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)

<div class="content-highlight">This past week's offering across <a href="mailto:ASEAN@Smartkarma" target="_blank">ASEAN@Smartkarma</a> includes a substantive mix of both top-down and thematic and equity bottom-up analysis. </div>Please find below a short summary of The Week that Was in <a href="mailto:ASEAN@Smartkarma" target="_blank">ASEAN@Smartkarma</a>. For more detail, please scroll down to the detailed section. I also include a brief update below on <a href="https://www.smartkarma.com/entities/13619" target="_blank" data-smartkarma-citation="entities:13619:1">Mitra Pinasthika Mustika Tbk Pt (MPMX IJ)</a>, an Indonesian based distributor of Honda motorcycles, Nissan cars and a market leader in lubricants. It is starting to see the benefits of an ongoing restructuring exercise.In his Insight, <a href="https://www.smartkarma.com/insights/indonesia-is-the-rupiah-at-risk-f280ea31-939b-454e-aa4b-e73f12c37bab" target="_blank" data-smartkarma-citation="insights:14275">Indonesia: Is the Rupiah at Risk?</a>, <a href="https://www.smartkarma.com/profiles/35" target="_blank" data-smartkarma-citation="accounts:35">Manu Bhaskaran</a> notes that in recent weeks, there are renewed concerns regarding the Rupiah as it weakened substantially, compared to the picture of stability in 1H17.in <a href="https://www.smartkarma.com/insights/vietnam-stellar-export-performance-boosts-overall-economic-growth" target="_blank" data-smartkarma-citation="insights:14278">Vietnam: Stellar Export Performance Boosts Overall Economic Growth</a>, Insight provider <a href="https://www.smartkarma.com/profiles/48" target="_blank" data-smartkarma-citation="accounts:48">Jason Tan</a> comments on the recent strength of economic performance in Vietnam. GDP rose 7.46% y/y in 3Q17, accelerating from 6.28% in 2Q17, driven by continued growth in exports of 20%.In <a href="https://www.smartkarma.com/insights/vietnam-innovating-hybrid-property" target="_blank" data-smartkarma-citation="insights:14281">Vietnam – Innovating Hybrid Property</a>, our friend at <a href="https://www.smartkarma.com/companies/884" target="_blank" data-smartkarma-citation="companies:884">Jones Lang Lasalle</a> take a look at Hybrid properties, which have been a highlight of the Vietnam real estate market in recent years. In his Insight <a href="https://www.smartkarma.com/insights/threl-emcs-thailand-to-sell-or-not-to-sell" target="_blank" data-smartkarma-citation="insights:13770">THREL &amp; EMCS Thailand: To Sell or Not To Sell?</a>, our Thai guru <a href="https://www.smartkarma.com/profiles/766" target="_blank" data-smartkarma-citation="accounts:766">Athaporn Arayasantiparb, CFA</a> writes after having joined a shareholder meeting to decide whether <a href="https://www.smartkarma.com/entities/10017" target="_blank" data-smartkarma-citation="entities:10017:1">Thaire Life Assurance Pcl (THREL TB)</a> would be allowed to sell its shares in EMICS Thailand to its own parent company <a href="https://www.smartkarma.com/entities/14640" target="_blank" data-smartkarma-citation="entities:14640:1">Thai Reinsurance Pub Co Ltd (THRE TB)</a> in a related transaction. in <a href="https://www.smartkarma.com/insights/ratch-electricity-generator-continues-to-expand" target="_blank" data-smartkarma-citation="insights:14297">RATCH: Electricity Generator Continues to Expand</a>, <a href="https://www.smartkarma.com/profiles/756" target="_blank" data-smartkarma-citation="accounts:756">Dr. Andrew Stotz, CFA</a> works his magic on <a href="https://www.smartkarma.com/entities/15338" target="_blank" data-smartkarma-citation="entities:15338:1">Ratchaburi Elec Gen Hodg Pub (RATCH TB</a>), whose major revenue contributor is domestic electricity engineering comprising 95% of total revenue.  