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

Cross Asset Strategy

<p>Thailand has managed its way through the COVID-19 Pandemic admirably, in terms of bringing the numbers of new infections almost down to zero, outperforming its ASEAN peers along with Vietnam, quite considerably. </p>
<p>In order to achieve this result, the country imposed quite draconian lockdown measures closing restaurants and non-essential retail, even including an alcohol ban for a period to dissuade the population from socialising. </p>
<p>The Kingdom probably saw the impact at its most intense in April and May, with a gradual recovery starting in June and July across the domestic economy. </p>
<p>As part of these measures, Thailand closed its borders to foreigners and most importantly to tourists from the start of the pandemic until now. This has put a significant dent in the country's economy,  given that tourism is estimated to account for anything between 12%-20% of GDP. </p>
<p>The repercussions of this are wide-ranging from the obvious knock to hotels and restaurants but also has a significant impact on retailers, domestic consumption, and indirectly on the banking system, as NPLs from the different tourism-related segments start to rise.</p>
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<p>Thailand is taking the first steps to tentatively re-open the country's doors to tourism, for those wishing to stay more than 90 days, as well as for COVID-19 free medical tourists. There may be a more meaningful opening up towards the end of the year.</p>
<p>We look at <strong>hotels, hospitals, and retailers</strong> in an attempt to identify the key beneficiaries of gradual recovery in tourism and those stocks that remain the most defensive. There is also likely to be a knock-on impact for the<strong> Thai banks</strong>, which are looking attractive from a valuation perspective. </p>
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Thailand has managed its way through the COVID-19 Pandemic admirably, in terms of bringing the numbers of new infections almost down to zero, outperforming its ASEAN peers along with Vietnam, quite considerably. 
In order to achieve this result, the country imposed quite draconian lockdown measures closing restaurants and non-essential retail, even including an alcohol ban for a period to dissuade the population from socialising. 
The Kingdom probably saw the impact at its most intense in April and May, with a gradual recovery starting in June and July across the domestic economy. 
As part of these measures, Thailand closed its borders to foreigners and most importantly to tourists from the start of the pandemic until now. This has put a significant dent in the country's economy,  given that tourism is estimated to account for anything between 12%-20% of GDP. 
The repercussions of this are wide-ranging from the obvious knock to hotels and restaurants but also has a significant impact on retailers, domestic consumption, and indirectly on the banking system, as NPLs from the different tourism-related segments start to rise.

Thailand is taking the first steps to tentatively re-open the country's doors to tourism, for those wishing to stay more than 90 days, as well as for COVID-19 free medical tourists. There may be a more meaningful opening up towards the end of the year.
We look at hotels, hospitals, and retailers in an attempt to identify the key beneficiaries of gradual recovery in tourism and those stocks that remain the most defensive. There is also likely to be a knock-on impact for the Thai banks, which are looking attractive from a valuation perspective. 


Thailand's Tourism Dilemma - Buy Retailers, Hospitals, and Select Hotels

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

Equity Bottom-Up

Mitra Keluarga Karyasehat Tbk / Equity Bottom-Up

<p>The finding of the COVID-19 vaccine is not a risk to the company's expanding EBITDA margin (from 35% to between 45-50%) as the demand for COVID-19 specific testing and medical service will continue for a few years longer. The Ministry of Health capped the price but it is still at a premium compared to the non-COVID-19 service rate. </p>
<p>Trading at a 15% PER premium to the domestic peers, the company is valued at a 39% EV/EBITDA discount to the regional peers (thus it is still favorable to ASEAN investors) despite being the most profitable and pristine balance sheet. BUY.</p>

The finding of the COVID-19 vaccine is not a risk to the company's expanding EBITDA margin (from 35% to between 45-50%) as the demand for COVID-19 specific testing and medical service will continue for a few years longer. The Ministry of Health capped the price but it is still at a premium compared to the non-COVID-19 service rate. 
Trading at a 15% PER premium to the domestic peers, the company is valued at a 39% EV/EBITDA discount to the regional peers (thus it is still favorable to ASEAN investors) despite being the most profitable and pristine balance sheet. BUY.

