ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

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

Equity Bottom-Up

XLSMART Telecom Sejahtera / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a> continues to see strong growth in data revenues and traffic with data -pricing improving in 4Q2021 and consumers taking more.</li>
<li>The company continues to stress its aim to be the number one convergent operator and the successful completion of the <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> acquisition accelerates this move.</li>
<li>
<a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata</a> continues to raise data prices and will start to see synergies from <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net</a> from 3Q2022, including potential cost and revenue benefits. Valuations are attractive. </li>
</ul>



XL Axiata (EXCL IJ) continues to see strong growth in data revenues and traffic with data -pricing improving in 4Q2021 and consumers taking more.
The company continues to stress its aim to be the number one convergent operator and the successful completion of the Link Net (LINK IJ) acquisition accelerates this move.

XL Axiata continues to raise data prices and will start to see synergies from Link Net from 3Q2022, including potential cost and revenue benefits. Valuations are attractive. 


XL Axiata (EXCL IJ) - Converging on Homes and Offices

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The parent company of <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> has announced a plan to increase its holding. This is better than a poke in the eye with a sharp stick. </li>
<li>
<a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a> is inexpensive, even for a cross-border, possibly-difficult-to-short subsidiary, Holdco situation. </li>
<li>The BHP LN vs BHP AU unification should cause US$40bn of rebalance trading across the major indices. Other indices will simply roll their exposure from PLC to Limited without trading. </li>
</ul>


The parent company of China Mobile (941 HK) has announced a plan to increase its holding. This is better than a poke in the eye with a sharp stick. 

Wilmar International (WIL SP) is inexpensive, even for a cross-border, possibly-difficult-to-short subsidiary, Holdco situation. 
The BHP LN vs BHP AU unification should cause US$40bn of rebalance trading across the major indices. Other indices will simply roll their exposure from PLC to Limited without trading. 


Last Week in Event SPACE: China Mobile, Wilmar, BHP, Link Net, Hollysys, GJ Steel, Guodian Tech, ASX

<ul>
<li>There are currently 47 - mostly firm - transactions currently being discussed and analysed on Smartkarma.</li>
<li>Three new deals were discussed this week: <a href="https://www.smartkarma.com/entities/guodian-technology-environment-group-corp" target="_blank" data-smartkarma-citation="entities:3941:1" rel="noopener">Guodian Technology &amp; Environment Group (1296 HK)</a>, <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a>, and <a href="https://www.smartkarma.com/entities/g-j-steel-pcl" target="_blank" data-smartkarma-citation="entities:14759:1" rel="noopener">G J Steel PCL (GJS TB)</a>.</li>
<li>Keys updates took place for: <a href="https://www.smartkarma.com/entities/over-the-wire-holdings-ltd" target="_blank" data-smartkarma-citation="entities:30653:1" rel="noopener">Over the Wire Holdings Ltd (OTW AU)</a>, <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>, <a href="https://www.smartkarma.com/entities/china-logistics-property-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:22799:1" rel="noopener">China Logistics Property Holdings (1589 HK)</a>, <a href="https://www.smartkarma.com/entities/akm-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:7206:1" rel="noopener">AKM Industrial (1639 HK)</a>, and <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937:1" rel="noopener">ARA LOGOS (ALLT SP)</a>.</li>
</ul>


There are currently 47 - mostly firm - transactions currently being discussed and analysed on Smartkarma.
Three new deals were discussed this week: Guodian Technology &amp; Environment Group (1296 HK), Link Net (LINK IJ), and G J Steel PCL (GJS TB).
Keys updates took place for: Over the Wire Holdings Ltd (OTW AU), Razer Inc (1337 HK), China Logistics Property Holdings (1589 HK), AKM Industrial (1639 HK), and ARA LOGOS (ALLT SP).


Asia-Pac Weekly Risk Arb Summary: Razer, Link Net, ARA LOGOS, Guodian Tech, GJ Steel

<ul>
<li>
<a href="https://www.smartkarma.com/entities/axiata-group-berhad" target="_blank" data-smartkarma-citation="entities:944:1" rel="noopener">Axiata Group (AXIATA MK)</a> has entered into conditional SPAs with Asia Link Dewa and PT First Media to acquire 1.82 billion shares, or 66.03% in <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a>. </li>
<li>The purchase consideration is IDR4,800/share. Upon completion of the acquisition, Axiata will be obligated to make a mandatory tender offer (MTO).</li>
<li>Axiata expects to complete the proposal, which is subject to regulatory and shareholder approvals, by the third quarter of 2022.</li>
</ul>



Axiata Group (AXIATA MK) has entered into conditional SPAs with Asia Link Dewa and PT First Media to acquire 1.82 billion shares, or 66.03% in Link Net (LINK IJ). 
The purchase consideration is IDR4,800/share. Upon completion of the acquisition, Axiata will be obligated to make a mandatory tender offer (MTO).
Axiata expects to complete the proposal, which is subject to regulatory and shareholder approvals, by the third quarter of 2022.


