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

Thematic (Sector/Industry)

<ul>
<li>This year's Jakarta Fair was a spectacle with large crowds, who were spending as well as enjoying all the discounted food on offer and viewing new products on show.</li>
<li>The highlights from the show were a plethora of 2W and 4W EVs, a notable presence from dairy players, and many financing options being offered by multi-finance and fintech players. </li>
<li>In the consumer sector, we like <a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa</a>, <a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia</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/cisarua-mountain-dairy-pt-tbk" target="_blank" data-smartkarma-citation="entities:34999:1" rel="noopener">Cisarua Mountain Dairy</a> (Cimory), <a href="https://www.smartkarma.com/entities/ultrajaya-milk-industry-trading-company" target="_blank" data-smartkarma-citation="entities:13892:1" rel="noopener">Ultrajaya Milk</a>, <a href="https://www.smartkarma.com/entities/nippon-indosari-corpindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:1181:1" rel="noopener">PT Nippon Indosari Corpindo</a> (ROTI), and <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International</a>, for auto exposure.</li>
</ul>


This year's Jakarta Fair was a spectacle with large crowds, who were spending as well as enjoying all the discounted food on offer and viewing new products on show.
The highlights from the show were a plethora of 2W and 4W EVs, a notable presence from dairy players, and many financing options being offered by multi-finance and fintech players. 
In the consumer sector, we like Mitra Adiperkasa, Ace Hardware Indonesia, Matahari Department Store, Cisarua Mountain Dairy (Cimory), Ultrajaya Milk, PT Nippon Indosari Corpindo (ROTI), and Astra International, for auto exposure.


Indonesia Consumer - Positive Impressions from the Jakarta Fair

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

Equity Bottom-Up

<ul>
<li>
<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> performance during COVID was stellar and posted record high revenues and earnings without sacrificing margins. </li>
<li>FY 22's result was the first time in many years that both revenue and net income decelerated. </li>
<li>Current valuations at 19x PER and 7x PBR are not cheap, historically or relative to their peers. </li>
</ul>



Sido Muncul (SIDO IJ) performance during COVID was stellar and posted record high revenues and earnings without sacrificing margins. 
FY 22's result was the first time in many years that both revenue and net income decelerated. 
Current valuations at 19x PER and 7x PBR are not cheap, historically or relative to their peers. 


Sido Muncul (SIDO): Past Is Not Indicative of Future

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>PNLF has seen its asset growth ratchet downward, running at near 12-year lows at +2% YoY </li>
<li>Phases of ROE decline are apparent, from 12-13%, then to 9%, and now to 5-6%</li>
<li>At least, there is a rebound in profit growth in FY22, after dismal 3 years</li>
</ul>


PNLF has seen its asset growth ratchet downward, running at near 12-year lows at +2% YoY 
Phases of ROE decline are apparent, from 12-13%, then to 9%, and now to 5-6%
At least, there is a rebound in profit growth in FY22, after dismal 3 years


Panin Financial - Vanishing Growth, Falling ROE, Despite Likely Rebalancing Beneficiary

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.</li>
<li>There are no rebalance implementations in the coming week though focus will move to the implementation of the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a>/ <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a> merger and index changes the following week.</li>
<li>There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.</li>
</ul>


The review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.
There are no rebalance implementations in the coming week though focus will move to the implementation of the HDFC Limited/ HDFC Bank merger and index changes the following week.
There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.


Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI

<ul>
<li>The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 31 July.</li>
<li>Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat (BBRI)</a> and <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA)</a>.</li>
<li>The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.</li>
</ul>


The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 31 July.
Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.


LQ45 Index Rebalance Preview (July): Review Period Nearly Complete

Indonesia

PT Bank Central Asia Tbk provides banking and related services.  The Bank also provides custodianship, trusteeship, and management of pension funds of financial institutions.  Through its subsidiaries, the Bank also provides leasing and consumer financing services.

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Bank Central Asia (BBCA IJ)

Indonesia Consumer - Positive Impressions from the Jakarta Fair

The highlights from the Jakarta Fair were a plethora of 2W and 4W EVs, a notable presence from dairy players, and many financing options being...

Angus Mackintosh

Sido Muncul (SIDO): Past Is Not Indicative of Future

SIDO's record high performance during COVID is unlikely to be repeated, and FY 22 result was telling. The valuation level is also not cheap at 7x...

Henry Soediarko

Panin Financial - Vanishing Growth, Falling ROE, Despite Likely Rebalancing Beneficiary

PNLF shows vanishing asset growth, falling ROE, and what appears to be a continuation of this during 1Q23. Even if it is a beneficiary from index...

Daniel Tabbush

Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

LQ45 Index Rebalance Preview (July): Review Period Nearly Complete

There could be up to 5 changes for the LQ45 in July. The impact of passive trading will be higher on the deletes compared to the adds....

Brian Freitas

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