in Asia.In Beauty Community: Looking to Book Some Profits, Vaibhav Saharan notes that Beauty Community Pcl (BEAUTY TB) is up 40% (vs SET Index +10%) since his Buy call in August post 2Q results. At Bt19/share, the stock trades above 50x 2017 EPS. For a high growth company, this multiple can be maintained (or expand further) on growth consistency.In Sector Capsule: Wearable Electronics in Vietnam, our friends at Euromonitor International Ltd. notes that smart wearables grew by 60% in retail volume terms to reach 18,000 units in 2017. The rising popularity of smart wearables is thanks to the higher demand from middle- and high-income consumers. in AGM Disa: Explosive Growth Phase Around the Corner, insight provider Nicolas Van Broekhoven comments on DiSa (DISA SP) after attending the AGM and following up on his earlier insight Discover Singapore: DiSa (DISA SP), Successful Wal-Mart Proof of Concept = Speculative Story Stock. He sees the company has potential to be an explosive growth story. In a fourth insight in this series, The War of the Worlds (Part 4) - The Empire Strikes Back, Angus Mackintosh notes that the online versus offline battle for supremacy continues apace in Indonesia. It is now it is the turn regulators to play their part. Firstly, an announcement from Bank Indonesia (BI) that mobile payment wallets can operate but must be licensed and even if licensed are highly restricted in terms of size.  The second new regulation comes from the Ministry of Transport, which has announced a new set of rules to cover both taxis (ride-hailing) and app-based transport operators.In Sathorn Series C: Revisiting Thai Insurance, Thai guru Athaporn Arayasantiparb, CFA circles back to take a look at the Thai insurance sector following the news Bangkok Bank nailed the deal with HK's AIA, the top foreign insurer in Thailand and one-time market leader. .In Sector Capsule: Mobile Phones in Vietnam, Euromonitor International Ltd. notes that feature phones declines by 12% in retail volume terms to six million units in 2017. The take a look at the overall sector and identify the growth drivers.In AGM PEC: Outlook Is Improving; This Laggard Has 80% Upside, Nicolas Van Broekhoven reports back on PEC Ltd. (PEC SP) after going to the AGM, which was attended by 100 investors. He maintains that the company remains an undervalued stock but in a difficult industry. 

The Week that Was in ASEAN@Smartkarma - Gaming, Education, and Logistics