<a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> released its IH2021 results with revenue growth of +11.7% YoY and with EBITDA growth of +17.1% YoY.  Revenue in 2Q2021 saw an increase of +11.9% YoY, whilst EBITDA  increased +13.3% YoY.
The company's Average Revenue Per User (ARPU) remained stable at IDR351,000 per subscriber per month.
The enterprise business continued its recovery, with +26% YoY growth in 2Q2021, with ongoing success in targeting those customers least affected by the pandemic.
At end of 3Q2021, the company's total network reached 2.8m home passes and <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> added a total of 21,000 new net subscribers for 9M2021 but 2Q and 3Q were low, partially due to higher churn.
<a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> had, as of the end of September, completed close to 50% of its pole migration project and is on target to be finished by May 2022.
<a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a> continues its discussions to acquire a controlling stake in <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ),</a> with the potential sellers being CVC and <a href="https://www.smartkarma.com/entities/first-media-tbk-pt" target="_blank" data-smartkarma-citation="entities:11826:1" rel="noopener">First Media (KBLV IJ)</a> (Lippo Group) but the parties have yet to agree on a price.
<div class="content-highlight">
<a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> remains attractive as a proxy for the low penetration rates for high-speed fixed broadband and its position as the best quality provider in terms of network quality and its content offering. Valuations look attractive with the company trading at a significant discount to regional peers.
</div>

Link Net (LINK IJ) released its IH2021 results with revenue growth of +11.7% YoY and with EBITDA growth of +17.1% YoY.  Revenue in 2Q2021 saw an increase of +11.9% YoY, whilst EBITDA  increased +13.3% YoY.
The company's Average Revenue Per User (ARPU) remained stable at IDR351,000 per subscriber per month.
The enterprise business continued its recovery, with +26% YoY growth in 2Q2021, with ongoing success in targeting those customers least affected by the pandemic.
At end of 3Q2021, the company's total network reached 2.8m home passes and Link Net (LINK IJ) added a total of 21,000 new net subscribers for 9M2021 but 2Q and 3Q were low, partially due to higher churn.
Link Net (LINK IJ) had, as of the end of September, completed close to 50% of its pole migration project and is on target to be finished by May 2022.
XL Axiata (EXCL IJ) continues its discussions to acquire a controlling stake in Link Net (LINK IJ), with the potential sellers being CVC and First Media (KBLV IJ) (Lippo Group) but the parties have yet to agree on a price.

Link Net (LINK IJ) remains attractive as a proxy for the low penetration rates for high-speed fixed broadband and its position as the best quality provider in terms of network quality and its content offering. Valuations look attractive with the company trading at a significant discount to regional peers.


Link Net (LINK IJ) - Profitability Intact but Shy on Subscribers

Malaysia

Axiata Group Berhad is a telecommunication company.  The Company's main activities is the establishment, maintenance, and provision of telecommunications and related services.

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Axiata Group (AXIATA MK)

XL Axiata (EXCL IJ) - Converging on Homes and Offices

XL Axiata continues to raise data prices and will start to see synergies from the Link Net acquisition from 3Q2022, including potential cost and...

Angus Mackintosh

Last Week in Event SPACE: China Mobile, Wilmar, BHP, Link Net, Hollysys, GJ Steel, Guodian Tech, ASX

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Asia-Pac Weekly Risk Arb Summary: Razer, Link Net, ARA LOGOS, Guodian Tech, GJ Steel

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Link Net (LINK IJ): Axiata's MTO

Currently, trading at a gross/annualised spread of 10.0%/16.6%. I'd get involved here either for the arb, or to play the back-end.

David Blennerhassett

Link Net (LINK IJ) - Profitability Intact but Shy on Subscribers

Link Net (LINK IJ) remains attractive as a proxy for the low penetration rates for high-speed fixed broadband in Indonesia as the best quality...

Angus Mackintosh

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