Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<h2>Summary and Conclusion</h2>
What's Original?
This insight is an in-depth look into the Asian wind energy industry, covering the value chain and related companies at each key stage of the value chain. Our research includes the following:
Industry Background: This includes an in-depth analysis on the wind energy sector with an overview of wind energy, including the growth of global installed capacity wind energy and analysis of the Asian wind energy market.
We examine both global onshore and offshore wind energy and differences in installation costs, annual investments, levelised cost of electricity (LCoE) and the declining trend in installation costs.
The potential capacity level of offshore wind energy is higher than onshore, though installation costs, O&amp;M and transportation costs are currently higher for offshore which is clearly reflected in the LCoE of the two categories.
When comparing total global wind capacity against the Asian market alone, over the last decade the Asian market’s growth rate was higher than the global rate and 51% of global new capacity additions were made in the Asian region.
The majority of Asian new capacity installed in Asian market was in APAC and China remained the world’s largest onshore market accounting for 37% of total onshore installations in 2019 while in the offshore market China accounted for a slightly more modest 23% of installations, trailing the UK and Germany.
The total installed capacity of onshore wind is expected to grow at a CAGR of 9.2% and to reach 1,787 GW globally in 2030 and then 5,044 GW by 2050. Furthermore, Asia (mostly China) should continue to dominate the onshore wind power industry, with more than 50% of global installations by 2050. Offshore wind energy in Asia should grow at a CAGR of 28% during 2018-30 and reach 613 GW while the Asian onshore market is expected to grow at a 13% CAGR and reach 2,646 GW. We examine the leading Asian countries (India, Japan and China) in the sector and their growth potential.
We believe that, over the next decade, the Asian market will outperform in wind energy growth compared to Europe and the US. Further, the trend towards offshore wind energy development in the Asian region will start to gather steam. The growth will be still mainly driven by China, India and Japan, however, apart from those countries South Korea, Taiwan and Vietnam also demonstrate some potential to develop wind energy.
Value Chain Analysis: We detail the value chain for wind energy highlighting the critical stages of the value chain (raw material supply, design and development services, component supply, wind turbine manufacturers, construction &amp; installation services and wind farm developers) and the leading players in those stages.
Wind Farm Owners - By the end of 2019, the top 15 wind farm owner-operators held over 1/3 of the total 650 GW of onshore and offshore assets globally.  Chinese utilities continue to dominate the top 15 ranking of wind asset owners as China is the leader in the market. We believe that this situation will continue as wind energy installation in China is expected to grow at higher rate than other leading countries in the world.
Original Equipment Manufacturing - OEMs usually manufacture some of the critical components such as the nacelle in-house, and blades and towers are produced either by the OEM or fabricated to the OEM's specifications by a supplier. The tower, gearbox, shafts, bearings, blades, generator, power converter and control systems accounted more than 80% of total costs.
Although most Asian suppliers have historically relied on turbine technologies licensed from Europe to enter the wind industry, the Asia Pacific has now become the world’s largest wind turbine manufacturing hub after a decade of development. In 2019, some 33 wind turbine manufacturers installed an estimated 22,893 wind turbines globally with a combined capacity of 63,076 MW. Of the 33 suppliers, 20 are from APAC.
Further, we have noticed that Chinese and Indian players have maintained their leading market position in the Asian region while international players like Siemens Gamesa and GE were able to obtain market share in the region.
Rotors - Turbine rotor diameters have been getting larger as a result of greater pressure for turbine OEMs to reduce the LCOE by launching new turbines with larger rotors that allow for better capacity factors and an improvement in AEP (Annual Energy Production). China is the key driver behind the trend of larger wind turbine rotors as out of the 6,691 units of 2.0 MW wind turbines installed globally in 2018, nearly 80% are located in China, of which more than half the turbines installed are equipped with rotors that are 120m or larger. We see the trend of building larger and light weight rotors continuing, especially with Asian market started to develop more offshore wind projects.
Blades - Blade core material balsa shortages have prompted turbine OEMs and blade manufacturers to switch to PET and hybrid designs with Balsa and PET. Wood Mackenzie forecasts the share of PET to increase from 20% in 2018 to more than 55% by 2023.
Gearboxes - GWEC predicted that annual global wind gearbox demand is likely to reach 56.4 GW in 2019 and then peak in 2020 at 59.1GW driven by the installation rush in China and the US. Regionally, around 40-48% of total demand is likely to be produced in South East Asia between 2019-2023. Furthermore, around 75 GW of gearbox manufacturing capacity is available globally, thus GWEC does not expect any major bottleneck. Around 70% of the global market share is represented by three main players, Winergy, NGC and ZF. Winergy and NGC have maintained similar levels of wind turbine gear box market share over a decade while ZF was increase its market share by acquiring other leading companies around the globe.
Towers - The tower has low technical requirements compared to other components and is thus usually sourced locally. A considerable percentage of Asian tower manufacturers ship their wind towers to North American and European countries, as production costs are lower in Asian countries and they are able to offer towers at competitive prices. Some players like Suzlon have invented lower cost hybrid tower structures which can be built at much lower cost than traditional designs.
Services &amp; Support Opportunities – Broadly speaking, the services opportunities can be categorised into: Project development Geotechnical services Logistics support for wind farm Construction opportunities Operations and maintenance. These service providing companies generate higher margins compared to OEMs and wind turbine manufactures and as with solar power, we see a trend for OEM and component manufactures to expand services segments by introducing new technological innovation.