Mitra Keluarga (MIKA): Margin Expansion from COVID-19

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<p>The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a></p>
</div><h3>Macro Insights</h3><p>In <a href="https://www.smartkarma.com/insights/thai-macro-watch-august-the-new-tech-wars-chinese-flood" target="_blank" data-smartkarma-citation="insights:42012" rel="noopener">Thai Macro Watch (August): The New Tech Wars, Chinese Flood</a>, our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> five global events and their impact on Thai equities.</p><h3>Equity Bottom-Up Insights</h3><p>In <a href="https://www.smartkarma.com/insights/ace-hardware-indonesia-aces-ij-building-a-road-to-recovery" target="_blank" data-smartkarma-citation="insights:42520" rel="noopener">Ace Hardware Indonesia (ACES IJ) - Building A Road to Recovery,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits one of Indonesia's leading retailers after a call with management.</p><p>In <a href="https://www.smartkarma.com/insights/akr-corporindo-akra-ij-the-landed-logistics-player" target="_blank" data-smartkarma-citation="insights:42569" rel="noopener">AKR Corporindo (AKRA IJ) - The Landed Logistics Player,</a><a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits this Indonesian chemical and fuel distributor with an increasing contribution coming from its JIIPE industrial estate. </p><p>In <a href="https://www.smartkarma.com/insights/sats-from-serving-22-5m-pax-in-1q20-to-serving-200k-pax-in-1q21-houston-we-have-a-problem" target="_blank" data-smartkarma-citation="insights:42488" rel="noopener">SATS: From Serving 22.5M Pax in 1Q20 -&gt; To Serving 200K Pax in 1Q21. Houston We Have a Problem.</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a> revisits Singapore airport maintenance leader post its recent numbers. </p><p>In <a href="https://www.smartkarma.com/insights/permata-bank-mandatory-takeover-launched-finally" target="_blank" data-smartkarma-citation="insights:42577" rel="noopener">Permata Bank Mandatory Takeover Launched. Finally.</a><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> revisits the <a href="https://www.smartkarma.com/entities/bank-permata-tbk-pt" target="_blank" data-smartkarma-citation="entities:728:1" rel="noopener">Bank Permata (BNLI IJ)</a> deal as it enters its final stage.</p><p>In <a href="https://www.smartkarma.com/insights/sprime-good-point-of-entry-singha-connection-could-add-further-upside" target="_blank" data-smartkarma-citation="insights:42589" rel="noopener">SPRIME: Good Point of Entry, Singha Connection Could Add Further Upside,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/aimirt-good-growth-outlook-but-already-priced-in" target="_blank" data-smartkarma-citation="insights:42639" rel="noopener">AIMIRT: Good Growth Outlook, but Already Priced In</a> initiates coverage on <a href="https://www.smartkarma.com/entities/aim-industrial-growth-freehold-and-leasehold-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:29180:1" rel="noopener">AIM Industrial Growth Freehold and Leasehold Real Estate Investment Trust (AIMIRT TB)</a> with a HOLD recommendation based on a target price of Bt14.30, implying an upside of 6% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/teamg-cost-savings-and-government-stimulus-to-drive-profit" target="_blank" data-smartkarma-citation="insights:42628" rel="noopener">TEAMG: Cost-Savings and Government Stimulus to Drive Profit,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/team-consulting-engineering-and-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:29175:1" rel="noopener">TEAM Consulting Engineering and Management (TEAMG TB)</a> and maintains a BUY recommendation on the company as he increases the target price to Bt2.81 from Bt2.42, implying an upside of 17% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/sisb-good-entry-point-for-investment-in-private-schools" target="_blank" data-smartkarma-citation="insights:42632" rel="noopener">SISB: Good Entry Point for Investment in Private Schools,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price.