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

Thailand plans to fully reopen to foreign visitors in 120 days, given it aims to give at least one dose of vaccine to the majority of residents by early October.
The country aims for some tourist destinations to be open to fully vaccinated visitors without any quarantine requirement before this time. Phuket is seen as the “pilot” for the new scheme.
Thailand's economy is highly dependent on tourism with around 12% of GDP officially from tourism but the true exposure is closer to 20% given all the related industries outside travel and hotels from retail to banks. 
These most recent plans were unveiled in an address by Prime Minister Prayuth Chan-Ocha in a National address yesterday, which included a number of important concessions, which can be seen in the detailed section.
We recommend increasing weightings in Thai hotels, hospitals, selective retailers, and banks to play this tourism recovery theme. Please see below for details.

Thailand plans to fully reopen to foreign visitors in 120 days, given it aims to give at least one dose of vaccine to the majority of residents by early October.
The country aims for some tourist destinations to be open to fully vaccinated visitors without any quarantine requirement before this time. Phuket is seen as the “pilot” for the new scheme.
Thailand's economy is highly dependent on tourism with around 12% of GDP officially from tourism but the true exposure is closer to 20% given all the related industries outside travel and hotels from retail to banks. 
These most recent plans were unveiled in an address by Prime Minister Prayuth Chan-Ocha in a National address yesterday, which included a number of important concessions, which can be seen in the detailed section.
We recommend increasing weightings in Thai hotels, hospitals, selective retailers, and banks to play this tourism recovery theme. Please see below for details. 

Thailand - 120 Days Later - Fully Vaccinated Tourism to Resume

Equity Bottom-Up

A  call with <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> management post the company's recent results revealed a more cautious tone given the recent pick-up in COVID-19 cases in the so-called "third wave". 
Restaurants remain open and dining in is allowed although not permitted to serve alcohol and bars and nightclubs are shut under the current measures. Alcohol can be sold through retail outlets for consumption at home. Big C and Mini Big continue to sell alcohol through all of their outlets. 
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> continued to experience difficult YoY comparisons for its packaging supply chain business, which is focused on glass bottling and aluminium cans, given that there was some stocking upon glass bottles last year in 1Q. 
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> consumer supply chain division had a mixed picture given that non-food had a high base last year since tissue sales were very strong in 1Q2020, as was personal care, whilst demand for snacks remained soft.
For the company's healthcare and technical supply chain (H&amp;TSC), it saw a positive performance for the technical side, mainly driven by food additives but the lube business was relatively weaker
The company's core modern supply chain division, which consists mainly of its Big C retail business, continues to see big declines in both sales and SSSG given that January and February last year were relatively normal ahead of the onset of the pandemic. The higher portion of B2B sales to offset competition from traditional trade has negatively impacted margins slightly.
Big C continues to expand its store network with plans to add two new Big C hypermarkets this year and 100 mini-Big C proximity stores. There are also a number of Big C Marketplace stores being converted to other formats including Big C Depot and Food Place.
Omnichannel sales are growing, which include sales through Line and Whatsapp as well as various online channels now account for just under 3% of sales.
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> will continue to face headwinds in 2Q2021, as the third wave impacts mobility and beer sales but YoY comparisons will start to get easier. We continue to see <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> as an interesting proxy to the consumer recovery, not just in Thailand but also to South East Asia, given its exposure in Vietnam, and Malaysia. It remains cheap relative to peers, with a stronger growth outlook for the next two years.

A  call with Berli Jucker (BJC TB) management post the company's recent results revealed a more cautious tone given the recent pick-up in COVID-19 cases in the so-called "third wave". 
Restaurants remain open and dining in is allowed although not permitted to serve alcohol and bars and nightclubs are shut under the current measures. Alcohol can be sold through retail outlets for consumption at home. Big C and Mini Big continue to sell alcohol through all of their outlets. 
Berli Jucker (BJC TB) continued to experience difficult YoY comparisons for its packaging supply chain business, which is focused on glass bottling and aluminium cans, given that there was some stocking upon glass bottles last year in 1Q. 
Berli Jucker (BJC TB) consumer supply chain division had a mixed picture given that non-food had a high base last year since tissue sales were very strong in 1Q2020, as was personal care, whilst demand for snacks remained soft.
For the company's healthcare and technical supply chain (H&amp;TSC), it saw a positive performance for the technical side, mainly driven by food additives but the lube business was relatively weaker
The company's core modern supply chain division, which consists mainly of its Big C retail business, continues to see big declines in both sales and SSSG given that January and February last year were relatively normal ahead of the onset of the pandemic. The higher portion of B2B sales to offset competition from traditional trade has negatively impacted margins slightly.
Big C continues to expand its store network with plans to add two new Big C hypermarkets this year and 100 mini-Big C proximity stores. There are also a number of Big C Marketplace stores being converted to other formats including Big C Depot and Food Place.
Omnichannel sales are growing, which include sales through Line and Whatsapp as well as various online channels now account for just under 3% of sales.
Berli Jucker (BJC TB) will continue to face headwinds in 2Q2021, as the third wave impacts mobility and beer sales but YoY comparisons will start to get easier. We continue to see Berli Jucker (BJC TB) as an interesting proxy to the consumer recovery, not just in Thailand but also to South East Asia, given its exposure in Vietnam, and Malaysia. It remains cheap relative to peers, with a stronger growth outlook for the next two years.

