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

Equity Capital Markets

Cisarua Mountain Dairy / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cisarua-mountain-dairy-pt-tbk" target="_blank" data-smartkarma-citation="entities:34999:1" rel="noopener">Cisarua Mountain Dairy</a> just kicked off its public offering and has set the IPO price slightly below the top of the range and at a slight premium to peers  </li>
<li>Cimory is the leader in Indonesia for yoghurt both spoonable and drinking but has been growing its exposure to UHT milk plus consumer foods such as sausages and chicken nuggets</li>
<li>Proceeds will be used to expand capacity and distribution reach to drive future growth with the introduction of new products helping to drive near term growth. Listing 6th December.</li>
</ul>



Cisarua Mountain Dairy just kicked off its public offering and has set the IPO price slightly below the top of the range and at a slight premium to peers  
Cimory is the leader in Indonesia for yoghurt both spoonable and drinking but has been growing its exposure to UHT milk plus consumer foods such as sausages and chicken nuggets
Proceeds will be used to expand capacity and distribution reach to drive future growth with the introduction of new products helping to drive near term growth. Listing 6th December.


Cisarua Mountain Dairy (Cimory) IPO - A Legend in Dairy

Private Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>'s recent results reflected a resilient performance as growth in deliveries more than offset the slower performance in mobility due to lockdowns across South-East Asia in 3Q2021.</li>
<li>The recovery is ongoing in mobility October and <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> customers are spending more measured by GMV per monthly transacting user MTU plus margins are improving.</li>
<li>
<a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>'s merger with <a href="https://www.smartkarma.com/entities/altimeter-growth-corp" target="_blank" data-smartkarma-citation="entities:33007:1" rel="noopener">Altimeter Growth Corp (AGC US)</a> is on track for a December listing which will also raise US$4.5bn in new funds adding fuel for future expansion</li>
</ul>



Grab's recent results reflected a resilient performance as growth in deliveries more than offset the slower performance in mobility due to lockdowns across South-East Asia in 3Q2021.
The recovery is ongoing in mobility October and Grab customers are spending more measured by GMV per monthly transacting user MTU plus margins are improving.

Grab's merger with Altimeter Growth Corp (AGC US) is on track for a December listing which will also raise US$4.5bn in new funds adding fuel for future expansion


Equity Bottom-Up

Nippon Indosari Corpindo / Equity Bottom-Up

<p>Indonesia's leading bread company <a href="https://www.smartkarma.com/entities/nippon-indosari-corpindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:1181:1" rel="noopener">PT Nippon Indosari Corpindo (ROTI IJ)</a> announced a strong set of results for 1H2021 with net Income up by +33.2%, despite a -7.0% YoY decline in sales. </p>
<p><a href="https://www.smartkarma.com/entities/nippon-indosari-corpindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:1181:1" rel="noopener">PT Nippon Indosari Corpindo( ROTI IJ)</a>'s 1H2021 return rate was improved to 10.4% versus 13.1% last year, as the company quickly anticipated changes in consumer shopping behaviour during the pandemic.</p>
<p>2Q2021 modern trade sales started to recover more than general trade, as the economy started to recover. The fact that malls have been shut in the latest emergency PPKM has been a positive for <a href="https://www.smartkarma.com/entities/nippon-indosari-corpindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:1181:1" rel="noopener">PT Nippon Indosari Corpindo Tbk. (ROTI) (ROTI IJ)</a>. </p>
<p>1H2021 gross margin came under some pressure from rising wheat (flour) prices but ROTI was able to reduce overall operating expenses to offset this coupled with the fact that business no longer had the drag from SMFC in the Philippines.</p>
<p>An encouraging July 2021 indicates significantly increased sales per day for general and modern trade with sales per day hitting close to the record set in 4Q2019.</p>
<p><a href="https://www.smartkarma.com/entities/nippon-indosari-corpindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:1181:1" rel="noopener">PT Nippon Indosari Corpindo (ROTI IJ)</a> remains a core consumer staples holding in Indonesia. It trades on 24.1x FY21E PER and 20.7x PER, with forecast EPS growth of +29.1% and +21.5% for FY21E and FY22E respectively versus its 5-year average forward PER of 27.7x, which looks relatively attractive.</p>

Indonesia's leading bread company PT Nippon Indosari Corpindo (ROTI IJ) announced a strong set of results for 1H2021 with net Income up by +33.2%, despite a -7.0% YoY decline in sales. 
PT Nippon Indosari Corpindo( ROTI IJ)'s 1H2021 return rate was improved to 10.4% versus 13.1% last year, as the company quickly anticipated changes in consumer shopping behaviour during the pandemic.
2Q2021 modern trade sales started to recover more than general trade, as the economy started to recover. The fact that malls have been shut in the latest emergency PPKM has been a positive for PT Nippon Indosari Corpindo Tbk. (ROTI) (ROTI IJ). 
1H2021 gross margin came under some pressure from rising wheat (flour) prices but ROTI was able to reduce overall operating expenses to offset this coupled with the fact that business no longer had the drag from SMFC in the Philippines.
An encouraging July 2021 indicates significantly increased sales per day for general and modern trade with sales per day hitting close to the record set in 4Q2019.
PT Nippon Indosari Corpindo (ROTI IJ) remains a core consumer staples holding in Indonesia. It trades on 24.1x FY21E PER and 20.7x PER, with forecast EPS growth of +29.1% and +21.5% for FY21E and FY22E respectively versus its 5-year average forward PER of 27.7x, which looks relatively attractive.