</p><p>In <a href="https://www.smartkarma.com/insights/sflex-staying-behind-key-players-in-the-market" target="_blank" data-smartkarma-citation="insights:42679" rel="noopener">SFLEX: Staying Behind Key Players in the Market,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on <a href="https://www.smartkarma.com/entities/starflex-pcl" target="_blank" data-smartkarma-citation="entities:29172:1" rel="noopener">Starflex PCL (SFLEX TB)</a> with a SELL recommendation based on a target price of Bt8.90, implying a downside of 28% from the current price. </p><p>In <a href="https://www.smartkarma.com/insights/boffice-asset-expansion-motivates-the-upside" target="_blank" data-smartkarma-citation="insights:42678" rel="noopener">BOFFICE: Asset Expansion Motivates the Upside,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on <a href="https://www.smartkarma.com/entities/bhiraj-office-leasehold-reit" target="_blank" data-smartkarma-citation="entities:29173:1" rel="noopener">Bhiraj Office Leasehold REIT (BOFFICE TB)</a> with a BUY recommendation based on a target price of Bt14.10, implying an upside of 18% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/all-valuation-remains-undemanding-expect-further-upside" target="_blank" data-smartkarma-citation="insights:42635" rel="noopener">ALL: Valuation Remains Undemanding, Expect Further Upside</a>, <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/all-inspire-development-pcl" target="_blank" data-smartkarma-citation="entities:29177:1" rel="noopener">All Inspire Development PCL (ALL TB),</a> where he has a Buy recommendation based on a target price of Bt4.39, implying an upside of 31% from the current price. </p><p>In <a href="https://www.smartkarma.com/insights/m-rapid-sssg-recovery-with-potential-growth-from-seafood-restaurant" target="_blank" data-smartkarma-citation="insights:42578" rel="noopener">M: Rapid SSSG Recovery with Potential Growth from Seafood Restaurant,</a> our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> circle back to <a href="https://www.smartkarma.com/entities/mk-restaurants-group-pcl" target="_blank" data-smartkarma-citation="entities:17689:1" rel="noopener">MK Restaurants Group (M TB)</a> after attending the recent analyst briefing, where they came away more positive with signs of an SSSG recovery post lockdown easing.</p><p>In <a href="https://www.smartkarma.com/insights/egco-positive-2h20-earnings-outlook-from-better-overseas-performance" target="_blank" data-smartkarma-citation="insights:42634" rel="noopener">EGCO: Positive 2H20 Earnings Outlook from Better Overseas Performance,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisit <a href="https://www.smartkarma.com/entities/electricity-generating-pcl" target="_blank" data-smartkarma-citation="entities:6149:1" rel="noopener">Electricity Generating (EGCO TB)</a> after the company's positive analyst briefing. </p><p>In <a href="https://www.smartkarma.com/insights/wice-expect-earnings-to-continue-growing-yoy-in-2h20" target="_blank" data-smartkarma-citation="insights:42537" rel="noopener">WICE: Expect Earnings to Continue Growing YoY in 2H20,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> circle back to <a href="https://www.smartkarma.com/entities/wice-logistics-pcl" target="_blank" data-smartkarma-citation="entities:26172:1" rel="noopener">Wice Logistics (WICE TB)</a> after going to the company's analyst briefing. </p><p>In <a href="https://www.smartkarma.com/insights/hana-covid-19-impact-has-passed" target="_blank" data-smartkarma-citation="insights:42575" rel="noopener">HANA: Covid-19 Impact Has Passed,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisits one of Thailand's leading electronics manufacturing services companies. </p><h3>Sector and Thematic Insights</h3><p>In <a href="https://www.smartkarma.com/insights/indonesia-banks-most-to-recover" target="_blank" data-smartkarma-citation="insights:42493" rel="noopener">Indonesia Banks – Most To Recover?,</a> banking specialist <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> zooms in on the potential recovery to come for Indonesian Banks. </p><div><div><div id="ember9100"><div><section><div id="ember9112"><div><p>In <a href="https://www.smartkarma.com/insights/asia-banks-oversized-dividends" target="_blank" data-smartkarma-citation="insights:42535" rel="noopener">Asia Banks – Oversized Dividends,</a><a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> zeros in on dividend payments for Asian banks during the pandemic period. </p></div></div></section></div></div></div></div><h3>Credit Insights</h3><p>In <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-pondering-pricing-on-a-promised-new-issue" target="_blank" data-smartkarma-citation="insights:42524" rel="noopener">Bank Rakyat Indonesia: Pondering Pricing on a Promised New Issue</a><a href="https://www.smartkarma.com/profiles/hank-calenti-cfa" target="_blank" data-smartkarma-citation="accounts:5194" rel="noopener">Hank Calenti, CFA</a> takes a look at the proposed US$1bn bond issue from <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> and finds it appealing. <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> could price a potential five-year senior unsecured </p>


