Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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 Bottom-Up

While everyone is raving about the infrastructure investment in Indonesia, only a few of the players are actually making money currently. <a href="https://www.smartkarma.com/entities/12747" target="_blank" data-smartkarma-citation="entities:12747:1">Jasa Marga (Persero) Tbk Pt (JSMR IJ)</a> recorded a revenue increase of 110.6% but suffered gross and margin contraction from 30.5% to 15.8% and 11.3% to 6.3% Y-o-Y respectively. <a href="https://www.smartkarma.com/entities/15739" target="_blank" data-smartkarma-citation="entities:15739:1">Waskita Karya (Persero) Tbk Pt (WSKT IJ)</a> debt-to-equity grew from 114% in 2014 to 196% in 2017 while <a href="https://www.smartkarma.com/entities/1877" target="_blank" data-smartkarma-citation="entities:1877:1">Wijaya Karya Persero Tbk Pt (WIKA IJ)</a> is better but return on asset is a meager 3.4% FY2017. Gigantic debt level and hefty CapEx have been the characteristic for these SOE infrastructure developers and toll road operator. So who is the real beneficiary? Take a look at <a href="https://www.smartkarma.com/entities/2806" target="_blank" data-smartkarma-citation="entities:2806:1">Hexindo Adiperkasa Tbk Pt (HEXA IJ)</a> . Hexindo derives its revenue from sales and rental of heavy equipment, sales of spare parts, and repair and maintenance services. Gross margin from sales and rental of heavy equipment are very narrow but the margin from spare part sales and repair &amp; maintenance made 60 to 90% of the total gross margin. Think of the <a href="https://www.smartkarma.com/entities/11104" target="_blank" data-smartkarma-citation="entities:11104:1">Sany Heavy Equipment Intl (631 HK)</a> of Indonesia but with a better business model. We shall discuss the following:<ol><li>Origin of the company</li><li>Shareholding structure</li><li>Main Business + Customers</li><li>Macro Environment + Business Model Differentiation</li><li>Financials and Valuation</li><li>My two cents</li></ol>

While everyone is raving about the infrastructure investment in Indonesia, only a few of the players are actually making money currently. Jasa Marga (Persero) Tbk Pt (JSMR IJ) recorded a revenue increase of 110.6% but suffered gross and margin contraction from 30.5% to 15.8% and 11.3% to 6.3% Y-o-Y respectively. Waskita Karya (Persero) Tbk Pt (WSKT IJ) debt-to-equity grew from 114% in 2014 to 196% in 2017 while Wijaya Karya Persero Tbk Pt (WIKA IJ) is better but return on asset is a meager 3.4% FY2017. Gigantic debt level and hefty CapEx have been the characteristic for these SOE infrastructure developers and toll road operator. So who is the real beneficiary? Take a look at Hexindo Adiperkasa Tbk Pt (HEXA IJ) . Hexindo derives its revenue from sales and rental of heavy equipment, sales of spare parts, and repair and maintenance services. Gross margin from sales and rental of heavy equipment are very narrow but the margin from spare part sales and repair &amp; maintenance made 60 to 90% of the total gross margin. Think of the Sany Heavy Equipment Intl (631 HK) of Indonesia but with a better business model. We shall discuss the following:Origin of the companyShareholding structureMain Business + CustomersMacro Environment + Business Model DifferentiationFinancials and ValuationMy two cents

Hexindo: Exposure to Infrastructure Theme in Indonesia with No Debt

Indonesia

PT Intraco Penta Tbk trades and leases heavy equipment and related spare parts. The Company also provides services related to assembly and repair.

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Intraco Penta (INTA IJ)

Hexindo: Exposure to Infrastructure Theme in Indonesia with No Debt

While everyone is raving about the infrastructure investment in Indonesia, only a few of the players are actually making money currently. Jasa...

Henry Soediarko

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