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

<div class="content-highlight">
The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets. 
</div><h3>Equity Bottom-Up Insights</h3>In <a href="https://www.smartkarma.com/insights/berli-jucker-bjc-tb-consumer-kingpin-on-the-cusp-of-recovery" target="_blank" data-smartkarma-citation="insights:46419" rel="noopener">Berli Jucker (BJC TB) - Consumer Kingpin on the Cusp of Recovery</a> CrossASEAN Insight Porvider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits since South East Asian consumer player after a call with management and sees recovery ahead. In <a href="https://www.smartkarma.com/insights/ultrajaya-milk-industry-trading-ultj-ij-simmering-recovery" target="_blank" data-smartkarma-citation="insights:44839" rel="noopener">Ultrajaya Milk Industry &amp; Trading (ULTJ IJ) - Simmering Recovery</a>, <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> returns to look at Indonesia's leading dairy player after a conversation with management. In <a href="https://www.smartkarma.com/insights/starhub-sth-disney-is-coming-but-enterprise-is-gaining-momentum" target="_blank" data-smartkarma-citation="insights:46486" rel="noopener">Starhub (STH): Disney Is Coming but Enterprise Is Gaining Momentum</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" data-smartkarma-citation="accounts:1006" rel="noopener">Henry Soediarko</a> revisits this Singapore Pay Tv player.In <a href="https://www.smartkarma.com/insights/kerry-express-thailand-ipo-trading-delivering-a-christmas-present" target="_blank" data-smartkarma-citation="insights:46459" rel="noopener">Kerry Express Thailand IPO Trading - Delivering a Christmas Present,</a><a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" data-smartkarma-citation="accounts:4" rel="noopener">Sumeet Singh</a> revists <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> post its recent listing.In <a href="https://www.smartkarma.com/insights/kerry-express-thailand-just-one-day-into-public-life-kex-suddenly-looks-expensive" target="_blank" data-smartkarma-citation="insights:46609" rel="noopener">Kerry Express Thailand: Just One Day Into Public Life, KEX Suddenly Looks Expensive,</a><a href="https://www.smartkarma.com/profiles/daniel-hellberg" target="_blank" data-smartkarma-citation="accounts:605" rel="noopener">Daniel Hellberg</a> revisits <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> post its strong listing debut.In <a href="https://www.smartkarma.com/insights/security-bank-positive-transformation" target="_blank" data-smartkarma-citation="insights:46564" rel="noopener">Security Bank – Positive Transformation</a><a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> takes a look at this Philippines lender which he sees as making positive strategic moves towards higher profitability.In <a href="https://www.smartkarma.com/insights/stubworld-jardine-cycle-carriage-back-to-msci-deletion-levels" target="_blank" data-smartkarma-citation="insights:46568" rel="noopener">StubWorld: Jardine Cycle &amp; Carriage - Back To MSCI Deletion Levels,</a><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> revists <a href="https://www.smartkarma.com/insights/stubworld-jardine-cycle-carriage-back-to-msci-deletion-levels" target="_blank" data-smartkarma-citation="insights:46568" rel="noopener">StubWorld: Jardine Cycle &amp; Carriage - Back To MSCI Deletion Levels</a> which he finds attractive following a recent correction. In <a href="https://www.smartkarma.com/insights/fgv-holdings-low-ball-mto-triggered" target="_blank" data-smartkarma-citation="insights:46604" rel="noopener">FGV Holdings: Low-Ball MTO Triggered,</a><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> take a look at this shadowy FELDA backed takeover. In <a href="https://www.smartkarma.com/insights/sgx-first-puts-sgx-first-in-the-ranks-of-asia-s-most-sustainable-stock-exchanges" target="_blank" data-smartkarma-citation="insights:46542" rel="noopener">SGX FIRST Puts SGX First in the Ranks of Asia's Most Sustainable Stock Exchanges,</a> ESG Specialist <a href="https://www.smartkarma.com/profiles/kyle-rudden" target="_blank" data-smartkarma-citation="accounts:4495" rel="noopener">Kyle Rudden</a> comments on the <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP)</a> new multi-partner sustainability initiative.In <a href="https://www.smartkarma.com/insights/mint-global-player-in-hospitality-and-food-chains" target="_blank" data-smartkarma-citation="insights:46627" rel="noopener">MINT: Global Player in Hospitality and Food Chains,</a> our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> initiate coverage on <a href="https://www.smartkarma.com/entities/minor-international-pcl" target="_blank" data-smartkarma-citation="entities:2154:1" rel="noopener">Minor International (MINT TB)</a>, which operates hotels and restaurants Thailand, around the Asia region and increasingly globally.<h3>Sector and Thematic Insights </h3>In <a href="https://www.smartkarma.com/insights/overview-of-my-winners-and-losers-in-2020-and-5-high-conviction-ideas-going-into-2021" target="_blank" data-smartkarma-citation="insights:46557" rel="noopener">Overview of My Winners and Losers in 2020...And 5 High Conviction Ideas Going into 2021,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a> provides an overview of his winners and losers for 2020 and lays out his picks for 2021. In <a href="https://www.smartkarma.com/insights/thai-food-titans-cpf-and-thai-union" target="_blank" data-smartkarma-citation="insights:43730" rel="noopener">Thai Food Titans: CPF and Thai Union,</a> our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> reports back after meeting with two of Thailand's largest food companies, namely <a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a> (chicken, pork) and <a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a> (seafood). In <a href="https://www.smartkarma.com/insights/financial-beneficiaries-of-pandemic-sawad-and-chayo" target="_blank" data-smartkarma-citation="insights:43733" rel="noopener">Financial Beneficiaries of Pandemic: SAWAD and Chayo</a>, <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> explores two companies in financial services stand to benefit from lending to people in need during the COVID-19 pandemic. <h3>Credit Insights</h3>In <a href="https://www.smartkarma.com/insights/morning-views-asia-olam-international-4464efd6-3e3b-41f2-b305-11dd6b8970c2" target="_blank" data-smartkarma-citation="insights:46588" rel="noopener">Morning Views Asia: Olam International</a><a href="https://www.smartkarma.com/profiles/leonard-law-cfa" target="_blank" data-smartkarma-citation="accounts:7106" rel="noopener">Leonard Law, CFA</a> reports back on <a href="https://www.smartkarma.com/entities/olam-international-ltd" target="_blank" data-smartkarma-citation="entities:765:1" rel="noopener">Olam International (OLAM SP)</a> from a credit perspective post a business update for Q1 from the company, in line with its move away from quarterly results reporting.