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in ASEAN@Smartkarma
Macro InsightsIn Thai Macro Watch (August): The New Tech Wars, Chinese Flood, our Thai guru Athaporn Arayasantiparb, CFA five global events and their impact on Thai equities.Equity Bottom-Up InsightsIn Ace Hardware Indonesia (ACES IJ) - Building A Road to Recovery, CrossASEAN Insight Provider Angus Mackintosh revisits one of Indonesia's leading retailers after a call with management.In AKR Corporindo (AKRA IJ) - The Landed Logistics Player,Angus Mackintosh revisits this Indonesian chemical and fuel distributor with an increasing contribution coming from its JIIPE industrial estate. In SATS: From Serving 22.5M Pax in 1Q20 -&gt; To Serving 200K Pax in 1Q21. Houston We Have a Problem. CrossASEAN Insight Provider Nicolas Van Broekhoven revisits Singapore airport maintenance leader post its recent numbers. In Permata Bank Mandatory Takeover Launched. Finally.Travis Lundy revisits the Bank Permata (BNLI IJ) deal as it enters its final stage.In SPRIME: Good Point of Entry, Singha Connection Could Add Further Upside,Dr Andrew Stotz, CFA initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price. In AIMIRT: Good Growth Outlook, but Already Priced In initiates coverage on AIM Industrial Growth Freehold and Leasehold Real Estate Investment Trust (AIMIRT TB) with a HOLD recommendation based on a target price of Bt14.30, implying an upside of 6% from the current share price. In TEAMG: Cost-Savings and Government Stimulus to Drive Profit,Dr Andrew Stotz, CFA revisits TEAM Consulting Engineering and Management (TEAMG TB) and maintains a BUY recommendation on the company as he increases the target price to Bt2.81 from Bt2.42, implying an upside of 17% from the current share price. In SISB: Good Entry Point for Investment in Private Schools,Dr Andrew Stotz, CFA initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price.In SFLEX: Staying Behind Key Players in the Market,Dr Andrew Stotz, CFA initiates coverage on Starflex PCL (SFLEX TB) with a SELL recommendation based on a target price of Bt8.90, implying a downside of 28% from the current price. In BOFFICE: Asset Expansion Motivates the Upside,Dr Andrew Stotz, CFA initiates coverage on Bhiraj Office Leasehold REIT (BOFFICE TB) with a BUY recommendation based on a target price of Bt14.10, implying an upside of 18% from the current share price. In ALL: Valuation Remains Undemanding, Expect Further Upside, Dr Andrew Stotz, CFA revisits All Inspire Development PCL (ALL TB), where he has a Buy recommendation based on a target price of Bt4.39, implying an upside of 31% from the current price. In M: Rapid SSSG Recovery with Potential Growth from Seafood Restaurant, our friends at Country Group circle back to MK Restaurants Group (M TB) after attending the recent analyst briefing, where they came away more positive with signs of an SSSG recovery post lockdown easing.In EGCO: Positive 2H20 Earnings Outlook from Better Overseas Performance,Country Group revisit Electricity Generating (EGCO TB) after the company's positive analyst briefing. In WICE: Expect Earnings to Continue Growing YoY in 2H20,Country Group circle back to Wice Logistics (WICE TB) after going to the company's analyst briefing. In HANA: Covid-19 Impact Has Passed,Country Group revisits one of Thailand's leading electronics manufacturing services companies. Sector and Thematic InsightsIn Indonesia Banks – Most To Recover?, banking specialist Daniel Tabbush zooms in on the potential recovery to come for Indonesian Banks. In Asia Banks – Oversized Dividends,Daniel Tabbush zeros in on dividend payments for Asian banks during the pandemic period. Credit InsightsIn Bank Rakyat Indonesia: Pondering Pricing on a Promised New IssueHank Calenti, CFA takes a look at the proposed US$1bn bond issue from Bank Rakyat Indonesia Persero (BBRI IJ) and finds it appealing. Bank Rakyat Indonesia Persero (BBRI IJ) could price a potential five-year senior unsecured 