The company's our new projects should increase RATCH’s capacity by 14% to 7,373MW by 2021, which in turn could boost top-line growth. In his on the ground insight, <a href="https://www.smartkarma.com/insights/blue-bird-multiple-nesting-sites-on-the-ground-in-j-town" target="_blank" data-smartkarma-citation="insights:14161">Blue Bird - Multiple Nesting Sites</a>, Jakarta veteran <a href="https://www.smartkarma.com/profiles/937" target="_blank" data-smartkarma-citation="accounts:937">Angus Mackintosh</a> suggests that <a href="https://www.smartkarma.com/entities/19482" target="_blank" data-smartkarma-citation="entities:19482:1">Blue Bird Tbk Pt (BIRD IJ)</a> remains an interesting proxy for rising middle-class consumption in Indonesia. In his Insight, <a href="https://www.smartkarma.com/insights/philippines-politicking-endangers-reforms" target="_blank" data-smartkarma-citation="insights:14269">Philippines: Politicking Endangers Reforms</a>, <a href="https://www.smartkarma.com/profiles/1567" target="_blank" data-smartkarma-citation="accounts:1567">Nicholas Chia</a> suggests that a watered down tax reform in the Philippines could put growth at risk. In <a href="https://www.smartkarma.com/insights/singapore-residential-sector-would-minsky-buy-a-unit-now" target="_blank" data-smartkarma-citation="insights:14119">Singapore Residential Sector: Would Minsky Buy a Unit Now?</a>, property specialist <a href="https://www.smartkarma.com/profiles/1787" target="_blank" data-smartkarma-citation="accounts:1787">Will Tan, CAIA</a>  notes that the enbloc sales fever is now on and with the first uptick in private home price increase after 15 quarters of sequential decline in 3Q17, many market watchers are saying this marks the start the recovery in the private residential market. In his Insight, <a href="https://www.smartkarma.com/insights/singapore-more-evidence-of-upsides-to-economic-growth" target="_blank" data-smartkarma-citation="insights:14306">Singapore: More Evidence of Upsides to Economic Growth</a>, <a href="https://www.smartkarma.com/profiles/1567" target="_blank" data-smartkarma-citation="accounts:1567">Nicholas Chia</a> examines the evidence for the prospect of higher economic growth in Singapore, with a revival in homes prices coming through and higher bank lending growth again in August, marking eleven months of expansion. On the whole, the recent data releases align with his narrative of a strong 3Q17 performance.In <a href="https://www.smartkarma.com/insights/discover-singapore-fu-yu-fuyu-sp-67-of-mkt-cap-is-cash-trading-below-book-and-offers-8-yield" target="_blank" data-smartkarma-citation="insights:14283">Discover Singapore: Fu Yu (FUYU SP); 67% of Mkt Cap Is Cash, Trading Below Book and Offers 8% Yield</a>, <a href="https://www.smartkarma.com/profiles/1208" target="_blank" data-smartkarma-citation="accounts:1208">Nicolas Van Broekhoven</a> looks at this Singapore based precision plastics solutions provider. The company has seen declining revenues for the last five years, as the management shed loss-making businesses, though net profits have been rising and cost-cutting takes effect. In <a href="https://www.smartkarma.com/insights/tenaga-nasional-placement" target="_blank" data-smartkarma-citation="insights:14350">Tenaga Nasional Placement - A Small Deal Size Relative to Previous Sell Down</a>, our own <a href="https://www.smartkarma.com/profiles/673" target="_blank" data-smartkarma-citation="accounts:673">Toh Zhen Zhou</a> comments on an institutional fund manager's sale of 35m shares in <a href="https://www.smartkarma.com/entities/195" target="_blank" data-smartkarma-citation="entities:195:1">Tenaga Nasional Bhd (TNB MK)</a> worth approximately US$115m. In <a href="https://www.smartkarma.com/insights/lodging-in-singapore" target="_blank" data-smartkarma-citation="insights:14286">Lodging in Singapore</a>, our friends at <a href="https://www.smartkarma.com/companies/483" target="_blank" data-smartkarma-citation="companies:483">Euromonitor International Ltd.