Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety. </li>
<li>Our top picks are <a href="https://www.smartkarma.com/entities/perfect-medical-health-management" target="_blank" data-smartkarma-citation="entities:3639:1" rel="noopener">Perfect Medical Health (1830 HK)</a>, <a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a>, <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet (8371 HK)</a>, <a href="https://www.smartkarma.com/entities/uchi-technologies-bhd" target="_blank" data-smartkarma-citation="entities:10723:1" rel="noopener">Uchi Technologies (UCHI MK)</a>, and <a href="https://www.smartkarma.com/entities/the-keepers-holdings-inc" target="_blank" data-smartkarma-citation="entities:23003:1" rel="noopener">The Keepers Holdings (KEEPR PM)</a>.</li>
<li>We expand our list coverage into <a href="https://www.smartkarma.com/entities/multi-bintang-indonesia-pt" target="_blank" data-smartkarma-citation="entities:11651:1" rel="noopener">Multi Bintang Indonesia (MLBI IJ)</a>, <a href="https://www.smartkarma.com/entities/delta-djakarta-tbk-pt" target="_blank" data-smartkarma-citation="entities:5585:1" rel="noopener">Delta Djakarta (DLTA IJ)</a>, and <a href="https://www.smartkarma.com/entities/sheng-siong-group-ltd" target="_blank" data-smartkarma-citation="entities:6824:1" rel="noopener">Sheng Siong (SSG SP)</a> as quality high ROCE names worth looking at.</li>
</ul>


We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety. 
Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
We expand our list coverage into Multi Bintang Indonesia (MLBI IJ), Delta Djakarta (DLTA IJ), and Sheng Siong (SSG SP) as quality high ROCE names worth looking at.


Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety - August 2023

<ul>
<li>
<a href="https://www.smartkarma.com/entities/delta-djakarta-tbk-pt" target="_blank" data-smartkarma-citation="entities:5585:1" rel="noopener">Delta Djakarta (DLTA IJ)</a> is a cheaper small-cap option to play the recovery of tourism in Indonesia instead of <a href="https://www.smartkarma.com/entities/multi-bintang-indonesia-pt" target="_blank" data-smartkarma-citation="entities:11651:1" rel="noopener">Multi Bintang Indonesia (MLBI IJ)</a> </li>
<li>It's 5Yr/10Yr average ROCE is 22%/29% lower than MLBI IJ due to the high net cash on the balance sheet, ~25% of the market capitalization.</li>
<li>Trading at 11x PE and 10% dividend yield on normalized earnings (Assuming a 110% payout ratio since the 5 Yr average is 120%), the stock is super cheap.</li>
</ul>



Delta Djakarta (DLTA IJ) is a cheaper small-cap option to play the recovery of tourism in Indonesia instead of Multi Bintang Indonesia (MLBI IJ) 
It's 5Yr/10Yr average ROCE is 22%/29% lower than MLBI IJ due to the high net cash on the balance sheet, ~25% of the market capitalization.
Trading at 11x PE and 10% dividend yield on normalized earnings (Assuming a 110% payout ratio since the 5 Yr average is 120%), the stock is super cheap.


Delta Djakarta (DLTA IJ): Cheaper Higher Yield Option to Multi Bintang

Multi Bintang Indonesia / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/multi-bintang-indonesia-pt" target="_blank" data-smartkarma-citation="entities:11651:1" rel="noopener">Multi Bintang Indonesia (MLBI IJ)</a> is Indonesia's leading beer company, with a marketshare of 50% by volume. The company is 89% owned by Heineken. </li>
<li>The company has maintained an average 5 Yr/10 Yr ROCE of over 72%/82% and paid out 80-100% of its profits as dividends.  It is also net cash.</li>
<li>The stock boasts a 6.5%-7% dividend yield and trades at 14-15x PE if profits normalize due to increased tourism in Indonesia, where we believe most of the demand is. </li>
</ul>



Multi Bintang Indonesia (MLBI IJ) is Indonesia's leading beer company, with a marketshare of 50% by volume. The company is 89% owned by Heineken. 
The company has maintained an average 5 Yr/10 Yr ROCE of over 72%/82% and paid out 80-100% of its profits as dividends.  It is also net cash.
The stock boasts a 6.5%-7% dividend yield and trades at 14-15x PE if profits normalize due to increased tourism in Indonesia, where we believe most of the demand is. 


