Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

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

Equity Bottom-Up

It has been almost two years since we last wrote about <a href="https://www.smartkarma.com/entities/geo-energy-resources-ltd" target="_blank" data-smartkarma-citation="entities:8717:1" rel="noopener">Geo Energy Resources (GERL SP)</a>. Our last insight can be found here <a href="https://www.smartkarma.com/insights/geo-energy-gerl-sp-distressed-bonds-and-share-price-versus-optimistic-management-who-is-right" target="_blank" data-smartkarma-citation="insights:34887" rel="noopener">Geo Energy (GERL SP): Distressed Bonds and Share Price Versus Optimistic Management; Who Is Right?</a> How things have changed!Back in late 2019, the coal price was hovering between 20-30 USD, Macquarie had bought 5% of the company for 0.29 SGD/share in November 2018 and Geo was generating losses as the coal price was below its cost of production. Entering 4Q21 the coal price is at stratospheric highs (117 USD for October 2021 delivery) and Geo is earning record profits.In a public disclosure, the company announced it made 26.5M USD in EBITDA in July 2021 alone. This was with coal prices around +/-50 USD/ton. Today coal prices are well over 100 USD. We estimate at current prices Geo is making at least 45M-50M USD in EBITDA every month! Compare this to the market cap of 320M USD currently. In 2H EBITDA at current market prices could total +/- 225M USD alone. 1H2021 EBITDA was 78M USD. Recall, Geo has no debt and 60M USD in cash.Mr. Market is slowly waking up to this reality pushing the stock up over 70% YTD (most of the gain came in the last few trading sessions). Many Indonesian-listed peers such as <a href="https://www.smartkarma.com/entities/adaro-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:6061:1" rel="noopener">Adaro Energy (ADRO IJ)</a>, <a href="https://www.smartkarma.com/entities/tambang-batubara-bukit-asam" target="_blank" data-smartkarma-citation="entities:1189:1" rel="noopener">Tambang Batubara Bukit Asam (PTBA IJ)</a>, and coal contractor <a href="https://www.smartkarma.com/entities/united-tractors-tbk-pt" target="_blank" data-smartkarma-citation="entities:698:1" rel="noopener">United Tractors (UNTR IJ)</a> have also underperformed vs the underlying commodity.  However, this is not true of US-listed peers such as <a href="https://www.smartkarma.com/entities/consol-energy-inc-61c2f282-fc00-497d-9066-606d78f6fe82" target="_blank" data-smartkarma-citation="entities:26245:1" rel="noopener">Consol Energy (CEIX US)</a> and <a href="https://www.smartkarma.com/entities/peabody-energy-corp" target="_blank" data-smartkarma-citation="entities:6430:1" rel="noopener">Peabody Energy (BTU US)</a> which are up 345% and 606% respectively YTD.We expect a 4Q21 catch-up trade-in Indonesian-related coal names that could be violent. While prices will surely cool off in 2022 they might not drop all the way below the cost of production once again. Geo has a 30% dividend policy so investors are sure to see massive dividends (est. 18% div yield) come March 2022. Board member Jim Rogers should hopefully make sure the cash is not squandered on doing an expensive M&amp;A deal but is returned to shareholders.

It has been almost two years since we last wrote about Geo Energy Resources (GERL SP). Our last insight can be found here Geo Energy (GERL SP): Distressed Bonds and Share Price Versus Optimistic Management; Who Is Right? How things have changed!Back in late 2019, the coal price was hovering between 20-30 USD, Macquarie had bought 5% of the company for 0.29 SGD/share in November 2018 and Geo was generating losses as the coal price was below its cost of production. Entering 4Q21 the coal price is at stratospheric highs (117 USD for October 2021 delivery) and Geo is earning record profits.In a public disclosure, the company announced it made 26.5M USD in EBITDA in July 2021 alone. This was with coal prices around +/-50 USD/ton. Today coal prices are well over 100 USD. We estimate at current prices Geo is making at least 45M-50M USD in EBITDA every month! Compare this to the market cap of 320M USD currently. In 2H EBITDA at current market prices could total +/- 225M USD alone. 1H2021 EBITDA was 78M USD. Recall, Geo has no debt and 60M USD in cash.Mr. Market is slowly waking up to this reality pushing the stock up over 70% YTD (most of the gain came in the last few trading sessions). Many Indonesian-listed peers such as Adaro Energy (ADRO IJ), Tambang Batubara Bukit Asam (PTBA IJ), and coal contractor United Tractors (UNTR IJ) have also underperformed vs the underlying commodity.  However, this is not true of US-listed peers such as Consol Energy (CEIX US) and Peabody Energy (BTU US) which are up 345% and 606% respectively YTD.We expect a 4Q21 catch-up trade-in Indonesian-related coal names that could be violent. While prices will surely cool off in 2022 they might not drop all the way below the cost of production once again. Geo has a 30% dividend policy so investors are sure to see massive dividends (est. 18% div yield) come March 2022. Board member Jim Rogers should hopefully make sure the cash is not squandered on doing an expensive M&amp;A deal but is returned to shareholders.