</a> comment on lodging in Singapore which underperformed in 2017, with value sales of SGD4.9 billion representing a 2% fall from the previous year.In <a href="https://www.smartkarma.com/insights/aot-airport-services-ready-to-fly-high" target="_blank" data-smartkarma-citation="insights:14365">AOT: Airport Services Ready to Fly High</a>, <a href="https://www.smartkarma.com/profiles/756" target="_blank" data-smartkarma-citation="accounts:756">Dr. Andrew Stotz, CFA</a> writes on <a href="https://www.smartkarma.com/entities/239" target="_blank" data-smartkarma-citation="entities:239:1">Airports Of Thailand Pcl (AOT TB)</a> which draws its income from two streams, namely aeronautical and non-aeronautical revenue.  Several renovations and developments of its airports planned for the next 5-7 years should improve efficiency and service quality, as well as an increased current total 100m passenger capacity by an estimated 80%. AOT trades above ASEAN transportation at 5.3x FY18E PBV but offers a much better ROE.In <a href="https://www.smartkarma.com/insights/wijaya-karya-a-leading-infrastructure-contractor" target="_blank" data-smartkarma-citation="insights:14356">Wijaya Karya:  A Leading Infrastructure Contractor</a>, <a href="https://www.smartkarma.com/profiles/1079" target="_blank" data-smartkarma-citation="accounts:1079">Johannes Salim, CFA</a> comments on <a href="https://www.smartkarma.com/entities/1877" target="_blank" data-smartkarma-citation="entities:1877:1">Wijaya Karya Persero Tbk Pt (WIKA IJ)</a> which has proven that it can win high profile infrastructure projects, such as the Jakarta-Bandung High-Speed Railway won recently. From a valuation perspective, WIKA trades at an inexpensive 10.1x 2018 PE.In <a href="https://www.smartkarma.com/insights/a-broader-view-of-thai-bank-credit-quality" target="_blank" data-smartkarma-citation="insights:14386">A Broader View of Thai Bank Credit Quality</a>, Financial specialist <a href="https://www.smartkarma.com/profiles/12" target="_blank" data-smartkarma-citation="accounts:12">Daniel Tabbush</a> looks at not just the four or five mainstream listed banks in Thailand but also includes small banks, government specialized banks and foreign banks with reasonably populated financial data, which brings the total to 25 banks. He examines credit quality metrics ahead of upcoming results on 21st October, taking into account all Thai banks. Specifically, he looks at some meaningful divergence in trends of bad loan growth, as well as bad loan ratios. In <a href="https://www.smartkarma.com/insights/the-best-of-august-september-company-visits" target="_blank" data-smartkarma-citation="insights:13686">The Best of August / September Company Visits</a>, <a href="https://www.smartkarma.com/profiles/766" target="_blank" data-smartkarma-citation="accounts:766">Athaporn Arayasantiparb, CFA</a>  plucks out is top five picks from around 30 company visits during the past two months, which include; <a href="https://www.smartkarma.com/entities/17563" target="_blank" data-smartkarma-citation="entities:17563:1">Forth Corp Pcl (FORTH TB)</a>, <a href="https://www.smartkarma.com/entities/11290" target="_blank" data-smartkarma-citation="entities:11290:1">Erawan Group (ERW TB)</a>, <a href="https://www.smartkarma.com/entities/12958" target="_blank" data-smartkarma-citation="entities:12958:1">Ananda Development Pcl (ANAN TB)</a>, <a href="https://www.smartkarma.com/entities/10017" target="_blank" data-smartkarma-citation="entities:10017:1">Thaire Life Assurance Pcl (THREL TB)</a> and <a href="https://www.smartkarma.com/entities/14293" target="_blank" data-smartkarma-citation="entities:14293:1">Aapico Hitech Pcl (AH TB)</a>.  