The Week that Was in ASEAN@Smartkarma - Ace Hardwear, Thai Macro, and Indonesian Banks

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<p>This past week's offering of Insights across ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights.</p>
<p>Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma.</a></p>
</div><h2>Macro Insights</h2><p>In <a href="https://www.smartkarma.com/insights/a-real-electoral-contest-in-singapore-albeit-limited-by-lack-of-physical-campaigning" target="_blank" data-smartkarma-citation="insights:40706" rel="noopener">A Real Electoral Contest in Singapore, Albeit Limited by Lack of Physical Campaigning,</a> CrossASEAN Chief economist <a href="https://www.smartkarma.com/profiles/prasenjit-k-basu" target="_blank" data-smartkarma-citation="accounts:612" rel="noopener">Prasenjit K. Basu</a> zeros in on the prospects for the upcoming Singapore election, where he sees the PAP coming out on top but with major challenges ahead.  </p><p>In <a href="https://www.smartkarma.com/insights/the-race-to-the-bottom-growth-pessimism-increasing-but-still-too-optimistic" target="_blank" data-smartkarma-citation="insights:40647" rel="noopener">The Race to the Bottom: Growth Pessimism Increasing but Still Too Optimistic,</a><a href="https://www.smartkarma.com/profiles/dr-jim-walker" target="_blank" data-smartkarma-citation="accounts:1628" rel="noopener">Dr Jim Walker</a> addresses what he sees as an overt optimistic view of the world and its eventual recovery from multilateral agencies. </p><h2>Equity Botton-Up Insights</h2><p>In <a href="https://www.smartkarma.com/insights/bangkok-dusit-medical-bdms-tb-well-placed-to-treat-the-recovery" target="_blank" data-smartkarma-citation="insights:40689" rel="noopener">Bangkok Dusit Medical (BDMS TB) - Well-Placed to Treat the Recovery,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits this leading Thai hospital stock as a pandemic recovery play. </p><p>In <a href="https://www.smartkarma.com/insights/matahari-department-store-lppf-ij-opportunity-knocks" target="_blank" data-smartkarma-citation="insights:40855" rel="noopener">Matahari Department Store (LPPF IJ) - Opportunity Knocks?,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits Indonesia's largest department store operator post a call with the company. </p><p>In <a href="https://www.smartkarma.com/insights/sri-trang-gloves-ipo-trading-riding-on-covid-19-second-wave" target="_blank" data-smartkarma-citation="insights:40843" rel="noopener">Sri Trang Gloves IPO Trading - Riding on COVID-19 Second Wave,</a><a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" data-smartkarma-citation="accounts:4" rel="noopener">Sumeet Singh</a> revisits the IPO of <a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (STGT TB)</a> in Thailand. </p><p>In <a href="https://www.smartkarma.com/insights/sgx-bolt-on-transaction" target="_blank" data-smartkarma-citation="insights:40816" rel="noopener">SGX – Bolt-On Transaction,</a><a href="https://www.smartkarma.com/profiles/thomas-j-monaco" target="_blank" data-smartkarma-citation="accounts:1716" rel="noopener">Thomas J. Monaco</a> zeros in on the most recent acquisition by <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP)</a> and sees only marginal impact. </p><p>In <a href="https://www.smartkarma.com/insights/accordia-golf-trust-buyout-a-gimme-but" target="_blank" data-smartkarma-citation="insights:40778" rel="noopener">Accordia Golf Trust Buyout... A Gimme But...</a><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> takes a look at this lingering buyout situation.  </p><p>In <a href="https://www.smartkarma.com/insights/major-accordia-golf-trust-shareholder-has-issues-with-price-process" target="_blank" data-smartkarma-citation="insights:40960" rel="noopener">Major Accordia Golf Trust Shareholder Has Issues With Price &amp; Process,</a><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> revisits this buyout situation after some telling comments from its major shareholder. </p><p>In <a href="https://www.smartkarma.com/insights/teamg-government-stimulus-should-support-sales-growth" target="_blank" data-smartkarma-citation="insights:40909" rel="noopener">TEAMG: Government Stimulus Should Support Sales Growth,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on <a href="https://www.smartkarma.com/entities/team-consulting-engineering" target="_blank" data-smartkarma-citation="entities:29175:1" rel="noopener">TEAM Consulting Engineering &amp; (TEAMG TB)</a> with a BUY recommendation based on a target price of Bt2.42, implying an upside of 20% from the current share price. </p><p>In<a href="https://www.smartkarma.com/insights/tasco-healthy-demand-from-domestic-projects" target="_blank" data-smartkarma-citation="insights:40823" rel="noopener"> TASCO: Healthy Demand from Domestic Projects,</a> out friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisits <a href="https://www.smartkarma.com/entities/tipco-asphalt-pub-co-ltd" target="_blank" data-smartkarma-citation="entities:5336:1" rel="noopener">Tipco Asphalt (TASCO TB)</a> after attending the company's analyst briefing, where the company expressed a positive tone.  </p><h2>Sector and Thematic Insights</h2><p>In <a href="https://www.smartkarma.com/insights/osotspa-indorama-strong-operations-amidst-pandemic" target="_blank" data-smartkarma-citation="insights:38510" rel="noopener">Osotspa, Indorama: Strong Operations Amidst Pandemic,</a> our Thai guru writes up two recent company visits to consumer products giant <a href="https://www.smartkarma.com/entities/osotspa-public-company-limited" target="_blank" data-smartkarma-citation="entities:27004:1" rel="noopener">Osotspa Public Company Limited (OSP TB),</a> manufacturer of top-selling energy drink M-150 and liquid Vitamin C C-Vitt and petrochemicals giant <a href="https://www.smartkarma.com/entities/indorama-synthetics-tbk-pt" target="_blank" data-smartkarma-citation="entities:14801:1" rel="noopener">Indorama Synthetics (INDR IJ)</a>, both of which he sees as resilient pandemic recovery plays. </p><h2>Credit Insights</h2><p>In <a href="https://www.smartkarma.com/insights/laos-pdr-twin-deficit-dilemma" target="_blank" data-smartkarma-citation="insights:40916" rel="noopener">LAOS PDR: Twin Deficit Dilemma</a><a href="https://www.smartkarma.com/profiles/warut-promboon" target="_blank" data-smartkarma-citation="accounts:1226" rel="noopener">Warut Promboon</a> initiates coverage of <a href="https://www.smartkarma.com/entities/laos-sovereign-credit" target="_blank" data-smartkarma-citation="entities:29165:1" rel="noopener">Laos Sovereign Credit (LAOS GOVT)</a> (Laos) as a high-yield sovereign credit.</p><p>In <a href="https://www.smartkarma.com/insights/agung-podomoro-land-tear-sheet-lucror-analytics-1c280801-cb38-4f92-9c94-6effca262a5d" target="_blank" data-smartkarma-citation="insights:40845" rel="noopener">Agung Podomoro Land - Tear Sheet,</a><a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" data-smartkarma-citation="accounts:7108" rel="noopener">Trung Nguyen</a> takes a birds-eye view of this Indonesian property developer from a credit perspective. </p>


