External broker reports(aggregated public sources), UOB Kay Hian

UOB Kay Hian

External broker reports(aggregated public sources)

Backed by the UOB Group, UOB Kay Hian is one of Asia’s largest brokerage firms. Headquartered in Singapore, we are supported by more than 80 branches worldwide including a growing network of offices across Southeast Asia, Greater China, the United Kingdom and North America. Our global footprint and strong international presence have enabled us to feel the pulse of key financial markets and deliver incisive intelligence across industry sectors and asset classes. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Emperador reported strong 1Q23 PATMI growth of 10.5% y-o-y, largely driven by the Scotch whisky segment.</li><li>Despite higher brandy segmental revenue, overall inflationary cost-push continues to pressure brandy margins.</li><li>Emperador’s Scotch whisky segment outperformed on higher ASPs and demand.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Emperador reported strong 1Q23 PATMI growth of 10.5% y-o-y, largely driven by the Scotch whisky segment.Despite higher brandy segmental revenue, overall inflationary cost-push continues to pressure brandy margins.Emperador’s Scotch whisky segment outperformed on higher ASPs and demand.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Emperador - Robust 1Q23 Performance Led By Scotch Whisky

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

<ul>
<li>From December 2022, the minimum free float requirement to be a part of the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> increases from 15% to 20%.</li>
<li>This could result in three deletions from the index which will result in three stocks being added to the index. Passive trackers selling the deletes will push the stocks lower.</li>
<li>The three current constituents could remain in the index if they sell stock to increase the free float. That would in turn put downward pressure on the stocks.</li>
</ul>


From December 2022, the minimum free float requirement to be a part of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) increases from 15% to 20%.
This could result in three deletions from the index which will result in three stocks being added to the index. Passive trackers selling the deletes will push the stocks lower.
The three current constituents could remain in the index if they sell stock to increase the free float. That would in turn put downward pressure on the stocks.


PCOMP Index Rebalance Preview Feb 23: Updated Methodology to Drive Changes

Semirara Mining And Power Corp / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/semirara-mining-and-power-corporation" target="_blank" data-smartkarma-citation="entities:18925:1" rel="noopener">Semirara Mining And Power Corp (SCC PM)</a> will replace <a href="https://www.smartkarma.com/entities/security-bank-corp" target="_blank" data-smartkarma-citation="entities:3929:1" rel="noopener">Security Bank (SECB PM)</a> in the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> at the close of trading on 5 August.</li>
<li>Passive trackers will need to buy 5.5 days of ADV on <a href="https://www.smartkarma.com/entities/semirara-mining-and-power-corporation" target="_blank" data-smartkarma-citation="entities:18925:1" rel="noopener">Semirara Mining And Power Corp (SCC PM)</a> and sell nearly 30 days of ADV on <a href="https://www.smartkarma.com/entities/security-bank-corp" target="_blank" data-smartkarma-citation="entities:3929:1" rel="noopener">Security Bank (SECB PM)</a>.</li>
<li>Historically, the adds have outperformed the deletes and there has been a pop/drop in the adds/deletes the day after announcement. Square off existing pre-positions by mid week.</li>
</ul>



Semirara Mining And Power Corp (SCC PM) will replace Security Bank (SECB PM) in the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the close of trading on 5 August.
Passive trackers will need to buy 5.5 days of ADV on Semirara Mining And Power Corp (SCC PM) and sell nearly 30 days of ADV on Security Bank (SECB PM).
Historically, the adds have outperformed the deletes and there has been a pop/drop in the adds/deletes the day after announcement. Square off existing pre-positions by mid week.