PT Nippon Indosari Corpindo (ROTI IJ) - Oven Ready

<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> announced its 1Q2021 results which look like a blowout set of numbers with +147% growth in total GAAP revenues with +117% growth in digital bookings for digital entertainment and +250% YoY growth in e-commerce GAAP revenues.</p>
<p>Gross Profit increased a staggering +212% YoY to US$645.4m in 1Q2021 and the company booked a positive EBITDA of US$88.1m versus a (US$69.9m) loss in 1Q2020.</p>
<p>The gross profit margin increased from 28% in 1Q2020 to 36% in 1Q2021, which is a testament to the fact that the company is moving along the path to profitability. Digital entertainment saw higher margins, while-commerce saw falling EBITDA loss per order.</p>
<p>In Digital Entertainment (DE) division continues to see strong growth in its user base with +61% YoY growth in quarterly active users (QAU) to 648.6m but more importantly quarterly paying users saw growth of +12.3% YoY to 79.8m signifying a higher level of monetization on its self-developed game <em>Free Fire.</em></p>
<p>The company continues to successfully expand its gaming business to new geographies, with India being the latest growth engine and players are spending more time on Free Fire and spending more. It continues to add new content and characters to increase the appeal and stickiness of <em>Free Fire</em>. It is also seeing huge response in the eSports arena for <em>Free Fire.</em></p>
<p>Shopee ranked number one in the shopping category by monthly active users and time spent in app in 1Q2021 for both South East Asia and Taiwan, according to App Annie. E-commerce continues to show supercharged growth and especially in the core market of Indonesia.</p>
<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s move into digital payments in South -East Asia under SeaMoney and ShopeePay in Indonesia continues to see strong momentum.  The mobile wallet total payment volume saw total payment volume triple in 1Q2021 to US$3.4bn. </p>
<p>The company is also expanding the offline use-cases for ShopeePay most recently extending use to Indomaret in Indonesia, the largest mini-market operator in the country.</p>
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<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s move into food delivery through ShopeeFood and evidence suggests that it has already had a strong reception to its launch in Jakarta, with growth similar to that in other categories.</p>
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<p>This latest set of results provides further proof of the success of the <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> growth model which generates huge EBITDA from gaming and reinvests that money into growing the company's e-commerce and digital finance businesses, whilst maintaining the investment momentum into the gaming cash cow, buy pushing out into new geographies such as India.</p>
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<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> continues to standout as the best way to play the explosive growth in e-commerce in South East Asia, funded by the popularity of its self developed game <em>Free Fire </em>and its gaming business, together with its move into digital payments a third leg to future growth.</p>
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<section class="figure"><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> valuations are higher than its listed peers on 13x and 9x EV/Sales for FY21E and FY22E respectively but it is growing at more than twice the pace in terms of sales to justify this. The market is also paying a premium for its unique financing plus its market leadership and strong track record on execution, with 11 consecutive quarters of triple-digit growth.</section>
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Sea Ltd (SE US) announced its 1Q2021 results which look like a blowout set of numbers with +147% growth in total GAAP revenues with +117% growth in digital bookings for digital entertainment and +250% YoY growth in e-commerce GAAP revenues.
Gross Profit increased a staggering +212% YoY to US$645.4m in 1Q2021 and the company booked a positive EBITDA of US$88.1m versus a (US$69.9m) loss in 1Q2020.
The gross profit margin increased from 28% in 1Q2020 to 36% in 1Q2021, which is a testament to the fact that the company is moving along the path to profitability. Digital entertainment saw higher margins, while-commerce saw falling EBITDA loss per order.
In Digital Entertainment (DE) division continues to see strong growth in its user base with +61% YoY growth in quarterly active users (QAU) to 648.6m but more importantly quarterly paying users saw growth of +12.3% YoY to 79.8m signifying a higher level of monetization on its self-developed game Free Fire.
The company continues to successfully expand its gaming business to new geographies, with India being the latest growth engine and players are spending more time on Free Fire and spending more. It continues to add new content and characters to increase the appeal and stickiness of Free Fire. It is also seeing huge response in the eSports arena for Free Fire.
Shopee ranked number one in the shopping category by monthly active users and time spent in app in 1Q2021 for both South East Asia and Taiwan, according to App Annie. E-commerce continues to show supercharged growth and especially in the core market of Indonesia.
Sea Ltd (SE US)'s move into digital payments in South -East Asia under SeaMoney and ShopeePay in Indonesia continues to see strong momentum.  The mobile wallet total payment volume saw total payment volume triple in 1Q2021 to US$3.4bn. 
The company is also expanding the offline use-cases for ShopeePay most recently extending use to Indomaret in Indonesia, the largest mini-market operator in the country.