Geo Energy: Indonesian Coal Market Beneficiary Trading at Distressed Multiple

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-6061'>Adaro Energy</a></li><li><a href='#lucror-entity-8954'>Greentown China</a></li><li><a href='#lucror-entity-22202'>Vedanta Resources</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Adaro EnergyGreentown ChinaVedanta Resources

Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Cross Asset Strategy

<ul>
<li>The Past week saw insights on <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a>, <a href="https://www.smartkarma.com/entities/grab-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab Holdings (GRAB US),</a><a href="https://www.smartkarma.com/entities/industri-jamu-dan-farmasi-sido-muncul-tbk-pt" target="_blank" data-smartkarma-citation="entities:6033:1" rel="noopener">Sido Muncul (SIDO IJ)</a>, <a href="https://www.smartkarma.com/entities/pt-matahari-department-store" target="_blank" data-smartkarma-citation="entities:5230:1" rel="noopener">Matahari Department Store</a>, <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> and <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a>.</li>
<li>There was also a macro insight on the Thai Economy and further insights on <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>, <a href="https://www.smartkarma.com/entities/bumrungrad-hospital-pub-co" target="_blank" data-smartkarma-citation="entities:883:1" rel="noopener">Bumrungrad Hospital Pub Co (BH TB)</a>, and UNOAsia in the Philippines. </li>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.</li>
</ul>


The Past week saw insights on GoTo, Grab Holdings (GRAB US),Sido Muncul (SIDO IJ), Matahari Department Store, BFI Finance Indonesia (BFIN IJ) and Astra International (ASII IJ).
There was also a macro insight on the Thai Economy and further insights on Comfortdelgro Corp (CD SP), Bumrungrad Hospital Pub Co (BH TB), and UNOAsia in the Philippines. 
The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.


The Week That Was in ASEAN@Smartkarma - GoTo & Grab, BFIN's Rising, and Astra Intl's Oversold

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-6061'>Adaro Energy</a></li><li><a href='#lucror-entity-35'>China Jinmao Holdings</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Adaro EnergyChina Jinmao Holdings

Morning Views Asia: Adaro Energy, China Jinmao Holdings

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/lippo-malls-indonesia-retail-trust' target='_blank' rel='noopener'>Lippo Malls Indonesia Retail Trust</a></li><li><a href='/entities/vedanta-resources-ltd' target='_blank' rel='noopener'>Vedanta Resources</a></li><li><a href='/entities/renew-energy-global-plc' target='_blank' rel='noopener'>ReNew Energy Global </a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/geely-automobile-holdings-ltd' target='_blank' rel='noopener'>Geely Auto</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Lippo Malls Indonesia Retail TrustVedanta ResourcesReNew Energy Global China Jinmao HoldingsGeely Autoand more...

Indonesia

PT Adaro Energy Tbk is a coal mining company. The Company and its subsidiaries currently deal in coal mining and trade, coal infrastructure and logistics, and mining contractor services.

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Adaro Energy (ADRO IJ)

Geo Energy: Indonesian Coal Market Beneficiary Trading at Distressed Multiple

GEO has run 70% YTD but has lagged US-listed coal peers such as Consol and Peabody which are up respectively 345% and 606% YTD. We expect a violent...

Nicolas Van Broekhoven

Morning Views Asia: Adaro Energy, Greentown China, Vedanta Resources

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

The Week That Was in ASEAN@Smartkarma - GoTo & Grab, BFIN's Rising, and Astra Intl's Oversold

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity...

Angus Mackintosh

Morning Views Asia: Adaro Energy, China Jinmao Holdings

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Weekly Wrap - 19 Jan 2024

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

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