Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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)

For investors who are not based in Singapore, the mini lockdown in Singapore has started again due to the sudden increase in the number of community cases which previously was relatively under control. Before one thinks that it is a too-harsh of a policy, the rate of the increase of unlinked community cases in Singapore is high. This matters a lot because every Singapore residents need to check in every establishment using either an Identification card, Trace Together app, or token which has proved to be very effective as for months, most of the COVID-19 cases can be traced and therefore allows the government to take the necessary actions. 
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This time is different. Alongside the third wave that has hit India and Thailand, Singapore, too, is hit. The Singapore government's response to this is very much like the first lock-down (Circuit Breaker), that they minimize public interactions so that the number of community cases does not increase and provide them with the time to perform contact tracing thoroughly. 
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In this report, we identify that <a href="https://www.smartkarma.com/entities/sheng-siong-group-ltd" target="_blank" data-smartkarma-citation="entities:6824:1" rel="noopener">Sheng Siong (SSG SP)</a> , <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> and <a href="https://www.smartkarma.com/entities/singapore-post-ltd" target="_blank" data-smartkarma-citation="entities:150:1" rel="noopener">Singapore Post (SPOST SP)</a>as winners while <a href="https://www.smartkarma.com/entities/comfortdelgro-corp-ltd" target="_blank" data-smartkarma-citation="entities:497:1" rel="noopener">Comfortdelgro Corp (CD SP)</a> and <a href="https://www.smartkarma.com/entities/genting-singapore-ltd" target="_blank" data-smartkarma-citation="entities:439:1" rel="noopener">Genting Singapore (GENS SP)</a>as losers.

For investors who are not based in Singapore, the mini lockdown in Singapore has started again due to the sudden increase in the number of community cases which previously was relatively under control. Before one thinks that it is a too-harsh of a policy, the rate of the increase of unlinked community cases in Singapore is high. This matters a lot because every Singapore residents need to check in every establishment using either an Identification card, Trace Together app, or token which has proved to be very effective as for months, most of the COVID-19 cases can be traced and therefore allows the government to take the necessary actions. 

This time is different. Alongside the third wave that has hit India and Thailand, Singapore, too, is hit. The Singapore government's response to this is very much like the first lock-down (Circuit Breaker), that they minimize public interactions so that the number of community cases does not increase and provide them with the time to perform contact tracing thoroughly. 

In this report, we identify that Sheng Siong (SSG SP) , Sea Ltd (SE US) and Singapore Post (SPOST SP)as winners while Comfortdelgro Corp (CD SP) and Genting Singapore (GENS SP)as losers. 

Singapore Mini Lockdown: Winners and Losers

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>Revenue accelerated in 4Q21, even excluding the acquisition of Sun Art.</li>
<li>Operating profit increased YoY after adding back the anti-monopoly fine.</li>
<li>The stock price has fallen significantly from its high this year.</li>
<li>We set an upside of 18%.</li>
</ul>Our previous coverage on Alibaba:<ul>
<li>
<a href="https://www.smartkarma.com/insights/alibaba-baba-opens-store-in-tencent-wechat-a-surrender" target="_blank" data-smartkarma-citation="insights:50590" rel="noopener">Alibaba (BABA): Opens Store in Tencent WeChat - A Surrender</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/alibaba-baba-fined-2-78-billion-for-either-or-but-impact-is-neither-big-nor-long-term" target="_blank" data-smartkarma-citation="insights:50213" rel="noopener">Alibaba (BABA): Fined $2.78 Billion for “Either Or”, But Impact Is Neither Big Nor Long Term</a> </li>
</ul>


Revenue accelerated in 4Q21, even excluding the acquisition of Sun Art.
Operating profit increased YoY after adding back the anti-monopoly fine.
The stock price has fallen significantly from its high this year.
We set an upside of 18%.
Our previous coverage on Alibaba:

Alibaba (BABA): Opens Store in Tencent WeChat - A Surrender 

Alibaba (BABA): Fined $2.78 Billion for “Either Or”, But Impact Is Neither Big Nor Long Term 


Alibaba (BABA): 4Q21 Result, Not as Bad as It Looks

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

WM Tech Corporation / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/wm-tech-corporation" target="_blank" data-smartkarma-citation="entities:32976:1" rel="noopener">WM Tech Corporation (WMT HK)</a> is a leading fresh food and FMCG (fast-moving consumer goods) retailer in China through the Wumart and Metro China brands. It is the largest premium store-based fresh food and FMCG retailer in China with a 19.5% market share as measured by sales in 2020, according to Frost &amp; Sullivan. WM Tech counts <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> and <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> as shareholders. WM Tech has filed for an HKEx IPO to raise potentially $1 billion, according to press reports.  The confusing “WM Tech” holdco name is to emphasise that the proprietary technology platform (WDOS) is a key differentiation from other players in an increasingly competitive market. The technology platform is claimed to provide a unified data loop between the online and offline channels to maximize operational efficiency and greatly improve the shopping experience. <div class="content-highlight">The full adoption of this technology platform is viewed as the key to delivering synergies from the April 2020 acquisition of Metro China from <a href="https://www.smartkarma.com/entities/metro-ag" target="_blank" data-smartkarma-citation="entities:21673:1" rel="noopener">METRO AG (MEO GR)</a>. While WM Tech is not the only store-based retailer with a complete technology platform, Wumart’s performance suggests that there is some merit in the claim of technology differentiation. Overall, we believe that WM Tech’s fundamentals offer more positives than negatives.</div>