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets. 
Equity Bottom-Up InsightsIn Berli Jucker (BJC TB) - Consumer Kingpin on the Cusp of Recovery CrossASEAN Insight Porvider Angus Mackintosh revisits since South East Asian consumer player after a call with management and sees recovery ahead. In Ultrajaya Milk Industry &amp; Trading (ULTJ IJ) - Simmering Recovery, Angus Mackintosh returns to look at Indonesia's leading dairy player after a conversation with management. In Starhub (STH): Disney Is Coming but Enterprise Is Gaining Momentum CrossASEAN Insight Provider Henry Soediarko revisits this Singapore Pay Tv player.In Kerry Express Thailand IPO Trading - Delivering a Christmas Present,Sumeet Singh revists Kerry Express Thailand (KEX TB) post its recent listing.In Kerry Express Thailand: Just One Day Into Public Life, KEX Suddenly Looks Expensive,Daniel Hellberg revisits Kerry Express Thailand (KEX TB) post its strong listing debut.In Security Bank – Positive TransformationDaniel Tabbush takes a look at this Philippines lender which he sees as making positive strategic moves towards higher profitability.In StubWorld: Jardine Cycle &amp; Carriage - Back To MSCI Deletion Levels,David Blennerhassett revists StubWorld: Jardine Cycle &amp; Carriage - Back To MSCI Deletion Levels which he finds attractive following a recent correction. In FGV Holdings: Low-Ball MTO Triggered,David Blennerhassett take a look at this shadowy FELDA backed takeover. In SGX FIRST Puts SGX First in the Ranks of Asia's Most Sustainable Stock Exchanges, ESG Specialist Kyle Rudden comments on the SGX (SGX SP) new multi-partner sustainability initiative.In MINT: Global Player in Hospitality and Food Chains, our friends at Country Group initiate coverage on Minor International (MINT TB), which operates hotels and restaurants Thailand, around the Asia region and increasingly globally.Sector and Thematic Insights In Overview of My Winners and Losers in 2020...And 5 High Conviction Ideas Going into 2021, CrossASEAN Insight Provider Nicolas Van Broekhoven provides an overview of his winners and losers for 2020 and lays out his picks for 2021. In Thai Food Titans: CPF and Thai Union, our Thai guru Athaporn Arayasantiparb, CFA reports back after meeting with two of Thailand's largest food companies, namely CP FOODS (CPF TB) (chicken, pork) and Thai Union Group (TU TB) (seafood). In Financial Beneficiaries of Pandemic: SAWAD and Chayo, Athaporn Arayasantiparb, CFA explores two companies in financial services stand to benefit from lending to people in need during the COVID-19 pandemic. Credit InsightsIn Morning Views Asia: Olam InternationalLeonard Law, CFA reports back on Olam International (OLAM SP) from a credit perspective post a business update for Q1 from the company, in line with its move away from quarterly results reporting. 

