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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> paints an optimistic finish to 2021, with indications of +20-30% QoQ growth for both chemical and fuel distribution in 4Q2021.</li>
<li>The outlook for FY2022 looks equally promising for the distribution business, with a ramp-up of retail fuel distribution plus a strong pipeline of demand for its JIIPE industrial estate.</li>
<li>AKR Corporindo (AKRA IJ) remains an interesting industrial proxy for the recovery of the overall Indonesian economy trading at a significant discount to its historical average.</li>
</ul>



AKR Corporindo (AKRA IJ) paints an optimistic finish to 2021, with indications of +20-30% QoQ growth for both chemical and fuel distribution in 4Q2021.
The outlook for FY2022 looks equally promising for the distribution business, with a ramp-up of retail fuel distribution plus a strong pipeline of demand for its JIIPE industrial estate.
AKR Corporindo (AKRA IJ) remains an interesting industrial proxy for the recovery of the overall Indonesian economy trading at a significant discount to its historical average.


AKR Corporindo (AKRA IJ) - Chemically and Industrially Enhanced

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>At the January review, there are 2 changes to the IDX30 Index, 5 changes to the LQ45 Index, and 9 changes to the IDX30 Index.</li>
<li>Largest buying impact will be on <a href="https://www.smartkarma.com/entities/sumber-alfaria-trijaya-tbk-pt" target="_blank" data-smartkarma-citation="entities:15659:1" rel="noopener">Sumber Alfaria Trijaya Tbk Pt</a>, <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a>, <a href="https://www.smartkarma.com/entities/waskita-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:15739:1" rel="noopener">Waskita Karya (Persero) (WSKT IJ)</a>, <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> and <a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a>. </li>
<li>Largest selling impact will be on <a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a>, <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (JSMR IJ)</a>, <a href="https://www.smartkarma.com/entities/pakuwon-jati-tbk-pt" target="_blank" data-smartkarma-citation="entities:8550:1" rel="noopener">Pakuwon Jati (PWON IJ)</a> , <a href="https://www.smartkarma.com/entities/bumi-serpong-damai-pt" target="_blank" data-smartkarma-citation="entities:15498:1" rel="noopener">Bumi Serpong Damai (BSDE IJ)</a> and <a href="https://www.smartkarma.com/entities/hm-sampoerna-tbk-pt" target="_blank" data-smartkarma-citation="entities:617:1" rel="noopener">HM Sampoerna (HMSP IJ)</a>.</li>
</ul>


At the January review, there are 2 changes to the IDX30 Index, 5 changes to the LQ45 Index, and 9 changes to the IDX30 Index.
Largest buying impact will be on Sumber Alfaria Trijaya Tbk Pt, Emtek (EMTK IJ), Waskita Karya (Persero) (WSKT IJ), BFI Finance Indonesia (BFIN IJ) and XL Axiata (EXCL IJ). 
Largest selling impact will be on Ace Hardware Indonesia (ACES IJ), Jasa Marga (JSMR IJ), Pakuwon Jati (PWON IJ) , Bumi Serpong Damai (BSDE IJ) and HM Sampoerna (HMSP IJ).


IDX30/LQ45 Index Rebalance: BIG Impact Changes in Limited Time

<ul>
<li>The review period for the LQ45 Index ended on 31 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.</li>
<li>We see <a href="https://www.smartkarma.com/entities/waskita-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:15739:1" rel="noopener">Waskita Karya (Persero) (WSKT IJ)</a>, <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> and <a href="https://www.smartkarma.com/entities/harum-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:1604:1" rel="noopener">Harum Energy (HRUM IJ)</a> as higher probability inclusions in the LQ45 Index.</li>
<li>Given the focus is on liquidity, we see <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (Persero) (JSMR IJ)</a>, <a href="https://www.smartkarma.com/entities/bumi-serpong-damai-pt" target="_blank" data-smartkarma-citation="entities:15498:1" rel="noopener">Bumi Serpong Damai (BSDE IJ)</a> and <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> as higher probability deletion candidates.</li>
</ul>


The review period for the LQ45 Index ended on 31 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.
We see Waskita Karya (Persero) (WSKT IJ), BFI Finance Indonesia (BFIN IJ) and Harum Energy (HRUM IJ) as higher probability inclusions in the LQ45 Index.
Given the focus is on liquidity, we see Jasa Marga (Persero) (JSMR IJ), Bumi Serpong Damai (BSDE IJ) and AKR Corporindo (AKRA IJ) as higher probability deletion candidates.