Berli Jucker (BJC TB) - Stock-Up for Canned Recovery?

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt15.6, which is derived from 33xPE’21E, a 40% premium to Thai Consumer Discretionary.<div>• SSSG turned to positive at double digit growth in April 2021 due to the low base from last year. Meanwhile, we believe SSSG in 2Q21 will improve to 5% from +0.6% and -6.3% in 1Q21 and 4Q20, respectively.  </div><div></div><div>• We foresee 2Q21 earnings to grow YoY from a low base in 2Q20 but flat QoQ driven by gross profit margin expansion from increasing product mix toward more on private label segment.</div><div>
 
</div>We still like HMPRO for its 1) the margin expansion on the back of increasing revenue contribution from private label segment, 2) strong recovery of its SSSG following a development in COVID-19 vaccination progress, 3) potential revenue from of Omni-channel as it will be key revenue driver in the long term, and, 4) potential branch expansion in overseas market such as Vietnam.

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt15.6, which is derived from 33xPE’21E, a 40% premium to Thai Consumer Discretionary.• SSSG turned to positive at double digit growth in April 2021 due to the low base from last year. Meanwhile, we believe SSSG in 2Q21 will improve to 5% from +0.6% and -6.3% in 1Q21 and 4Q20, respectively.  • We foresee 2Q21 earnings to grow YoY from a low base in 2Q20 but flat QoQ driven by gross profit margin expansion from increasing product mix toward more on private label segment.
 
We still like HMPRO for its 1) the margin expansion on the back of increasing revenue contribution from private label segment, 2) strong recovery of its SSSG following a development in COVID-19 vaccination progress, 3) potential revenue from of Omni-channel as it will be key revenue driver in the long term, and, 4) potential branch expansion in overseas market such as Vietnam.

HMPRO: Expect 2Q21 Earnings Recover YoY from Low Base

A conversation with <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> management post its recent results revealed a company primed for a rebound as the Thai economy recovers and eventually tourism recovers.
4Q2020 saw some recovery QoQ with the glass and aluminium can businesses only down slightly versus 4Q2019. The was despite major repair (scheduled) to one of the company's glass furnaces in 4Q2020 with a 60-day shutdown.
Demand for aluminium cans was impacted by the lack of tourists and less cross-border trade but boosted by new RTD customers plus the introduction of new can variants, which will continue into 2021. 
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> has already added new aluminium can capacity to take advantage of increased demand in Vietnam from Sabeco. 
Big C continues to suffer from a high-base effect from last year and will also suffer from this in 2Q2021 before YoY comparisons start to improve in 2Q2021. 
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> will resume its store expansion and widespread renovation in 2021, which will support future growth and returns. 
The company is taking a more digital approach to marketing using Nielsen data plus collaborating with platforms such as Food Panda, Happy Fresh, Shopee (<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>), and Lazada to sell more online. 
Competitive pressures remain as always although probably lessening from Tesco as it is slowly rebranded under Lotus, with the main pressure for Big C now coming from government copayment schemes, which have just been extended. 
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> will start to see much better numbers from 2Q2021 but 1Q2021 should see sequential improvements QoQ, underlining the momentum behind the recovery.  
<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a>trades on 25.5x FY21E PER and 21.6x FY22E PER versus its 5-year aveRage forward PER of 29.4x. The company is also expected to see EPS growth of +44% and +18% for FY21E and FY22E respectively, making it look like an attractive recovery prospect and looks like good value versus peers.

