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

Thematic (Sector/Industry)

<ul>
<li>2021's vintage of my 5 High Convictions Ideas did extremely well</li>
<li>
<a href="https://www.smartkarma.com/entities/pc-partner-group-ltd" target="_blank" data-smartkarma-citation="entities:8492:1" rel="noopener">PC Partner (1263 HK)</a> was up 543%, <a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> was up 80%, <a href="https://www.smartkarma.com/entities/straits-trading-co-ltd" target="_blank" data-smartkarma-citation="entities:15745:1" rel="noopener">Straits Trading (STRTR SP)</a> was up almost 74% and Shougang Fushan just under 40%.</li>
<li>The underperformer award goes to HK restaurant operator <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet Group Ltd (8371 HK)</a> as it declined 25%. Below the fold we'll give our 5 High Conviction Ideas for 2022.</li>
</ul>


2021's vintage of my 5 High Convictions Ideas did extremely well

PC Partner (1263 HK) was up 543%, Rex International Holding (REXI SP) was up 80%, Straits Trading (STRTR SP) was up almost 74% and Shougang Fushan just under 40%.
The underperformer award goes to HK restaurant operator Taste Gourmet Group Ltd (8371 HK) as it declined 25%. Below the fold we'll give our 5 High Conviction Ideas for 2022.


Overview of My Winners and Losers in 2021... And 5 High Conviction Ideas Going Into 2022

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>UMS Holdings is a beneficiary of continued strong global demand for semiconductor chips and equipment. </li>
<li>The company had excellent results in 3Q 2021. Its total sales rose by 50% YoY to SGD 67.6 million net profit also increased by 17% YoY in 3Q 2021.</li>
<li>There has been an increasing bullish sentiment on the global aerospace sector and the company's tuck-in acquisitions in the aerospace sector in the past several years now appear more attractive.</li>
</ul>


UMS Holdings is a beneficiary of continued strong global demand for semiconductor chips and equipment. 
The company had excellent results in 3Q 2021. Its total sales rose by 50% YoY to SGD 67.6 million net profit also increased by 17% YoY in 3Q 2021.
There has been an increasing bullish sentiment on the global aerospace sector and the company's tuck-in acquisitions in the aerospace sector in the past several years now appear more attractive.


UMS Holdings: Attractive Valuations & Continued Strong Global Demand for Semiconductor Equipment

<ul>
<li>AEM raises guidance significantly for FY21 and the outlook is bullish on FY22</li>
<li>New customer wins to start showing up in financials by 2H22</li>
<li>8 SGD Fair Value (20x 0.40 FY22 EPS or 84% upside)</li>
</ul>


AEM raises guidance significantly for FY21 and the outlook is bullish on FY22
New customer wins to start showing up in financials by 2H22
8 SGD Fair Value (20x 0.40 FY22 EPS or 84% upside)


Aem Holdings: Raises Guidance for FY21, New Customer Wins in FY22 to Drive Re-Rating to 8 SGD

Forensic Analyst

Jason Yap, CFA

Forensic Accounting

<a href="https://www.smartkarma.com/entities/nanofilm-technologies-international" target="_blank" data-smartkarma-citation="entities:29700:1" rel="noopener">Nanofilm (NANO SP)</a> is a Singapore-based nanotechnology solutions provider. Its principal business is the manufacturing and distribution of advanced materials and nanoproducts for the consumer electronics, communications, and automotive industries.Founded in 1999 by Executive Chairman Dr Shi Xu, who was then an associate professor at Nanyang Technology University (NTU)'s School of Electrical and Electronic Engineering, Nanofilm raised approximately SGD470.1 million in IPO proceeds in October 2020.During its short history as a public company, the company had to endure significant regulator and investor scrutiny following sub-par H1 2021 results and senior management changes, including the abrupt resignations of former CEO, Mr Lee Liang Huang and former COO, Mr Ricky Tan, in quick succession (June and August 2021 respectively). Dr Shi, assumed the role of interim CEO, until the <a href="https://www.businesstimes.com.sg/companies-markets/nanofilm-appoints-new-ceo-says-it-continues-to-see-growth-momentum-for-business#:~:text=MAINBOARD%2DLISTED%20Nanofilm%20Technologies%20International,on%20Thursday%20(Oct%2014)." target="_blank" rel="noopener">recent appointment</a> of Mr Gary Ho Hock Yong, as Nanofilm's CEO.  Dr Shi served as the company's CEO from 1999 to 2017. On 14 October 2021, Nanofilm provided a business update for Q3 2021, which highlighted continued growth momentum despite a volatile business environment, amid the COVID-19 pandemic and supply chain disruptions. In this Insight, we examine Nanofilm's financial and business risks based on its IPO prospectus disclosures and certain new risks that emerged given latest available facts and developments, including but not limited to the following: <ol>
<li>High Customer Concentration  </li>
<li>Competition from Alternative Products and Solutions</li>
<li>Significant Management Changes </li>
<li>Management Share Disposals </li>
</ol>Accordingly, we highlight the key areas of concern for investors.