In <a href="https://www.smartkarma.com/insights/s-reits-cautionary-short-term-in-view-of-the-interest-rate-front" target="_blank" data-smartkarma-citation="insights:14118">S-REITs: Cautionary Short Term in View of the Interest Rate Front</a>, <a href="https://www.smartkarma.com/profiles/1787" target="_blank" data-smartkarma-citation="accounts:1787">Will Tan, CAIA</a> examines whether the prospects of rates hikes will lead to a repeat of history going back to 2015. In <a href="https://www.smartkarma.com/insights/discover-singapore-frencken-still-at-discount-to-peers-after-ytd-performance-65-upside-to-be-had" target="_blank" data-smartkarma-citation="insights:14371">Discover Singapore: Frencken, Still at Discount to Peers After YTD Performance, 65% Upside to Be Had</a>, <a href="https://www.smartkarma.com/profiles/1208" target="_blank" data-smartkarma-citation="accounts:1208">Nicolas Van Broekhoven</a> writes on Singapore listed <a href="https://www.smartkarma.com/entities/1414" target="_blank" data-smartkarma-citation="entities:1414:1">Frencken Group Ltd (FRKN SP)</a>. The company is a global precision engineering firm that serves customers in automotive, healthcare, industrial and semiconductor industries. In <a href="https://www.smartkarma.com/insights/city-development-seeks-to-privatise-majority-owned-millennium-and-copthorne" target="_blank" data-smartkarma-citation="insights:14409">City Development Seeks to Privatise Majority-Owned Millennium and Copthorne</a>, our friends at <a href="https://www.smartkarma.com/companies/146" target="_blank" data-smartkarma-citation="companies:146">Morningstar</a> comment on <a href="https://www.smartkarma.com/entities/57" target="_blank" data-smartkarma-citation="entities:57:1">City Developments Ltd (CIT SP)</a>, which has reached an agreement on the price to acquire the remaining 35% stake of <a href="https://www.smartkarma.com/entities/22047" target="_blank" data-smartkarma-citation="entities:22047:1">Millennium &amp; Copthorne Hotels (MLC LN)</a>, it does not already own.

This past week's offering across ASEAN@Smartkarma includes a substantive mix of both top-down and thematic and equity bottom-up analysis. Please find below a short summary of The Week that Was in ASEAN@Smartkarma. For more detail, please scroll down to the detailed section. I also include a brief update below on Mitra Pinasthika Mustika Tbk Pt (MPMX IJ), an Indonesian based distributor of Honda motorcycles, Nissan cars and a market leader in lubricants. It is starting to see the benefits of an ongoing restructuring exercise.In his Insight, Indonesia: Is the Rupiah at Risk?, Manu Bhaskaran notes that in recent weeks, there are renewed concerns regarding the Rupiah as it weakened substantially, compared to the picture of stability in 1H17.in Vietnam: Stellar Export Performance Boosts Overall Economic Growth, Insight provider Jason Tan comments on the recent strength of economic performance in Vietnam. GDP rose 7.46% y/y in 3Q17, accelerating from 6.28% in 2Q17, driven by continued growth in exports of 20%.In Vietnam – Innovating Hybrid Property, our friend at Jones Lang Lasalle take a look at Hybrid properties, which have been a highlight of the Vietnam real estate market in recent years. In his Insight THREL &amp; EMCS Thailand: To Sell or Not To Sell?, our Thai guru Athaporn Arayasantiparb, CFA writes after having joined a shareholder meeting to decide whether Thaire Life Assurance Pcl (THREL TB) would be allowed to sell its shares in EMICS Thailand to its own parent company Thai Reinsurance Pub Co Ltd (THRE TB) in a related transaction. in RATCH: Electricity Generator Continues to Expand, Dr. Andrew Stotz, CFA works his magic on Ratchaburi Elec Gen Hodg Pub (RATCH TB), whose major revenue contributor is domestic electricity engineering comprising 95% of total revenue.  The company's our new projects should increase RATCH’s capacity by 14% to 7,373MW by 2021, which in turn could boost top-line growth. In his on the ground insight, Blue Bird - Multiple Nesting Sites, Jakarta veteran Angus Mackintosh suggests that Blue Bird Tbk Pt (BIRD IJ) remains an interesting proxy for rising middle-class consumption in Indonesia. In his Insight, Philippines: Politicking Endangers Reforms, Nicholas Chia suggests that a watered down tax reform in the Philippines could put growth at risk. In Singapore Residential Sector: Would Minsky Buy a Unit Now?, property specialist Will Tan, CAIA  notes that the enbloc sales