PCOMP Index Rebalance: Semirara Mining (SCC) Replaces Security Bank (SECB)

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

<a href="https://www.smartkarma.com/entities/ginebra-san-miguel-inc" target="_blank" data-smartkarma-citation="entities:23029:1" rel="noopener">Ginebra San Miguel (GSMI PM)</a> is the world’s best-selling gin brand. It owns 97% of the Filipino gin market. It has a 185-year relationship with Filipinos and is synonymous with gin in the country. Its products are priced at 1/6th the price of large international competitors making its only competition other value for money spirits within the Philippines.Over the last five years, it started to regain share from other liquor products growing its top line at a CAGR of 14%. The gin market is expected to grow at 8% over the next few years. Over the last five years, it drastically improved its gross margin, operational efficiency, and capital efficiency leading to operating profit increasing at an average annual rate of 39% and pre-tax ROIC increasing from 4.7% in 2014 to 32.7% in 2019.There are some corporate governance concerns but those are more than priced in with GSMI trading below 3 times TTM EBITDA. Its closest competitor <a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador Inc (EMP PM)</a> is growing slower and generates a lower ROIC, but trades at 17 times 2019 EBITDA. Under the base case, there is 271% upside to the 2025 fair value per share of PHP194.22. Ginebra San Miguel looks attractive at current prices.

Ginebra San Miguel (GSMI PM) is the world’s best-selling gin brand. It owns 97% of the Filipino gin market. It has a 185-year relationship with Filipinos and is synonymous with gin in the country. Its products are priced at 1/6th the price of large international competitors making its only competition other value for money spirits within the Philippines.Over the last five years, it started to regain share from other liquor products growing its top line at a CAGR of 14%. The gin market is expected to grow at 8% over the next few years. Over the last five years, it drastically improved its gross margin, operational efficiency, and capital efficiency leading to operating profit increasing at an average annual rate of 39% and pre-tax ROIC increasing from 4.7% in 2014 to 32.7% in 2019.There are some corporate governance concerns but those are more than priced in with GSMI trading below 3 times TTM EBITDA. Its closest competitor Emperador Inc (EMP PM) is growing slower and generates a lower ROIC, but trades at 17 times 2019 EBITDA. Under the base case, there is 271% upside to the 2025 fair value per share of PHP194.22. Ginebra San Miguel looks attractive at current prices.

Ginebra San Miguel- The World’s Best Selling Gin Brand On Sale for Under 3 Times TTM EBITDA

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

<ul>
<li>We highlight 14 stocks in ASEAN that look interesting to us based on our FVMR Methodology</li>
<li>Portfolio changes: One stocks remain, and 13 stocks are added</li>
<li>Since its inception, the portfolio has generated a before-fee total return of 196% versus MSCI ASEAN’s 25%</li>
</ul>


We highlight 14 stocks in ASEAN that look interesting to us based on our FVMR Methodology
Portfolio changes: One stocks remain, and 13 stocks are added
Since its inception, the portfolio has generated a before-fee total return of 196% versus MSCI ASEAN’s 25%


Philippines

Emperador, Inc. operates in the beverage industry. The Company, through  its subsidiary, produces and markets brandy.

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Emperador (EMP PM)

Emperador - Robust 1Q23 Performance Led By Scotch Whisky

Despite higher brandy segmental revenue, overall inflationary cost-push continues to pressure brandy margins. Emperador’s Scotch whisky segment...

UOB Kay Hian

PCOMP Index Rebalance Preview Feb 23: Updated Methodology to Drive Changes

A methodology change that increases the minimum free float from 15% to 20% could result in 3 changes to the index. The three constituents will need...

Brian Freitas

PCOMP Index Rebalance: Semirara Mining (SCC) Replaces Security Bank (SECB)

Semirara Mining will replace Security Bank in the PCOMP at the close on 5 August. There are 5 trading days to implementation and passive fund...

Brian Freitas

Ginebra San Miguel- The World’s Best Selling Gin Brand On Sale for Under 3 Times TTM EBITDA

Ginebra San Miguel is the maker of the world’s best-selling gin brand. It has a net cash position, its sales are growing, and its operating margin...

Reperio Capital

The Stocks to Own in ASEAN – Vol. 44

We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology. Portfolio changes: One stocks remain, 13 stocks added.

A. Stotz Investment Research

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