Summary and Conclusion
What's Original?
This insight is an in-depth look into the Asian wind energy industry, covering the value chain and related companies at each key stage of the value chain. Our research includes the following:
Industry Background: This includes an in-depth analysis on the wind energy sector with an overview of wind energy, including the growth of global installed capacity wind energy and analysis of the Asian wind energy market.
We examine both global onshore and offshore wind energy and differences in installation costs, annual investments, levelised cost of electricity (LCoE) and the declining trend in installation costs.
The potential capacity level of offshore wind energy is higher than onshore, though installation costs, O&amp;M and transportation costs are currently higher for offshore which is clearly reflected in the LCoE of the two categories.
When comparing total global wind capacity against the Asian market alone, over the last decade the Asian market’s growth rate was higher than the global rate and 51% of global new capacity additions were made in the Asian region.
The majority of Asian new capacity installed in Asian market was in APAC and China remained the world’s largest onshore market accounting for 37% of total onshore installations in 2019 while in the offshore market China accounted for a slightly more modest 23% of installations, trailing the UK and Germany.
The total installed capacity of onshore wind is expected to grow at a CAGR of 9.2% and to reach 1,787 GW globally in 2030 and then 5,044 GW by 2050. Furthermore, Asia (mostly China) should continue to dominate the onshore wind power industry, with more than 50% of global installations by 2050. Offshore wind energy in Asia should grow at a CAGR of 28% during 2018-30 and reach 613 GW while the Asian onshore market is expected to grow at a 13% CAGR and reach 2,646 GW. We examine the leading Asian countries (India, Japan and China) in the sector and their growth potential.
We believe that, over the next decade, the Asian market will outperform in wind energy growth compared to Europe and the US. Further, the trend towards offshore wind energy development in the Asian region will start to gather steam. The growth will be still mainly driven by China, India and Japan, however, apart from those countries South Korea, Taiwan and Vietnam also demonstrate some potential to develop wind energy.
Value Chain Analysis: We detail the value chain for wind energy highlighting the critical stages of the value chain (raw material supply, design and development services, component supply, wind turbine manufacturers, construction &amp; installation services and wind farm developers) and the leading players in those stages.
Wind Farm Owners - By the end of 2019, the top 15 wind farm owner-operators held over 1/3 of the total 650 GW of onshore and offshore assets globally.  Chinese utilities continue to dominate the top 15 ranking of wind asset owners as China is the leader in the market. We believe that this situation will continue as wind energy installation in China is expected to grow at higher rate than other leading countries in the world.
Original Equipment Manufacturing - OEMs usually manufacture some of the critical components such as the nacelle in-house, and blades and towers are produced either by the OEM or fabricated to the OEM's specifications by a supplier. The tower, gearbox, shafts, bearings, blades, generator, power converter and control systems accounted more than 80% of total costs.
Although most Asian suppliers have historically relied on turbine technologies licensed from Europe to enter the wind industry, the Asia Pacific has now become the world’s largest wind turbine manufacturing hub after a decade of development. In 2019, some 33 wind turbine manufacturers installed an estimated 22,893 wind turbines globally with a combined capacity of 63,076 MW. Of the 33 suppliers, 20 are from APAC.
Further, we have noticed that Chinese and Indian players have maintained their leading market position in the Asian region while international players like Siemens Gamesa and GE were able to obtain market share in the region.
Rotors - Turbine rotor diameters have been getting larger as a result of greater pressure for turbine OEMs to reduce the LCOE by launching new turbines with larger rotors that allow for better capacity factors and an improvement in AEP (Annual Energy Production). China is the key driver behind the trend of larger wind turbine rotors as out of the 6,691 units of 2.0 MW wind turbines installed globally in 2018, nearly 80% are located in China, of which more than half the turbines installed are equipped with rotors that are 120m or larger. We see the trend of building larger and light weight rotors continuing, especially with Asian market started to develop more offshore wind projects.
Blades - Blade core material balsa shortages have prompted turbine OEMs and blade manufacturers to switch to PET and hybrid designs with Balsa and PET. Wood Mackenzie forecasts the share of PET to increase from 20% in 2018 to more than 55% by 2023.
Gearboxes - GWEC predicted that annual global wind gearbox demand is likely to reach 56.4 GW in 2019 and then peak in 2020 at 59.1GW driven by the installation rush in China and the US. Regionally, around 40-48% of total demand is likely to be produced in South East Asia between 2019-2023. Furthermore, around 75 GW of gearbox manufacturing capacity is available globally, thus GWEC does not expect any major bottleneck. Around 70% of the global market share is represented by three main players, Winergy, NGC and ZF. Winergy and NGC have maintained similar levels of wind turbine gear box market share over a decade while ZF was increase its market share by acquiring other leading companies around the globe.
Towers - The tower has low technical requirements compared to other components and is thus usually sourced locally. A considerable percentage of Asian tower manufacturers ship their wind towers to North American and European countries, as production costs are lower in Asian countries and they are able to offer towers at competitive prices. Some players like Suzlon have invented lower cost hybrid tower structures which can be built at much lower cost than traditional designs.
Services &amp; Support Opportunities – Broadly speaking, the services opportunities can be categorised into: Project development Geotechnical services Logistics support for wind farm Construction opportunities Operations and maintenance. These service providing companies generate higher margins compared to OEMs and wind turbine manufactures and as with solar power, we see a trend for OEM and component manufactures to expand services segments by introducing new technological innovation.