This past week's offering of Insights across ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in ASEAN@Smartkarma.
Macro InsightsIn A Real Electoral Contest in Singapore, Albeit Limited by Lack of Physical Campaigning, CrossASEAN Chief economist Prasenjit K. Basu zeros in on the prospects for the upcoming Singapore election, where he sees the PAP coming out on top but with major challenges ahead.  In The Race to the Bottom: Growth Pessimism Increasing but Still Too Optimistic,Dr Jim Walker addresses what he sees as an overt optimistic view of the world and its eventual recovery from multilateral agencies. Equity Botton-Up InsightsIn Bangkok Dusit Medical (BDMS TB) - Well-Placed to Treat the Recovery, CrossASEAN Insight Provider Angus Mackintosh revisits this leading Thai hospital stock as a pandemic recovery play. In Matahari Department Store (LPPF IJ) - Opportunity Knocks?, CrossASEAN Insight Provider Angus Mackintosh revisits Indonesia's largest department store operator post a call with the company. In Sri Trang Gloves IPO Trading - Riding on COVID-19 Second Wave,Sumeet Singh revisits the IPO of Sri Trang Gloves (STGT TB) in Thailand. In SGX – Bolt-On Transaction,Thomas J. Monaco zeros in on the most recent acquisition by SGX (SGX SP) and sees only marginal impact. In Accordia Golf Trust Buyout... A Gimme But...Travis Lundy takes a look at this lingering buyout situation.  In Major Accordia Golf Trust Shareholder Has Issues With Price &amp; Process,Travis Lundy revisits this buyout situation after some telling comments from its major shareholder. In TEAMG: Government Stimulus Should Support Sales Growth,Dr Andrew Stotz, CFA initiates coverage on TEAM Consulting Engineering &amp; (TEAMG TB) with a BUY recommendation based on a target price of Bt2.42, implying an upside of 20% from the current share price. In TASCO: Healthy Demand from Domestic Projects, out friends at Country Group revisits Tipco Asphalt (TASCO TB) after attending the company's analyst briefing, where the company expressed a positive tone.  Sector and Thematic InsightsIn Osotspa, Indorama: Strong Operations Amidst Pandemic, our Thai guru writes up two recent company visits to consumer products giant Osotspa Public Company Limited (OSP TB), manufacturer of top-selling energy drink M-150 and liquid Vitamin C C-Vitt and petrochemicals giant Indorama Synthetics (INDR IJ), both of which he sees as resilient pandemic recovery plays. Credit InsightsIn LAOS PDR: Twin Deficit DilemmaWarut Promboon initiates coverage of Laos Sovereign Credit (LAOS GOVT) (Laos) as a high-yield sovereign credit.In Agung Podomoro Land - Tear Sheet,Trung Nguyen takes a birds-eye view of this Indonesian property developer from a credit perspective. 