Multi Bintang (MLBI IJ): Recovery Story With High Cash Flow Generation and Dividend Pay Out

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

The moment of reckoning for <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> is here; Phuket Sandbox has given a trial for the tourism reopening, a high and progressing inoculation rate of the tourists' origin countries such as China and Malaysia allow, and the upcoming lifting of quarantine for vaccinated tourists starting November 1st will increase the number of tourists visiting Thailand.
Phuket is the only place in Thailand where alcoholic beverages are allowed to be sold and consumed on-premises but sooner rather than later, the policy will be applied to the whole nation benefiting Thai Beverage. The time to buy <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP) </a>is now.

The moment of reckoning for Thai Beverage (THBEV SP) is here; Phuket Sandbox has given a trial for the tourism reopening, a high and progressing inoculation rate of the tourists' origin countries such as China and Malaysia allow, and the upcoming lifting of quarantine for vaccinated tourists starting November 1st will increase the number of tourists visiting Thailand.
Phuket is the only place in Thailand where alcoholic beverages are allowed to be sold and consumed on-premises but sooner rather than later, the policy will be applied to the whole nation benefiting Thai Beverage. The time to buy Thai Beverage (THBEV SP) is now. 

Stable result in Q2 2021 despite the increasing COVID-19 cases in Thailand from nightclubs and concerts prompting the Thai government to extend the ban for nightlife entertainment. The interesting part is that contrary to <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)'s </a>observation that the Thais are quite happy to drink and socialize at home versus Vietnamese, who tend to consume outside the home, Sabeco (Saigon Bev Company)'s sales volume actually went up during this period and lifted <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> results, further reiterating that the Thai may be happy to drink at home but the difficult period has dampened their home drinking appetite. Thai Beverage is still trading at a lower valuation to its peak, the current valuation at 17x PER is still higher than 14x forward PER.  The recent Q2 2021 result brought some optimism especially when the management displayed cost savings ability but the spirits and beer outlook remain soft as long as the pandemic is still there.

Stable result in Q2 2021 despite the increasing COVID-19 cases in Thailand from nightclubs and concerts prompting the Thai government to extend the ban for nightlife entertainment. The interesting part is that contrary to Berli Jucker (BJC TB)'s observation that the Thais are quite happy to drink and socialize at home versus Vietnamese, who tend to consume outside the home, Sabeco (Saigon Bev Company)'s sales volume actually went up during this period and lifted Thai Beverage (THBEV SP) results, further reiterating that the Thai may be happy to drink at home but the difficult period has dampened their home drinking appetite. Thai Beverage is still trading at a lower valuation to its peak, the current valuation at 17x PER is still higher than 14x forward PER.  The recent Q2 2021 result brought some optimism especially when the management displayed cost savings ability but the spirits and beer outlook remain soft as long as the pandemic is still there. 

Thai Beverage (THBEV): Weak Quarter Ahead

Indonesia

PT Delta Djakarta Tbk is an Indonesian company specializing in the beverage industry. It manufactures and distributes a variety of beers, lagers, and stouts under brands like Anker Beer, Carlsberg, and San Miguel, and also offers non-alcoholic beverages such as Sodaku and Soda Ice. The company exports its products to domestic and international markets. PT Delta Djakarta Tbk was founded in 1932 and is headquartered in Bekasi, Indonesia.

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Delta Djakarta (DLTA IJ)

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety - August 2023

We cover our top picks in our high ROCE coverage list. Perfect Medical, Taste Gourmet, Water Oasis, Keepers Holdings, Uchi Technologies, Multi...

Sameer Taneja