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>Tile manufacturer <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a>'s 4Q2021 results confirmed a strong finish to the year and management expects an equally vibrant performance in 2022, as a top quality Indonesian industrial</li>
<li>Increased capacity, better product mix, greater efficiencies on gas usage, and the new line of porcelain tiles will help to drive better margins this year. </li>
<li>
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia</a> throws off high returns with ROEs of more than 30%. Valuations do not look challenging with a strong EPS 30% growth and a forward PER of 11x.</li>
</ul>


Tile manufacturer Arwana Citramulia (ARNA IJ)'s 4Q2021 results confirmed a strong finish to the year and management expects an equally vibrant performance in 2022, as a top quality Indonesian industrial
Increased capacity, better product mix, greater efficiencies on gas usage, and the new line of porcelain tiles will help to drive better margins this year. 

Arwana Citramulia throws off high returns with ROEs of more than 30%. Valuations do not look challenging with a strong EPS 30% growth and a forward PER of 11x.


Arwana Citramulia (ARNA IJ) - Tiling a Porcelain Path

<ul>
<li>Indonesia's best quality ceramic tile producer, <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a>, continues to register strong growth and higher margins due to improving product mix and improvements in manufacturing efficiency.</li>
<li>
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> is introducing new higher-end porcelain tiles which will displace Chinese imports given lower pricing, better terms for wholesalers and significantly faster delivery times.  </li>
<li>The company remains a top choice amongst Indonesian industrials with high-quality governance and a strong growth track record along with attractive valuations. </li>
</ul>


Indonesia's best quality ceramic tile producer, Arwana Citramulia (ARNA IJ), continues to register strong growth and higher margins due to improving product mix and improvements in manufacturing efficiency.

Arwana Citramulia (ARNA IJ) is introducing new higher-end porcelain tiles which will displace Chinese imports given lower pricing, better terms for wholesalers and significantly faster delivery times.  
The company remains a top choice amongst Indonesian industrials with high-quality governance and a strong growth track record along with attractive valuations. 


Arwana Citramulia (ARNA IJ) - Tiling the Nation in 2022

Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

Pan-Asia Equity Bottom-up

Cisarua Mountain Dairy / Equity Bottom-Up

<ul><li>A deeper look into Cisarua Mountain Dairy – Cimory (CMRY IJ) since we initially highlighted the deal in Issue 8 revealed that is business is not nearly attractive as it appeared</li><li>Cosco’s spin-off of liquor distribution subsidiary Keepers (KEEPR PM) has received strong investor demand following a move to reprice the offering 25% below the low end of the original range</li><li>Robinsons Land (RLC PM) announced a P3bn buyback that’s equivalent to around 3% of their market cap</li></ul>

A deeper look into Cisarua Mountain Dairy – Cimory (CMRY IJ) since we initially highlighted the deal in Issue 8 revealed that is business is not nearly attractive as it appearedCosco’s spin-off of liquor distribution subsidiary Keepers (KEEPR PM) has received strong investor demand following a move to reprice the offering 25% below the low end of the original rangeRobinsons Land (RLC PM) announced a P3bn buyback that’s equivalent to around 3% of their market cap

Wickhams Hill Research | Under-The-Radar Issue 12

Indonesia's leading low-cost tile producer <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> released a strong set of results for 1H2021, with revenues increasing by +25.2% YoY driven by decent organic growth, new capacity plus continuing improvements in product mix.
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> continues to increase its production capacity whilst operating at very high rates of capacity utilisation above 100%. 
The company has started production of its new higher-end ARNA brand 60cmx60cm tiles, which compete for head-on with Chinese imports but where Arwana has cost advantages, faster turnaround times, and can provide better terms for customers.
<section class="figure">Apart from the increase in new capacity for the higher-end porcelain tiles, <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> also continues to shift its product mix towards its higher-end ceramic tiles under the UNO brand name, whilst reducing the production of cheaper products, helping to support margins.</section>
<section class="figure"></section>
<section class="figure">
The company saw its gross profit increase by +60% YoY and gross profit margin to 35.4% versus 27.5% the previous year, mainly helped by lower gas prices, which were reduced by -30% last April
</section>
We continue to view <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> as one of the best quality industrial companies in Indonesia, which will continue to see the positive tailwind of better product mix and lower gas prices in 2H2021, suggesting more to come on margin improvements in the second half.