Asian Wind Energy: Efficiency and Cost Reduction in Focus as Players Eye a Post FiT Future

<a href="https://asia.nikkei.com/Business/Energy/Japan-taps-Australia-and-Brunei-for-hydrogen-import-goal" target="_blank" rel="noopener">Momentum is building within East Asia to propel the Hydrogen economy forward</a> as Japan, Korea and China have demonstrated interest in investing heavily in the technology, a call that is being answered by a variety of players through the supply chain. We examine below the key investment opportunities and timelines for these players.

Momentum is building within East Asia to propel the Hydrogen economy forward as Japan, Korea and China have demonstrated interest in investing heavily in the technology, a call that is being answered by a variety of players through the supply chain. We examine below the key investment opportunities and timelines for these players.

Equity Bottom-Up

Chiyoda released somewhat weak 2Q results as a weak gross margin more than offset continued discipline at the operating expense line to push the company slightly into the red. The story here remains all about Qatar and the name offers significant value but no incremental driver save that one, requiring investor patience.

Chiyoda released somewhat weak 2Q results as a weak gross margin more than offset continued discipline at the operating expense line to push the company slightly into the red. The story here remains all about Qatar and the name offers significant value but no incremental driver save that one, requiring investor patience.

Chiyoda – COVID Uncertainty Continues to Dog Qatar Order

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

<div class="content-highlight">
The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> 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.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.  
</div><h3>Macro Insights</h3>In <a href="https://www.smartkarma.com/insights/agong-asserts-himself-preventing-change-of-pm-but-disallowing-emergency-rule" target="_blank" data-smartkarma-citation="insights:44572" rel="noopener">Agong Asserts Himself, Preventing Change of PM but Disallowing Emergency Rule,</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> comments on the ongoing political upheaval in Malaysia. In <a href="https://www.smartkarma.com/insights/trouble-down-south-it-s-not-just-the-virus" target="_blank" data-smartkarma-citation="insights:44698" rel="noopener">Trouble Down South: It's Not Just the Virus,</a><a href="https://www.smartkarma.com/profiles/dr-jim-walker" target="_blank" data-smartkarma-citation="accounts:1628" rel="noopener">Dr. Jim Walker</a> gives his prescriptions on why South East Asia has been such a poor performer this year. In <a href="https://www.smartkarma.com/insights/thai-strategy-2021-part-1-key-themes" target="_blank" data-smartkarma-citation="insights:40842" rel="noopener">Thai Strategy 2021 (Part 1): Key Themes,</a> out 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> lays out his thoughts for the outlook for the Thai market next year. <h3>Equity Bottom-Up Insights</h3>In his Indonesian Insight, <a href="https://www.smartkarma.com/insights/matahari-department-store-lppf-ij-too-early-to-be-early" target="_blank" data-smartkarma-citation="insights:44460" rel="noopener">Matahari Department Store (LPPF IJ) - Too Early to Be Early,</a> Cross ASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> circles back to the country's largest department store operator post its recent results. In <a href="https://www.smartkarma.com/insights/akr-corporindo-akra-ij-great-omnibus-expectations" target="_blank" data-smartkarma-citation="insights:44611" rel="noopener">AKR Corporindo (AKRA IJ) - Great Omnibus Expectations,</a> CrossASEAN insight provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener">Angus Mackintosh</a> revisits <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" rel="noopener">AKR Corporindo (AKRA IJ)</a> after its recent 3Q2020 results that continued to demonstrate its resilience, with an across the board improvement in margins, despite a decline in sales.In a Malaysian Insight, <a href="https://www.smartkarma.com/insights/ql-resources-ql-take-profit" target="_blank" data-smartkarma-citation="insights:44598" rel="noopener">QL Resources (QL): Take Profit?,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" data-smartkarma-citation="accounts:1006" rel="noopener">Henry Soediarko</a> revisits this commodity turned retail play, through its Family Mart business. In <a href="https://www.smartkarma.com/insights/far-east-hospitality-trust-feht-beneficiary-of-opening-up" target="_blank" data-smartkarma-citation="insights:44649" rel="noopener">Far East Hospitality Trust (FEHT): Beneficiary of Opening Up,</a> CrossASEAN Insight Provider<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> takes an initial look at<a href="https://www.smartkarma.com/entities/far-east-hospitality-trust" target="_blank" rel="noopener"> Far East Hospitality Trust (FEHT SP),</a> the only hospitality REIT in Singapore with a 100% domestic hospitality exposure and a higher fixed rental component, offering a defensive exposure during this difficult market environment. In <a href="https://www.smartkarma.com/insights/bca-profit-returns" target="_blank" data-smartkarma-citation="insights:44605" rel="noopener">BCA – Profit Returns,</a> banking specialist <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> revisits <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 IJ)</a> and finds the bank clawing back some of the ROA it lost during 2Q2020 in the most recent quarter. In <a href="https://www.smartkarma.com/insights/bts-potential-positive-catalysts-ahead" target="_blank" data-smartkarma-citation="insights:44691" rel="noopener">BTS: Potential Positive Catalysts Ahead,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisit this Thai transportation play with a more positive slant.In <a href="https://www.smartkarma.com/insights/pttep-4q20-earnings-to-soften-from-lower-asp-and-volume-sales" target="_blank" data-smartkarma-citation="insights:44740" rel="noopener">PTTEP: 4Q20 Earnings to Soften from Lower ASP and Volume Sales,</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> assess the prospects for <a href="https://www.smartkarma.com/entities/ptt-exploration-and-production-public-company-limited" target="_blank" data-smartkarma-citation="entities:261:1" rel="noopener">PTT E&amp;P (PTTEP TB)</a> going into the end of the year.<h3>Credit Insights</h3>In this Insight, <a href="https://www.smartkarma.com/insights/japfa-comfeed-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" data-smartkarma-citation="insights:44743" rel="noopener">Japfa Comfeed - Earnings Flash - 9M FY 2020 Results,</a> Senior Credit Analyst<a href="https://www.smartkarma.com/profiles/trung-nguyen" target="_blank" rel="noopener"> Trung Nguyen</a> discusses <a href="https://www.smartkarma.com/entities/japfa-comfeed-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8258:1" rel="noopener">Japfa Comfeed Indonesia (JPFA IJ)'</a>s 9M2020 results, which came in worse than expected (following a dismal Q22020), as the impact of COVID-19 reduced consumers' purchasing power and hit demand. In <a href="https://www.smartkarma.com/insights/pan-brothers-earnings-flash-9m-fy-2020-results-lucror-analytics" target="_blank" data-smartkarma-citation="insights:44708" rel="noopener">Pan Brothers - Earnings Flash - 9M FY 2020 Results,</a><a href="https://www.smartkarma.com/companies/lucror-analytics" target="_blank" rel="noopener">Lucror Analytics</a> zeros in on the Pan Brothers’ Q3 and 9M2020 earnings. Pan Brothers’ cash flow generation remained poor, and it continued to report large working capital weakness. It appears unlikely that Pan Brothers will be able to increase the size of its syndication facility, given the low commitment from banks at the moment.