Nanofilm (NANO SP) is a Singapore-based nanotechnology solutions provider. Its principal business is the manufacturing and distribution of advanced materials and nanoproducts for the consumer electronics, communications, and automotive industries.Founded in 1999 by Executive Chairman Dr Shi Xu, who was then an associate professor at Nanyang Technology University (NTU)'s School of Electrical and Electronic Engineering, Nanofilm raised approximately SGD470.1 million in IPO proceeds in October 2020.During its short history as a public company, the company had to endure significant regulator and investor scrutiny following sub-par H1 2021 results and senior management changes, including the abrupt resignations of former CEO, Mr Lee Liang Huang and former COO, Mr Ricky Tan, in quick succession (June and August 2021 respectively). Dr Shi, assumed the role of interim CEO, until the recent appointment of Mr Gary Ho Hock Yong, as Nanofilm's CEO.  Dr Shi served as the company's CEO from 1999 to 2017. On 14 October 2021, Nanofilm provided a business update for Q3 2021, which highlighted continued growth momentum despite a volatile business environment, amid the COVID-19 pandemic and supply chain disruptions. In this Insight, we examine Nanofilm's financial and business risks based on its IPO prospectus disclosures and certain new risks that emerged given latest available facts and developments, including but not limited to the following: 
High Customer Concentration  
Competition from Alternative Products and Solutions
Significant Management Changes 
Management Share Disposals 
Accordingly, we highlight the key areas of concern for investors. 

Understanding Nanofilm (Nano SP)'s 3Cs - Customer Concentration, Competition and Management Changes

<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> reported weak results last week but subsequently announced a 103 million SGD investment by Temasek. The Temasek investment comes ahead of an expected strong 2H21 and 2022 but more importantly right ahead of probable new major customer wins. As well documented AEM is highly dependent on <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a> for 80% of its revenues and needs new customers to diversify. Management has quietly been forming new relationships and is in various trial phases with some of the largest semiconductor companies other than Intel. During 1Q21's conf call we first heard of management's growing optimism and this was again reiterated in 2Q21.On the 3Q20 call AEM's Chairman Loke Wai San was asked if he would consider a Nasdaq listing. His answer at the time was "once we get to a billion USD market cap we can consider it". The combination of the Temasek investment and the anticipated major new customer wins will likely get us there. In this regard <a href="https://www.straitstimes.com/business/companies-markets/sgx-and-nasdaq-extend-partnership-to-help-firms-access-capital" target="_blank" rel="noopener">please recall</a> that in July 2020 SGX and Nasdaq agreed to make "dual-listings" between both exchanges easier. What better company to kick-off this agreement than AEM?Fair Value increases to 8 SGD (20x P/E on 0.40 SGD FY22 EPS). Recall, AEM already earned 0.35 SGD EPS in 2020, so assuming new customer wins materialize 0.40 SGD is not a stretch.

AEM (AEM SP) reported weak results last week but subsequently announced a 103 million SGD investment by Temasek. The Temasek investment comes ahead of an expected strong 2H21 and 2022 but more importantly right ahead of probable new major customer wins. As well documented AEM is highly dependent on Intel Corp (INTC US) for 80% of its revenues and needs new customers to diversify. Management has quietly been forming new relationships and is in various trial phases with some of the largest semiconductor companies other than Intel. During 1Q21's conf call we first heard of management's growing optimism and this was again reiterated in 2Q21.On the 3Q20 call AEM's Chairman Loke Wai San was asked if he would consider a Nasdaq listing. His answer at the time was "once we get to a billion USD market cap we can consider it". The combination of the Temasek investment and the anticipated major new customer wins will likely get us there. In this regard please recall that in July 2020 SGX and Nasdaq agreed to make "dual-listings" between both exchanges easier. What better company to kick-off this agreement than AEM?Fair Value increases to 8 SGD (20x P/E on 0.40 SGD FY22 EPS). Recall, AEM already earned 0.35 SGD EPS in 2020, so assuming new customer wins materialize 0.40 SGD is not a stretch.

AEM: Temasek Investment + New Customers = Pre-Cursor to Nasdaq Listing? Fair Value to 8 SGD

Singapore

AEM Holdings Limited designs and manufactures semiconductor manufacturing equipment and related tooling parts and precision machining of components for semiconductor industry.  The Company also manufactures and distributes electronics, engineering, chemical and related products. AEM provides engineering services.

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AEM (AEM SP)

Overview of My Winners and Losers in 2021... And 5 High Conviction Ideas Going Into 2022

2021's vintage of 5 High Conviction Ideas did extremely well led by star performer Pc Partner. Our new selection for 2022 will hopefully have some...

Nicolas Van Broekhoven

UMS Holdings: Attractive Valuations & Continued Strong Global Demand for Semiconductor Equipment

Three key catalysts of UMS Holdings include continued strong global demand for semiconductor chips, bullish sentiment on the global aerospace...

Douglas Kim

Aem Holdings: Raises Guidance for FY21, New Customer Wins in FY22 to Drive Re-Rating to 8 SGD

AEM will soon cross the 1B USD market cap treshold attracting a new sort of investor base. Combine this with a bullish outlook for FY22 and all...

Nicolas Van Broekhoven

Understanding Nanofilm (Nano SP)'s 3Cs - Customer Concentration, Competition and Management Changes

In its short listed history, Nanofilm endured significant regulator and investor scrutiny following sub-par results, management share disposals and...

Jason Yap, CFA

AEM: Temasek Investment + New Customers = Pre-Cursor to Nasdaq Listing? Fair Value to 8 SGD

AEM remains a top pick as it digests the Temasek investment and gets ready to list on Nasdaq in 2022. Major new customer wins are likely as...

Nicolas Van Broekhoven

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