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 Bottom-Up

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<p><a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> released a strong set of 1H2021 results with overall revenues up by +23% YoY to IDR4,863,1bn, driven by advertising revenue growth of +27% YoY. Free-to-Air Television advertising revenues grew by +16% YoY to IDR4,595.1bn, whilst digital advertising revenues grew by +117% YoY to IDR889.2bn.</p>
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<p>There was also a strong performance from e-commerce players such as <a href="https://www.smartkarma.com/entities/lazada-group" target="_blank" data-smartkarma-citation="entities:26148:1" rel="noopener">Lazada Group</a>, 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>, <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek</a> &amp; <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia</a>, and BliBli.com, which block-booked primetime slots for entertainment variety shows and promotional events. <a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener"></a>Content is King</p>
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<p><a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> continues to see strong performance from its prime-time blocking programs, which are predominantly for e-commerce companies but also players such as Telkomsel. </p>
<p><a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> continues to see explosive growth from its digital adverting efforts, which saw revenues rise +117% in 1H2021.</p>
<p>Management is also very excited about the prospects for the company's RCTI+ super app, which had 39.8m MAUs at the end of 1H2021 versus 9.5m a year ago, and already hit 50m MAUs in August, with expectations of 60-70m by year-end.</p>
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<p>Management is optimistic that 2H2021 can see even stronger growth and the lack of European Cup costs should see better margins at the same time. <a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a> looks very attractive from a valuation perspective trading on 5.3x FY21E PER and 4.4x FY22E PER versus a 5-year average of 9.3x forward PER.</p>
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Media Nusantara Citra (MNCN IJ) released a strong set of 1H2021 results with overall revenues up by +23% YoY to IDR4,863,1bn, driven by advertising revenue growth of +27% YoY. Free-to-Air Television advertising revenues grew by +16% YoY to IDR4,595.1bn, whilst digital advertising revenues grew by +117% YoY to IDR889.2bn.

There was also a strong performance from e-commerce players such as Lazada Group, Shopee (Sea Ltd (SE US), Gojek &amp; Tokopedia, and BliBli.com, which block-booked primetime slots for entertainment variety shows and promotional events. Content is King

Media Nusantara Citra (MNCN IJ) continues to see strong performance from its prime-time blocking programs, which are predominantly for e-commerce companies but also players such as Telkomsel. 
Media Nusantara Citra (MNCN IJ) continues to see explosive growth from its digital adverting efforts, which saw revenues rise +117% in 1H2021.
Management is also very excited about the prospects for the company's RCTI+ super app, which had 39.8m MAUs at the end of 1H2021 versus 9.5m a year ago, and already hit 50m MAUs in August, with expectations of 60-70m by year-end.




Management is optimistic that 2H2021 can see even stronger growth and the lack of European Cup costs should see better margins at the same time. Media Nusantara Citra (MNCN IJ) looks very attractive from a valuation perspective trading on 5.3x FY21E PER and 4.4x FY22E PER versus a 5-year average of 9.3x forward PER.










Media Nusantara Citra (MNCN IJ) - Increasingly Digital with Gaming to Boot

Thematic (Sector/Industry)

<ul>
<li>Indonesian Digital Banks are an increasing focus for investors given their potential to serve the huge numbers of underbanked in Indonesia through tapping into e-commerce and fintech ecosystems and customers.</li>
<li>Players such as <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago,</a><a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia</a>, <a href="https://www.smartkarma.com/entities/pt-bank-neo-commerce-tbk" target="_blank" data-smartkarma-citation="entities:15245:1" rel="noopener">PT Bank Neo Commerce,</a> and <a href="https://www.smartkarma.com/entities/bank-rakyat-indo-agroniaga" target="_blank" data-smartkarma-citation="entities:16626:1" rel="noopener">Bank Rakyat Indo Agroniaga</a> lead the field with the potential to tap their respective potential ecosystems.</li>
<li>We prefer <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago</a> and <a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia</a>, given the former's exposure to the <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a>'s ecosystem and the latter's to CT Corp, <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak</a>, and <a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (GRAB US)</a>. </li>
</ul>


Indonesian Digital Banks are an increasing focus for investors given their potential to serve the huge numbers of underbanked in Indonesia through tapping into e-commerce and fintech ecosystems and customers.
Players such as Bank Jago,Allo Bank Indonesia, PT Bank Neo Commerce, and Bank Rakyat Indo Agroniaga lead the field with the potential to tap their respective potential ecosystems.
We prefer Bank Jago and Allo Bank Indonesia, given the former's exposure to the GoTo's ecosystem and the latter's to CT Corp, Bukalapak, and Grab (GRAB US). 


Indonesian Digital Banks - Ecosystems and Channels

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 Trades Across Asia Pacific

Event-Driven

Tower Bersama Infrastructure / Event-Driven

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<li>The review period for the LQ45 Index ended on 29 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.</li>
<li>Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat (BBRI)</a> and <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)</a>.</li>
<li>The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.</li>
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The review period for the LQ45 Index ended on 29 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.
Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.


LQ45 Index Rebalance Preview (Jan): Reading the Tea Leaves

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<li>
<a href="https://www.smartkarma.com/entities/gudang-garam-tbk-pt" target="_blank" data-smartkarma-citation="entities:722:1" rel="noopener">Gudang Garam (GGRM IJ)</a> and <a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> will replace <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a> and <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> in the LQ45 Index next week.</li>
<li>There are some large changes to free float plus capping changes for <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 <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI IJ)</a>. </li>
<li>There could be jumps in the stocks of the adds/deletes today, though there should be pre-positioning and a potential reversal later in the week.</li>
</ul>



Gudang Garam (GGRM IJ) and Mitra Adiperkasa (MAPI IJ) will replace Timah Persero (TINS IJ) and Japfa Comfeed Indonesia (JPFA IJ) in the LQ45 Index next week.
There are some large changes to free float plus capping changes for Bank Central Asia (BBCA IJ) and Bank Rakyat Indonesia (BBRI IJ). 
There could be jumps in the stocks of the adds/deletes today, though there should be pre-positioning and a potential reversal later in the week.


​​​LQ45 Index Rebalance: Two Changes in a Few Days

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>MNCN and SCMA will remain relevant during and after the transition to streaming services</li><li>Local content share remains relatively low in SE Asia’s AVOD market, but largely controlled locally, keeping foreign OTT players at bay</li><li>In the meantime, we are of the view that FTA TV revenues will remain resilient until around 2027, by which time the streaming propositions of MNCN and SCMA will be sustainable riding expected consumer tailwinds in the near term</li></ul><p><em>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.</em></p>

MNCN and SCMA will remain relevant during and after the transition to streaming servicesLocal content share remains relatively low in SE Asia’s AVOD market, but largely controlled locally, keeping foreign OTT players at bayIn the meantime, we are of the view that FTA TV revenues will remain resilient until around 2027, by which time the streaming propositions of MNCN and SCMA will be sustainable riding expected consumer tailwinds in the near termContent 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.

Indonesia

PT Media Nusantara Citra Tbk is the largest integrated media company in Southeast Asia. The Company has 3 main businesses 1) 4 free-to-air TV stations with a dominant audience share of 40% 2) The largest content production house producing up to 20,000 hours annually while managing the largest talent agency with almost 400 talents 3) Digital businesses: the largest social media presence in Indonesia through Youtube (100 million subscribers), Facebook and TikTok. 3 online portals, okezone.com, sindonews.com and inews.id with more than 24 million unique visitors daily. RCTI+, the largest entertainment super app in Indonesia with AVOD business model.

Media Nusantara Citra (MNCN IJ)