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.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.  
Macro InsightsIn Agong Asserts Himself, Preventing Change of PM but Disallowing Emergency Rule, CrossASEAN Chief Economist Prasenjit K. Basu comments on the ongoing political upheaval in Malaysia. In Trouble Down South: It's Not Just the Virus,Dr. Jim Walker gives his prescriptions on why South East Asia has been such a poor performer this year. In Thai Strategy 2021 (Part 1): Key Themes, out Thai guru Athaporn Arayasantiparb, CFA lays out his thoughts for the outlook for the Thai market next year. Equity Bottom-Up InsightsIn his Indonesian Insight, Matahari Department Store (LPPF IJ) - Too Early to Be Early, Cross ASEAN Insight Provider Angus Mackintosh circles back to the country's largest department store operator post its recent results. In AKR Corporindo (AKRA IJ) - Great Omnibus Expectations, CrossASEAN insight provider Angus Mackintosh revisits AKR Corporindo (AKRA IJ) after its recent 3Q2020 results that continued to demonstrate its resilience, with an across the board improvement in margins, despite a decline in sales.In a Malaysian Insight, QL Resources (QL): Take Profit?, CrossASEAN Insight Provider Henry Soediarko revisits this commodity turned retail play, through its Family Mart business. In Far East Hospitality Trust (FEHT): Beneficiary of Opening Up, CrossASEAN Insight Provider Henry Soediarko takes an initial look at Far East Hospitality Trust (FEHT SP), the only hospitality REIT in Singapore with a 100% domestic hospitality exposure and a higher fixed rental component, offering a defensive exposure during this difficult market environment. In BCA – Profit Returns, banking specialist Daniel Tabbush revisits Bank Central Asia (BBCA IJ) and finds the bank clawing back some of the ROA it lost during 2Q2020 in the most recent quarter. In BTS: Potential Positive Catalysts Ahead,Country Group revisit this Thai transportation play with a more positive slant.In PTTEP: 4Q20 Earnings to Soften from Lower ASP and Volume Sales, our friends at Country Group assess the prospects for PTT E&amp;P (PTTEP TB) going into the end of the year.Credit InsightsIn this Insight, Japfa Comfeed - Earnings Flash - 9M FY 2020 Results, Senior Credit Analyst Trung Nguyen discusses Japfa Comfeed Indonesia (JPFA IJ)'s 9M2020 results, which came in worse than expected (following a dismal Q22020), as the impact of COVID-19 reduced consumers' purchasing power and hit demand. In Pan Brothers - Earnings Flash - 9M FY 2020 Results,Lucror Analytics zeros in on the Pan Brothers’ Q3 and 9M2020 earnings. Pan Brothers’ cash flow generation remained poor, and it continued to report large working capital weakness. It appears unlikely that Pan Brothers will be able to increase the size of its syndication facility, given the low commitment from banks at the moment. 