LQ45 Index Rebalance Preview (Feb 2022): Potential Changes Later This Month

Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

Pan-Asia Equity Bottom-up

<ul>
<li>ComfortDelGro (CD SP) announced further details surrounding the IPO of their Australian subsidiary, leading us to change our view on the potential value to be unlocked by the transaction</li>
<li>Dayamitra Telekomunikasi (Mitratel) is being spun out of Telkomsel (TLKM IJ) and targeting to raise US$ 1.76bn, with an implied market cap at listing of around US$5.2bn</li>
<li>Coincidentally, RHB has published an excellent report on Bali Towerindo (BALI IJ) which we think is the best positioned independent operator in the space due to their unique monetisation strategy and asset footprint.</li>
</ul>


ComfortDelGro (CD SP) announced further details surrounding the IPO of their Australian subsidiary, leading us to change our view on the potential value to be unlocked by the transaction
Dayamitra Telekomunikasi (Mitratel) is being spun out of Telkomsel (TLKM IJ) and targeting to raise US$ 1.76bn, with an implied market cap at listing of around US$5.2bn
Coincidentally, RHB has published an excellent report on Bali Towerindo (BALI IJ) which we think is the best positioned independent operator in the space due to their unique monetisation strategy and asset footprint.


Wickhams Hill Research | Under-The-Radar Issue 11

<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> reported a 9M2021 Net Profit of IDR797bn, up +20% YoY, driven by revenue growth of +24% YoY to IDR17,250bn, and tight control over operating expenses.  Volumes and prices were positive drivers.</p>
<p>The company delivered strong revenue growth in the Trading &amp; Distribution business segment supported by volume growth, and higher chemical prices.</p>
<section class="figure">
<p>Petroleum product volumes saw especially strong volumes reaching one of the highest monthly volume numbers in September on record, mainly driven by demand from mining. </p>
<p>The company's JV with <a href="https://www.smartkarma.com/entities/bp-plc" target="_blank" data-smartkarma-citation="entities:21847:1" rel="noopener">BP PLC (BP/ LN)</a> on filling stations is back to a normalized level. The JV now has 19 gas stations with plans to open another 10 by the end of the year and even more in 2022.</p>
</section>
<section class="figure"></section>
<p><span data-preserver-spaces="true">The Java Integrated Industrial and Port Estate (JIIPE) was one of the key pillars for <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a>'s performance for 3Q2021, with r</span><span data-preserver-spaces="true">evenue from industrial land during the 3Q2021 recording  a significant increase of +51.7% YoY.</span></p>
<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> continues to focus on improving operational efficiencies with total G&amp;A expenses down  and selling expenses only seeing growth of +1.8% YoY.</p>
<section class="figure">
<div>
<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> also expects a positive impact of a rising commodity price cycle, with higher demand for energy and chemicals from its customers.  </p>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> is trading on 16.9x FY21E PER and 15.0x FY22E PER versus its 5-year average forward PER of 17.2x, which makes it look attractive from a valuation perspective. The company is an interesting proxy to the recovery in the Indonesian economy through its petroleum and chemical distribution, with the additional kicker of its increasingly productive JIIPE industrial estate in Gresik. Analyst expectations continue to look too low for FY21E, making upgrades to earnings another potential catalyst, especially after the positive JIIPE newsflow.</p>
</div>
</div>
</section>

AKR Corporindo (AKRA IJ) reported a 9M2021 Net Profit of IDR797bn, up +20% YoY, driven by revenue growth of +24% YoY to IDR17,250bn, and tight control over operating expenses.  Volumes and prices were positive drivers.
The company delivered strong revenue growth in the Trading &amp; Distribution business segment supported by volume growth, and higher chemical prices.

Petroleum product volumes saw especially strong volumes reaching one of the highest monthly volume numbers in September on record, mainly driven by demand from mining. 
The company's JV with BP PLC (BP/ LN) on filling stations is back to a normalized level. The JV now has 19 gas stations with plans to open another 10 by the end of the year and even more in 2022.


The Java Integrated Industrial and Port Estate (JIIPE) was one of the key pillars for AKR Corporindo (AKRA IJ)'s performance for 3Q2021, with revenue from industrial land during the 3Q2021 recording  a significant increase of +51.7% YoY.
AKR Corporindo (AKRA IJ) continues to focus on improving operational efficiencies with total G&amp;A expenses down  and selling expenses only seeing growth of +1.8% YoY.


AKR Corporindo (AKRA IJ) also expects a positive impact of a rising commodity price cycle, with higher demand for energy and chemicals from its customers.  

AKR Corporindo (AKRA IJ) is trading on 16.9x FY21E PER and 15.0x FY22E PER versus its 5-year average forward PER of 17.2x, which makes it look attractive from a valuation perspective. The company is an interesting proxy to the recovery in the Indonesian economy through its petroleum and chemical distribution, with the additional kicker of its increasingly productive JIIPE industrial estate in Gresik. Analyst expectations continue to look too low for FY21E, making upgrades to earnings another potential catalyst, especially after the positive JIIPE newsflow.




AKR Corporindo (AKRA IJ) - Chemical and Smelter Driven Growth

Indonesia

AKR Corporindo is a leading provider of integrated supply chain solutions in Indonesia. The company primarily distributes and trades petroleum and basic chemicals to industrial customers, also offering logistics services like warehousing and transportation. Additionally, it manufactures sorbitol and adhesive materials, and develops integrated industrial and port estates. Headquartered in Jakarta, Indonesia, the company was established in 1977.

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AKR Corporindo (AKRA IJ)