Chairman, sgtradex

Tan Chin-Hwee

Chairman

Thematic (Sector/Industry)

The discourse on Asia&rsquo;s &ldquo;rise&rdquo; is dominated by China and India, countries whose vast populations and buoyant economies have captured the imagination of international investors, journalists and policy analysts.&ldquo;Chindia&rdquo;-scented rhetoric abounds with catchphrases that state the obvious, but whose import is less so. China has the hardware, India the software; India needs China&rsquo;s roads, China could do with India&rsquo;s political inclusiveness. Given how fundamentally different India and China are, though, such &ldquo;lessons learnt&rdquo; are of limited value.The more relevant comparison in Asia &ndash; and one with enormous implications for the global economy &ndash; is between India and its civilisational sibling, Indonesia. These two eclectic democracies share more in common than India and China, yet they are rarely hyphenated.Last year&rsquo;s elections saw the elevation of a new breed of popular leader in both countries. Narendra Modi, whose family ran a tea stall, has risen from near the bottom of India&rsquo;s caste and class hierarchies. Joko Widodo is from a similarly underprivileged background.

The discourse on Asia&rsquo;s &ldquo;rise&rdquo; is dominated by China and India, countries whose vast populations and buoyant economies have captured the imagination of international investors, journalists and policy analysts.&ldquo;Chindia&rdquo;-scented rhetoric abounds with catchphrases that state the obvious, but whose import is less so. China has the hardware, India the software; India needs China&rsquo;s roads, China could do with India&rsquo;s political inclusiveness. Given how fundamentally different India and China are, though, such &ldquo;lessons learnt&rdquo; are of limited value.The more relevant comparison in Asia &ndash; and one with enormous implications for the global economy &ndash; is between India and its civilisational sibling, Indonesia. These two eclectic democracies share more in common than India and China, yet they are rarely hyphenated.Last year&rsquo;s elections saw the elevation of a new breed of popular leader in both countries. Narendra Modi, whose family ran a tea stall, has risen from near the bottom of India&rsquo;s caste and class hierarchies. Joko Widodo is from a similarly underprivileged background.

The Rise of Asia: India and Indonesia's Shared Challenges and Opportunities.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

As a part of our Long Term Leaders vertical, we would like to discuss Unilever Indonesia (UNVR), which continues to be a leading provider of consumer staples in the country, however, the recent price action implies that the stock is being overvalued at the current juncture: <ul><li>UNVR is trading close to its highest p/e levels (44x), having outperformed JCI index by 12% in the past six months and by 10% YTD, its also outperformed the JAKCONS index by 7% YTD and over the past six months. In our view, fundamentals don't support the current valuations as recent price performance has increasingly been driven by p/e multiple expansion with little or no signs of earnings playing catch-up.</li><li>Analysts continue to remain negative on the stock, and have been cutting earnings estimates. Moreover, with another royalty hike scheduled for 2015, we see little room for a meaningful upside surprise in earnings in the near term.  </li><li>While the long-term potential of the stock remains unquestionable, given the large population base, however, considering the macro is more favourable for cyclicals (steady/declining inflation, stable Rupiah, more infrastructure spending etc), we would be more inclined to switch into cyclicals for now.</li></ul>

As a part of our Long Term Leaders vertical, we would like to discuss Unilever Indonesia (UNVR), which continues to be a leading provider of consumer staples in the country, however, the recent price action implies that the stock is being overvalued at the current juncture: UNVR is trading close to its highest p/e levels (44x), having outperformed JCI index by 12% in the past six months and by 10% YTD, its also outperformed the JAKCONS index by 7% YTD and over the past six months. In our view, fundamentals don't support the current valuations as recent price performance has increasingly been driven by p/e multiple expansion with little or no signs of earnings playing catch-up.Analysts continue to remain negative on the stock, and have been cutting earnings estimates. Moreover, with another royalty hike scheduled for 2015, we see little room for a meaningful upside surprise in earnings in the near term.  While the long-term potential of the stock remains unquestionable, given the large population base, however, considering the macro is more favourable for cyclicals (steady/declining inflation, stable Rupiah, more infrastructure spending etc), we would be more inclined to switch into cyclicals for now. 

Unilever Indonesia (UNVR IJ) - Priced beyond perfection, time to switch

Indonesia

PT Unilever Indonesia Tbk manufactures soaps, detergents, margarine, oil and dairy based foods, tea based beverages, ice cream, and cosmetics.

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Unilever Indonesia (UNVR IJ)

The Rise of Asia: India and Indonesia's Shared Challenges and Opportunities.

The discourse on Asia’s “rise” is dominated by China and India, countries whose vast populations and buoyant economies have captured the...

Tan Chin-Hwee

Unilever Indonesia (UNVR IJ) - Priced beyond perfection, time to switch

As a part of our Long Term Leaders vertical, we would like to discuss Unilever Indonesia (UNVR), which continues to be a leading provider of...

Sumeet Singh

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52-week Range

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