fever is now on and with the first uptick in private home price increase after 15 quarters of sequential decline in 3Q17, many market watchers are saying this marks the start the recovery in the private residential market. In his Insight, Singapore: More Evidence of Upsides to Economic Growth, Nicholas Chia examines the evidence for the prospect of higher economic growth in Singapore, with a revival in homes prices coming through and higher bank lending growth again in August, marking eleven months of expansion. On the whole, the recent data releases align with his narrative of a strong 3Q17 performance.In Discover Singapore: Fu Yu (FUYU SP); 67% of Mkt Cap Is Cash, Trading Below Book and Offers 8% Yield, Nicolas Van Broekhoven looks at this Singapore based precision plastics solutions provider. The company has seen declining revenues for the last five years, as the management shed loss-making businesses, though net profits have been rising and cost-cutting takes effect. In Tenaga Nasional Placement - A Small Deal Size Relative to Previous Sell Down, our own Toh Zhen Zhou comments on an institutional fund manager's sale of 35m shares in Tenaga Nasional Bhd (TNB MK) worth approximately US$115m. In Lodging in Singapore, our friends at Euromonitor International Ltd. comment on lodging in Singapore which underperformed in 2017, with value sales of SGD4.9 billion representing a 2% fall from the previous year.In AOT: Airport Services Ready to Fly High, Dr. Andrew Stotz, CFA writes on Airports Of Thailand Pcl (AOT TB) which draws its income from two streams, namely aeronautical and non-aeronautical revenue.  Several renovations and developments of its airports planned for the next 5-7 years should improve efficiency and service quality, as well as an increased current total 100m passenger capacity by an estimated 80%. AOT trades above ASEAN transportation at 5.3x FY18E PBV but offers a much better ROE.In Wijaya Karya:  A Leading Infrastructure Contractor, Johannes Salim, CFA comments on Wijaya Karya Persero Tbk Pt (WIKA IJ) which has proven that it can win high profile infrastructure projects, such as the Jakarta-Bandung High-Speed Railway won recently. From a valuation perspective, WIKA trades at an inexpensive 10.1x 2018 PE.In A Broader View of Thai Bank Credit Quality, Financial specialist Daniel Tabbush looks at not just the four or five mainstream listed banks in Thailand but also includes small banks, government specialized banks and foreign banks with reasonably populated financial data, which brings the total to 25 banks. He examines credit quality metrics ahead of upcoming results on 21st October, taking into account all Thai banks. Specifically, he looks at some meaningful divergence in trends of bad loan growth, as well as bad loan ratios. In The Best of August / September Company Visits, Athaporn Arayasantiparb, CFA  plucks out is top five picks from around 30 company visits during the past two months, which include; Forth Corp Pcl (FORTH TB), Erawan Group (ERW TB), Ananda Development Pcl (ANAN TB), Thaire Life Assurance Pcl (THREL TB) and Aapico Hitech Pcl (AH TB).  In S-REITs: Cautionary Short Term in View of the Interest Rate Front, Will Tan, CAIA examines whether the prospects of rates hikes will lead to a repeat of history going back to 2015. In Discover Singapore: Frencken, Still at Discount to Peers After YTD Performance, 65% Upside to Be Had, Nicolas Van Broekhoven writes on Singapore listed Frencken Group Ltd (FRKN SP). The company is a global precision engineering firm that serves customers in automotive, healthcare, industrial and semiconductor industries. In City Development Seeks to Privatise Majority-Owned Millennium and Copthorne, our friends at Morningstar comment on City Developments Ltd (CIT SP), which has reached an agreement on the price to acquire the remaining 35% stake of Millennium &amp; Copthorne Hotels (MLC LN), it does not already own. 

The Week that Was in ASEAN@Smartkarma - Hybrids, Taxis, and Airports