Sea Ltd (SE US)'s move into food delivery through ShopeeFood and evidence suggests that it has already had a strong reception to its launch in Jakarta, with growth similar to that in other categories.

This latest set of results provides further proof of the success of the Sea Ltd (SE US) growth model which generates huge EBITDA from gaming and reinvests that money into growing the company's e-commerce and digital finance businesses, whilst maintaining the investment momentum into the gaming cash cow, buy pushing out into new geographies such as India.



Sea Ltd (SE US) continues to standout as the best way to play the explosive growth in e-commerce in South East Asia, funded by the popularity of its self developed game Free Fire and its gaming business, together with its move into digital payments a third leg to future growth.

Sea Ltd (SE US) valuations are higher than its listed peers on 13x and 9x EV/Sales for FY21E and FY22E respectively but it is growing at more than twice the pace in terms of sales to justify this. The market is also paying a premium for its unique financing plus its market leadership and strong track record on execution, with 11 consecutive quarters of triple-digit growth.

















Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

<p>The company benefits from its ties in MT with Alfamart and Indomart as it has higher hygiene perception and less chance of contact with another person which is appreciated during COVID-19. <a href="https://www.smartkarma.com/entities/industri-jamu-dan-farmasi-sido-muncul-tbk-pt" target="_blank" data-smartkarma-citation="entities:6033:1" rel="noopener">Sido Muncul (SIDO IJ)</a> Q2 2020 had a nice surprise where consumers switched from Tolak Angin to other products such as Vitamin C 1000 powder drink and Ginger-flavor beverages.</p><p>Bintang Toedjoe's clinical trial on red ginger may have a negative impact in the short term but it presents a long term opportunity in the long run that Tolak Angin and other SIDO's products have an improved global acceptance, therefore, easier to sell in other countries. </p><p>Post a share price increase from IDR 500 to 1400 in the past three years, the management feels that a 1 to 2 stock split is appropriate and it will happen sometime this month. This will create more liquidity and a share price that is affordable for retail investors (around IDR 700) thus <strong>a new entry point</strong> for investors who think they missed out on SIDO as the share price was deemed too expensive.</p>

The company benefits from its ties in MT with Alfamart and Indomart as it has higher hygiene perception and less chance of contact with another person which is appreciated during COVID-19. Sido Muncul (SIDO IJ) Q2 2020 had a nice surprise where consumers switched from Tolak Angin to other products such as Vitamin C 1000 powder drink and Ginger-flavor beverages.Bintang Toedjoe's clinical trial on red ginger may have a negative impact in the short term but it presents a long term opportunity in the long run that Tolak Angin and other SIDO's products have an improved global acceptance, therefore, easier to sell in other countries. Post a share price increase from IDR 500 to 1400 in the past three years, the management feels that a 1 to 2 stock split is appropriate and it will happen sometime this month. This will create more liquidity and a share price that is affordable for retail investors (around IDR 700) thus a new entry point for investors who think they missed out on SIDO as the share price was deemed too expensive.

Sido Muncul (SIDO): Switch, Competitor and Split

Indonesia

Indoritel Makmur Internasional Tbk is an investment holding company that focuses on the consumer and retail industries in Indonesia, with significant stakes in retail and telecommunications companies. It also provides fiber optic-based telecommunication data connection services to business and home customers, and is involved in e-commerce and digital services. The company was founded in 1995 and is headquartered in Jakarta Selatan, Indonesia.

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Indoritel Makmur Internasional (DNET IJ)

Cisarua Mountain Dairy (Cimory) IPO - A Legend in Dairy

Cimory is the leader in Indonesia for yoghurt both spoonable and drinking but has been growing its exposure to UHT milk plus consumer foods in a...

Angus Mackintosh

Grab - Resilience in Motion

Grab's recent results reflected a resilient performance as growth in deliveries more than offset the slower performance in mobility due to...

Angus Mackintosh

PT Nippon Indosari Corpindo (ROTI IJ) - Oven Ready

PT Nippon Indosari Corpindo (ROTI IJ) remains a core consumer staples holding in Indonesia, as the leader in mass-market bread, with new growth...

Angus Mackintosh

Sea Ltd - Supercharged

Sea Ltd (SE US) is the best way to proxy for the explosive growth in e-commerce in South East Asia, funded by its gaming revenue, with its move...

Angus Mackintosh

Sido Muncul (SIDO): Switch, Competitor and Split

Structure: sales does not go as planned?

Henry Soediarko

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