A conversation with Berli Jucker (BJC TB) management post its recent results revealed a company primed for a rebound as the Thai economy recovers and eventually tourism recovers.
4Q2020 saw some recovery QoQ with the glass and aluminium can businesses only down slightly versus 4Q2019. The was despite major repair (scheduled) to one of the company's glass furnaces in 4Q2020 with a 60-day shutdown.
Demand for aluminium cans was impacted by the lack of tourists and less cross-border trade but boosted by new RTD customers plus the introduction of new can variants, which will continue into 2021. 
Berli Jucker (BJC TB) has already added new aluminium can capacity to take advantage of increased demand in Vietnam from Sabeco. 
Big C continues to suffer from a high-base effect from last year and will also suffer from this in 2Q2021 before YoY comparisons start to improve in 2Q2021. 
Berli Jucker (BJC TB) will resume its store expansion and widespread renovation in 2021, which will support future growth and returns. 
The company is taking a more digital approach to marketing using Nielsen data plus collaborating with platforms such as Food Panda, Happy Fresh, Shopee (Sea Ltd (SE US)), and Lazada to sell more online. 
Competitive pressures remain as always although probably lessening from Tesco as it is slowly rebranded under Lotus, with the main pressure for Big C now coming from government copayment schemes, which have just been extended. 
Berli Jucker (BJC TB) will start to see much better numbers from 2Q2021 but 1Q2021 should see sequential improvements QoQ, underlining the momentum behind the recovery.  
Berli Jucker (BJC TB)trades on 25.5x FY21E PER and 21.6x FY22E PER versus its 5-year aveRage forward PER of 29.4x. The company is also expected to see EPS growth of +44% and +18% for FY21E and FY22E respectively, making it look like an attractive recovery prospect and looks like good value versus peers.

Berli Jucker (BJC TB) - Primed for Rebound

<a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> is finally starting to see the light of day across is numerous consumer-related businesses in3Q2020, from its core Thai retail business through BigC to its aluminum can and glass bottling across SE Asia, as well as its consumer supply chain business. The company's packaging supply chain business, which includes glass bottling and aluminum cans continues to see improvements since the trough in 2Q2020, with cans driving by new sizes. <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a>'s Big C retail business under modern supply chain continues to suffer from the lack of tourists in Thailand but is seeing some improvements with Mini BigC doing especially well. Rentals have started to pick up, which is positive for profitability going forward. The company's consumer supply chain business has seen a decent pick up with 3Q2020 sales growing by +15.1% YoY and +12.6% YoY for 9M2020 driven by non-food, international trading, and logistics.Valuations look attractive versus historical levels, especially in view of an impending recovery, with the company trading on 22.7x FY21E PER versus its 3-year average of 28.3x forward PER.

Berli Jucker (BJC TB) is finally starting to see the light of day across is numerous consumer-related businesses in3Q2020, from its core Thai retail business through BigC to its aluminum can and glass bottling across SE Asia, as well as its consumer supply chain business. The company's packaging supply chain business, which includes glass bottling and aluminum cans continues to see improvements since the trough in 2Q2020, with cans driving by new sizes. Berli Jucker (BJC TB)'s Big C retail business under modern supply chain continues to suffer from the lack of tourists in Thailand but is seeing some improvements with Mini BigC doing especially well. Rentals have started to pick up, which is positive for profitability going forward. The company's consumer supply chain business has seen a decent pick up with 3Q2020 sales growing by +15.1% YoY and +12.6% YoY for 9M2020 driven by non-food, international trading, and logistics.Valuations look attractive versus historical levels, especially in view of an impending recovery, with the company trading on 22.7x FY21E PER versus its 3-year average of 28.3x forward PER. 

Berli Jucker (BJC TB) - Consumer Kingpin on the Cusp of Recovery

Thailand

Home Product Center Public Company Limited is a retailer of building materials and home improvement products.

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Home Product Center (HMPRO TB)

Thailand - 120 Days Later - Fully Vaccinated Tourism to Resume

Thailand plans reopen to reopen its borders to the fully vaccinated in 120 days without quarantine restrictions, which will be a boon for the...

Angus Mackintosh

Berli Jucker (BJC TB) - Stock-Up for Canned Recovery?

Berli Jucker is an interesting proxy to the consumer recovery in Thailand and South-East Asia, through its packaging, retail, and consumer supply...

Angus Mackintosh

HMPRO: Expect 2Q21 Earnings Recover YoY from Low Base

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt15.6, which is derived from 33xPE’21E, a...

Pi Securities PCL, Thailand

Berli Jucker (BJC TB) - Primed for Rebound

Berli Jucker is an interesting proxy for the consumer rebound in Thailand and Vietnam through its consumer packaging, retail, and other consumer...

Angus Mackintosh

Berli Jucker (BJC TB) - Consumer Kingpin on the Cusp of Recovery

Berli Jucker (BJC TB) remains an interesting proxy for domestic consumer recovery in SE Asia through its consumer packaging business, and more...

Angus Mackintosh

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