The Christmas Week that Was in ASEAN@Smartkarma - Thai Food Companies, Indonesia Dairy, and KEX TB

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Equity Bottom-Up

We met up with two of Thailand's largest food companies, namely CP Foods (chicken, pork) and Thai Union (seafood). CPF is one of our top picks, and we also own Thai Union. This is what we found:<ul>
<li>
CPF reported earnings of Bt19.6bn in 9M'20, up 36%, on the back of 12% revenue increase to Bt440bn, largely driven by a 91% surge in pork prices due to the ASF (African swine fever) outbreak in Vietnam.</li>
<li>On the corporate side, CP Foods acquired Canadian premium pork produce Hi Life, which caters to the Japanese and Chinese market, while simultaneously de-consolidating its China swine business. The company introduced food delivery, the Benja Chicken, robo-accounting and will introduce plant-based meat in 2021.</li>
<li>
Thai Union reported record earnings of Bt2.06bn (+50% YoY, 20% QoQ) on organic sales growth despite COVID-19, and Baht strength as well as cost (and hence loss reduction) at Red Lobster.</li>
<li>The worst appears behind them with impairment of Canadian assets and American anti-trust settlements already factored in. Looking forward, the company is getting into plant-based alternative seafood business, which seems reminiscent of Impossible Foods and <a href="https://www.smartkarma.com/entities/nr-instant-produce" target="_blank" data-smartkarma-citation="entities:28850:1" rel="noopener">NR Instant Produce (NRF TB)</a> .</li>
</ul>

We met up with two of Thailand's largest food companies, namely CP Foods (chicken, pork) and Thai Union (seafood). CPF is one of our top picks, and we also own Thai Union. This is what we found:

CPF reported earnings of Bt19.6bn in 9M'20, up 36%, on the back of 12% revenue increase to Bt440bn, largely driven by a 91% surge in pork prices due to the ASF (African swine fever) outbreak in Vietnam.
On the corporate side, CP Foods acquired Canadian premium pork produce Hi Life, which caters to the Japanese and Chinese market, while simultaneously de-consolidating its China swine business. The company introduced food delivery, the Benja Chicken, robo-accounting and will introduce plant-based meat in 2021.