WM Tech Corporation (WMT HK) is a leading fresh food and FMCG (fast-moving consumer goods) retailer in China through the Wumart and Metro China brands. It is the largest premium store-based fresh food and FMCG retailer in China with a 19.5% market share as measured by sales in 2020, according to Frost &amp; Sullivan. WM Tech counts Tencent Holdings (700 HK) and Lenovo (992 HK) as shareholders. WM Tech has filed for an HKEx IPO to raise potentially $1 billion, according to press reports.  The confusing “WM Tech” holdco name is to emphasise that the proprietary technology platform (WDOS) is a key differentiation from other players in an increasingly competitive market. The technology platform is claimed to provide a unified data loop between the online and offline channels to maximize operational efficiency and greatly improve the shopping experience. The full adoption of this technology platform is viewed as the key to delivering synergies from the April 2020 acquisition of Metro China from METRO AG (MEO GR). While WM Tech is not the only store-based retailer with a complete technology platform, Wumart’s performance suggests that there is some merit in the claim of technology differentiation. Overall, we believe that WM Tech’s fundamentals offer more positives than negatives.

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

We have dug into <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> consensus forecasts and believe that estimates may be too optimistic in relation to operating profit due to a number of factors. More details can be found below the fold.

We have dug into Alibaba Group (9988 HK) consensus forecasts and believe that estimates may be too optimistic in relation to operating profit due to a number of factors. More details can be found below the fold. 

Alibaba – Potential Flaws in Consensus Forecasts?

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Given the significant uncertainty surrounding 1) the impact that a regulatory-induced restructuring could have on the eventually listed <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a>, and 2) the full final impact of increased anti-monopoly regulatory efforts from the State Administration for Market Regulation (SAMR) on the <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, it has been difficult to assess a fair valuation level for the company. Following the indefinite suspension of Ant Group’s IPO, in November 2020, we witnessed a c.30% sell-off (or $260bn!) in Alibaba Group’s share price, before starting its recovery back to current levels, triggered by the reappearance of Jack Ma and a solid earnings report for the quarter ended December 2020. The net result, however, has been a roughly 17% (or $140bn) decline in Alibaba’s listed value. In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts valuation to assess what implied value is currently priced in for their equity holding in Ant Group, and what can be deduced from the current valuation for their Core Commerce operations.

Given the significant uncertainty surrounding 1) the impact that a regulatory-induced restructuring could have on the eventually listed Ant Group (6688 HK), and 2) the full final impact of increased anti-monopoly regulatory efforts from the State Administration for Market Regulation (SAMR) on the Alibaba Group (9988 HK), it has been difficult to assess a fair valuation level for the company. Following the indefinite suspension of Ant Group’s IPO, in November 2020, we witnessed a c.30% sell-off (or $260bn!) in Alibaba Group’s share price, before starting its recovery back to current levels, triggered by the reappearance of Jack Ma and a solid earnings report for the quarter ended December 2020. The net result, however, has been a roughly 17% (or $140bn) decline in Alibaba’s listed value. In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts valuation to assess what implied value is currently priced in for their equity holding in Ant Group, and what can be deduced from the current valuation for their Core Commerce operations.

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

Hong Kong

Sun Art Retail Group Ltd. operates hypermarkets.  The Company retails food and offers amenities such as restaurants, automated teller machines, pharmacies and dry cleaners.

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Sun Art Retail (6808 HK)

Singapore Mini Lockdown: Winners and Losers

In this report, we identify that Sheng Siong (SSG SP) , Sea Ltd (SE US) and Singapore Post (SPOST SP)as winners while Comfortdelgro Corp (CD SP)...

Henry Soediarko

Alibaba (BABA): 4Q21 Result, Not as Bad as It Looks

Revenue accelerated in 4Q21, even excluding the acquisition of Sun Art. Operating profit increased YoY after adding back the anti-monopoly fine.

Ming Lu

WM Tech IPO Initiation: Food for Thought

WM Tech has filed for an HKEx IPO to raise potentially $1 billion, according to press reports. Overall, we believe that WM Tech’s fundamentals...

Arun George

Alibaba – Potential Flaws in Consensus Forecasts?

We have dug into Alibaba Group (9988 HK) consensus forecasts and believe that estimates may be too optimistic in relation to operating profit due...

Rickin Thakrar

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts to assess the implied value for their equity holding in Ant Group, and what can...

Wium Malan, CFA

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