The Week that Was in ASEAN@Smartkarma - South East Asia Lags, the Bank's Return, and Nimble Staples

<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> continues to prove its metal releasing a strong set of 9M2020 results, which saw an across the board improvement in margins, despite a decline in sales.  
This was achieved by healthy contributions from all businesses, strict operating expenses control, tight Working Capital Management, together with lower leverage.
Petroleum volumes remained very healthy, with an increasingly diverse customer mix, whilst chemical volumes were slower given its more economically sensitive. 
The company's JIIPE industrial estate (Jakarta Integrated Industrial and Port Estate) saw further land sales but we should expect further plot sales in 4Q2020 and a much higher number in 2021. 
The <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> smelter is making progress with <a href="https://www.smartkarma.com/entities/chiyoda-corp" target="_blank" data-smartkarma-citation="entities:6232:1" rel="noopener">Chiyoda Corp (6366 JP)</a> appointed as EPC contractor and lease payments coming through on schedule. 
<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a>'s retail petroleum JV with <a href="https://www.smartkarma.com/entities/bp-plc" target="_blank" data-smartkarma-citation="entities:21847:1" rel="noopener">BP PLC (BP/ LN)</a> is recovering with expectations of higher growth in 2021 and 2022. 
<div class="content-highlight">
<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> trades on 11.0x FY21E PER versus its 3-year average forward PER of 15.8x, with the expectation of +16.2% EPS growth in FY21E.  This is an interesting proxy for Indonesia's economic recovery, as well as a play on the potential pick-up in foreign investment on the back of the passage of the Omnibus Law. 
</div>

AKR Corporindo (AKRA IJ) continues to prove its metal releasing a strong set of 9M2020 results, which saw an across the board improvement in margins, despite a decline in sales.  
This was achieved by healthy contributions from all businesses, strict operating expenses control, tight Working Capital Management, together with lower leverage.
Petroleum volumes remained very healthy, with an increasingly diverse customer mix, whilst chemical volumes were slower given its more economically sensitive. 
The company's JIIPE industrial estate (Jakarta Integrated Industrial and Port Estate) saw further land sales but we should expect further plot sales in 4Q2020 and a much higher number in 2021. 
The Freeport Mcmoran (FCX US) smelter is making progress with Chiyoda Corp (6366 JP) appointed as EPC contractor and lease payments coming through on schedule. 
AKR Corporindo (AKRA IJ)'s retail petroleum JV with BP PLC (BP/ LN) is recovering with expectations of higher growth in 2021 and 2022. 

AKR Corporindo (AKRA IJ) trades on 11.0x FY21E PER versus its 3-year average forward PER of 15.8x, with the expectation of +16.2% EPS growth in FY21E.  This is an interesting proxy for Indonesia's economic recovery, as well as a play on the potential pick-up in foreign investment on the back of the passage of the Omnibus Law. 


AKR Corporindo (AKRA IJ) - Great Omnibus Expectations

Japan

CHIYODA CORPORATION constructs, inspects, and maintains industrial plants around the world.  Those plants include oil refinery, petrochemical, food, and pharmaceutical plants.  The Company also provides comprehensive engineering services for such as energy saving, factory automation (FA), and environmental preservation for water treatment and soil purification.

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Chiyoda Corp (6366 JP)

Asian Wind Energy: Efficiency and Cost Reduction in Focus as Players Eye a Post FiT Future

This Smartkarma Original is an in-depth look into the Asian wind energy industry, covering the value chain and related companies at each key stage...

Mio Kato

Asia’s Hydrogen Economy

China's increasing favour towards hydrogen is starting to generate investor interest in potential hydrogen economy and FCV plays. We examine...

Mio Kato

Chiyoda – COVID Uncertainty Continues to Dog Qatar Order

Chiyoda results were mediocre but are unlikely to drive the stock as the key swing factor remains Qatar. The company expects an FID in 2H.

Mio Kato

The Week that Was in ASEAN@Smartkarma - South East Asia Lags, the Bank's Return, and Nimble Staples

The Week that Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights from across South East...

Angus Mackintosh

AKR Corporindo (AKRA IJ) - Great Omnibus Expectations

AKR Corporindo is a key proxy for Indonesia's economic recovery and a play on the potential pick-up in foreign investment on the back of the...

Angus Mackintosh

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