Thai Union reported record earnings of Bt2.06bn (+50% YoY, 20% QoQ) on organic sales growth despite COVID-19, and Baht strength as well as cost (and hence loss reduction) at Red Lobster.
The worst appears behind them with impairment of Canadian assets and American anti-trust settlements already factored in. Looking forward, the company is getting into plant-based alternative seafood business, which seems reminiscent of Impossible Foods and NR Instant Produce (NRF TB) .


Equity Capital Markets

NR Instant Produce / Equity Capital Markets

MCorp Review recently took a swing at NRF (NR Instant Produce), a manufacturer of myriad food products ranging from seasoning to plant-based foods, which sounds a lot like America's now much hyped up Beyond Meat. While that really caught our attention, those checking out this IPO should look at the following as well:<ul>
<li>
The IPO details. The IPO will take place on the small cap MAI bourse and is good for 340m shares. It is firmly underwritten by their main banker SCB.</li>
<li>
Business and Outlook. 70% of NRF's sales are conducted in US$, so they are largely an exporter of products ranging from seasoning, condiments, ready-to-eat meals, fruit juices, snacks (sounds familiar), and beverages. Plant-based foods make up 8% of revenues today but will be the fastest-growing segment given the joint venture with Brecks. As their core business today is OEM (making foods for other brands), margin pressure is prevalent.</li>
<li>
Valuations. We estimate a valuation range of Bt0.54 (using DCF) and Bt0.63 (using relative valuation) for this IPO. As IPOs are rarely priced below Bt1/sh, we are unlikely to participate in this IPO.</li>
<li>
Key Risks includes: 1) customer retention in the OEM business; 2) raw materials price fluctuations; 3) food safety hazards; 4) customer concentration risks; 5) exchange rate risks; and 6) debt-related risks.</li>
</ul>

MCorp Review recently took a swing at NRF (NR Instant Produce), a manufacturer of myriad food products ranging from seasoning to plant-based foods, which sounds a lot like America's now much hyped up Beyond Meat. While that really caught our attention, those checking out this IPO should look at the following as well:

The IPO details. The IPO will take place on the small cap MAI bourse and is good for 340m shares. It is firmly underwritten by their main banker SCB.

Business and Outlook. 70% of NRF's sales are conducted in US$, so they are largely an exporter of products ranging from seasoning, condiments, ready-to-eat meals, fruit juices, snacks (sounds familiar), and beverages. Plant-based foods make up 8% of revenues today but will be the fastest-growing segment given the joint venture with Brecks. As their core business today is OEM (making foods for other brands), margin pressure is prevalent.

Valuations. We estimate a valuation range of Bt0.54 (using DCF) and Bt0.63 (using relative valuation) for this IPO. As IPOs are rarely priced below Bt1/sh, we are unlikely to participate in this IPO.

Key Risks includes: 1) customer retention in the OEM business; 2) raw materials price fluctuations; 3) food safety hazards; 4) customer concentration risks; 5) exchange rate risks; and 6) debt-related risks.


IPO Radar: NR Instant Produce, Beyond Meat Wannabe

Thailand

The company produces assorted foods including plant-based stuff, seasoning, ready-to-eat, condiments.

NR Instant Produce (NRF TB)

The Christmas Week that Was in ASEAN@Smartkarma - Thai Food Companies, Indonesia Dairy, and KEX TB

The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South...

Angus Mackintosh

Thai Food Titans: CPF and Thai Union

We met up with two of Thailand's largest food companies, namely CP Foods and Thai Union. These 'foodsters' delivered growth between 36-50% on the...

Athaporn Arayasantiparb, CFA

IPO Radar: NR Instant Produce, Beyond Meat Wannabe

MCorp Review recently took a swing at NRF (NR Instant Produce), a manufacturer of myriad food products ranging from seasoning to plant-based foods,...

Athaporn Arayasantiparb, CFA