The Week that Was in ASEAN@Smartkarma - Singapore's Election, Thai Hospitals, and Rubber Gloves

Bangkok Dusit Medical Services / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/bangkok-dusit-med-service" target="_blank" data-smartkarma-citation="entities:875:1" rel="noopener">Bangkok Dusit Medical Services (BDMS TB)</a> has scrapped its plan to take over <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 has no plans to do so in the future according to the Founder Prasert Prasarttong-osoth. We see this as the removal of an overhang. </p>
<p>This move always looked dubious and opportunistic and already had objections from <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> minority shareholders. This should be seen as the removal of an unwelcome diversion, which allows <a href="https://www.smartkarma.com/entities/bangkok-dusit-med-service" target="_blank" data-smartkarma-citation="entities:875:1" rel="noopener">Bangkok Dusit Medical Services (BDMS TB)</a> to focus on its core business, especially as we come out of COVID-19 restrictions.</p>
<p><a href="https://www.smartkarma.com/entities/bangkok-dusit-med-service" target="_blank" data-smartkarma-citation="entities:875:1" rel="noopener">Bangkok Dusit Medical Services (BDMS TB)</a> looks better positioned in a post-COVID-19 world given it has less exposure to medical tourism than <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>, where the recovery may be protracted. There is more likely to be a near -term pick-up in Thai patients numbers, given that patients can only hold off on treatments for so long. </p>
<p>The company has undergone a series of cost containment measures in 2Q2020, as well as reducing its Capex considerable for this year, which will provide some offset to the impact of the pandemic. </p>
<p>Valuations look quite reasonable with the company trading on 18.3x FY21E EV/EBITDA versus its 5-year average of 22.5x. </p>

Bangkok Dusit Medical Services (BDMS TB) has scrapped its plan to take over Bumrungrad Hospital Pub Co (BH TB) and has no plans to do so in the future according to the Founder Prasert Prasarttong-osoth. We see this as the removal of an overhang. 
This move always looked dubious and opportunistic and already had objections from Bumrungrad Hospital Pub Co (BH TB) minority shareholders. This should be seen as the removal of an unwelcome diversion, which allows Bangkok Dusit Medical Services (BDMS TB) to focus on its core business, especially as we come out of COVID-19 restrictions.
Bangkok Dusit Medical Services (BDMS TB) looks better positioned in a post-COVID-19 world given it has less exposure to medical tourism than Bumrungrad Hospital Pub Co (BH TB), where the recovery may be protracted. There is more likely to be a near -term pick-up in Thai patients numbers, given that patients can only hold off on treatments for so long. 
The company has undergone a series of cost containment measures in 2Q2020, as well as reducing its Capex considerable for this year, which will provide some offset to the impact of the pandemic. 
Valuations look quite reasonable with the company trading on 18.3x FY21E EV/EBITDA versus its 5-year average of 22.5x. 

Bangkok Dusit Medical (BDMS TB) - Well-Placed to Treat the Recovery

Thailand

Bumrungrad Hospital Public Company Limited, through its subsidiaries,  owns and operates the Bumrungrad Hospital. Located in Bangkok, the Hospital has capacity of international standard medical care with 554 beds for inpatients and approximately 125 clinic examination suites that can serve up to 3,000 outpatients daily.

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Bumrungrad Hospital Pub Co (BH TB)

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