Indonesia's leading low-cost tile producer Arwana Citramulia (ARNA IJ) released a strong set of results for 1H2021, with revenues increasing by +25.2% YoY driven by decent organic growth, new capacity plus continuing improvements in product mix.
Arwana Citramulia (ARNA IJ) continues to increase its production capacity whilst operating at very high rates of capacity utilisation above 100%. 
The company has started production of its new higher-end ARNA brand 60cmx60cm tiles, which compete for head-on with Chinese imports but where Arwana has cost advantages, faster turnaround times, and can provide better terms for customers.
Apart from the increase in new capacity for the higher-end porcelain tiles, Arwana Citramulia (ARNA IJ) also continues to shift its product mix towards its higher-end ceramic tiles under the UNO brand name, whilst reducing the production of cheaper products, helping to support margins.


The company saw its gross profit increase by +60% YoY and gross profit margin to 35.4% versus 27.5% the previous year, mainly helped by lower gas prices, which were reduced by -30% last April

We continue to view Arwana Citramulia (ARNA IJ) as one of the best quality industrial companies in Indonesia, which will continue to see the positive tailwind of better product mix and lower gas prices in 2H2021, suggesting more to come on margin improvements in the second half.

Arwana Citramulia (ARNA IJ) - Glazed Porcelain

Indonesia's largest ceramic tile manufacturer <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" rel="noopener">Arwana Citramulia (ARNA IJ)</a> recently announced its 2020 results with net profit increasing by +49.9% YoY from an increase in revenue of +2.8% YoY to IDR 2.21tn, as the company benefited from a lower gas price and greater production efficiencies.
The reduction in gas prices from US$9 to US$6/ MMbtu has reduced the production costs for <a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" rel="noopener">Arwana Citramulia (ARNA IJ)</a> significantly with a -6% fall in costs on an MMBtu / sqm basis.
The company finished the year with a capacity utilization of 103% despite the impact of COVID-19 in 2Q2020, as it expanded its distribution by around 2,000 outlets last year.
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> is targeting a ceramics tile volume growth of  +10% YoY and revenue growth of +15% YoY in 2021 and also projects the net profit to grow to around 30% YoY. 
The company will see a full-year impact of the lower gas price as well as potential further efficiency gains, through an even lower rejection rate. 
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> will expand capacity in 2021 into the production of higher-end ceramic porcelain tiles, which will potentially provide the company with its next leg of growth. 
<a href="https://www.smartkarma.com/entities/arwana-citramulia-tbk-pt" target="_blank" data-smartkarma-citation="entities:17042:1" rel="noopener">Arwana Citramulia (ARNA IJ)</a> trades on 13.5x FY21E PER and 11.3x FY22E PER, with forecast EPS growth of +20.5% and +16.7% for FY221E and FY22E respectively. We continue to see the company as one of the best quality industrials in Indonesia and these results clearly demonstrate the company's ability to weather an unprecedented environment.

Indonesia's largest ceramic tile manufacturer Arwana Citramulia (ARNA IJ) recently announced its 2020 results with net profit increasing by +49.9% YoY from an increase in revenue of +2.8% YoY to IDR 2.21tn, as the company benefited from a lower gas price and greater production efficiencies.
The reduction in gas prices from US$9 to US$6/ MMbtu has reduced the production costs for Arwana Citramulia (ARNA IJ) significantly with a -6% fall in costs on an MMBtu / sqm basis.
The company finished the year with a capacity utilization of 103% despite the impact of COVID-19 in 2Q2020, as it expanded its distribution by around 2,000 outlets last year.
Arwana Citramulia (ARNA IJ) is targeting a ceramics tile volume growth of  +10% YoY and revenue growth of +15% YoY in 2021 and also projects the net profit to grow to around 30% YoY. 
The company will see a full-year impact of the lower gas price as well as potential further efficiency gains, through an even lower rejection rate. 
Arwana Citramulia (ARNA IJ) will expand capacity in 2021 into the production of higher-end ceramic porcelain tiles, which will potentially provide the company with its next leg of growth. 
Arwana Citramulia (ARNA IJ) trades on 13.5x FY21E PER and 11.3x FY22E PER, with forecast EPS growth of +20.5% and +16.7% for FY221E and FY22E respectively. We continue to see the company as one of the best quality industrials in Indonesia and these results clearly demonstrate the company's ability to weather an unprecedented environment. 

Arwana Citramulia (ARNA IJ) - Fired Up Top Quality Industrial

Indonesia

PT Arwana Citramulia Tbk manufactures and distributes ceramic and porcelain tiles in Indonesia and internationally. The company offers a diverse product portfolio under brands such as Arna, Arwana Ceramics, and UNO. It was founded in 1993 and is headquartered in Jakarta, Indonesia.

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Arwana Citramulia (ARNA IJ)