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

Index Rebalance

Tower Bersama Infrastructure / Index Rebalance

<ul>
<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>
</ul>


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

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.

Equity Bottom-Up

Mitra Keluarga Karyasehat / Equity Bottom-Up

<ul><li>We see limited margins upside potential for MIKA in FY24 amid slowing revenue intensity, as evidenced in 9M23.</li><li>As a result, we trim our FY23-FY24 earnings estimates by -4%/-9% and arrive at a lower DCF-based TP of IDR2,900.</li><li>We maintain our Hold rating on the stock on slower growth outlook and premium valuation versus peers at current 26.0x EV/ EBITDA.</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>

We see limited margins upside potential for MIKA in FY24 amid slowing revenue intensity, as evidenced in 9M23.As a result, we trim our FY23-FY24 earnings estimates by -4%/-9% and arrive at a lower DCF-based TP of IDR2,900.We maintain our Hold rating on the stock on slower growth outlook and premium valuation versus peers at current 26.0x EV/ EBITDA.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.

Mitra Keluarga (MIKA IJ) - Limited Margins Upside as Intensity Continued to Slow

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

Siloam International Hospitals / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/siloam-international-hospitals" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospitals</a> booked strong set of 3Q2023 with continuing evidence of the recovery in its core base-case business together with the effectiveness of its cost and efficiency initiatives. </li>
<li>The company saw a strong recovery across outpatient visits and inpatient admissions, with evidence of greater treatment complexity along with higher intensity with less time spent in hospital. </li>
<li>
<a href="https://www.smartkarma.com/entities/siloam-international-hospitals" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospitals</a> continues to focus on digitising its processes to improve both patient experience and its internal processes. Valuations remain attractive versus listed peers.</li>
</ul>



Siloam International Hospitals booked strong set of 3Q2023 with continuing evidence of the recovery in its core base-case business together with the effectiveness of its cost and efficiency initiatives. 
The company saw a strong recovery across outpatient visits and inpatient admissions, with evidence of greater treatment complexity along with higher intensity with less time spent in hospital. 

Siloam International Hospitals continues to focus on digitising its processes to improve both patient experience and its internal processes. Valuations remain attractive versus listed peers.


Siloam International Hospitals (SILO IJ) - Sustainable Base Case Revival

<ul>
<li>
<a href="https://www.smartkarma.com/entities/medikaloka-hermina-tbk-pt" target="_blank" data-smartkarma-citation="entities:27000:1" rel="noopener">Medikaloka Hermina (HEAL IJ)</a> remains a differentiated hospital player in Indonesia given its focus on the treatment of women and children plus its doctor partnership model in its hospitals.</li>
<li>The company booked a strong rebound in both inpatient and outpatient volumes in 1H2023, and we expect this to continue into 2H, with two new hospitals opened in 3Q2023.</li>
<li>Despite exhibiting the strongest growth amongst its peers, the company still trades at a significant discount to <a href="https://www.smartkarma.com/entities/mitra-keluarga-karyasehat-tbk" target="_blank" data-smartkarma-citation="entities:288:1" rel="noopener">Mitra Keluarga Karyasehat Tbk (MIKA IJ)</a> on 10.2x FY2024E EV/EBITDA. </li>
</ul>



Medikaloka Hermina (HEAL IJ) remains a differentiated hospital player in Indonesia given its focus on the treatment of women and children plus its doctor partnership model in its hospitals.
The company booked a strong rebound in both inpatient and outpatient volumes in 1H2023, and we expect this to continue into 2H, with two new hospitals opened in 3Q2023.
Despite exhibiting the strongest growth amongst its peers, the company still trades at a significant discount to Mitra Keluarga Karyasehat Tbk (MIKA IJ) on 10.2x FY2024E EV/EBITDA. 


Medikaloka Hermina (HEAL IJ) - Starting Patients Young

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mitra-keluarga-karyasehat-tbk" target="_blank" data-smartkarma-citation="entities:288:1" rel="noopener">Mitra Keluarga (MIKA IJ)</a> is in the midst of a recovery not yet reflected in headline numbers as the effects of inflated COVID revenues fade and core business takes off.</li>
<li>The company is a key beneficiary of the new health bill allowing foreign doctors to practice in Indonesia given its best-in-class hospitals located in affluent catchment areas.  </li>
<li>
<a href="https://www.smartkarma.com/entities/mitra-keluarga-karyasehat-tbk" target="_blank" data-smartkarma-citation="entities:288:1" rel="noopener">Mitra Keluarga Karyasehat</a> continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive given the highest returns amongst its peers, with recovery in motion.</li>
</ul>



Mitra Keluarga (MIKA IJ) is in the midst of a recovery not yet reflected in headline numbers as the effects of inflated COVID revenues fade and core business takes off.
The company is a key beneficiary of the new health bill allowing foreign doctors to practice in Indonesia given its best-in-class hospitals located in affluent catchment areas.  

Mitra Keluarga Karyasehat continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive given the highest returns amongst its peers, with recovery in motion.


Mitra Keluarga Karyasehat (MIKA IJ) - Well Adjusted For a Rapid Recovery

Indonesia

PT Mitra Keluarga Karyasehat Tbk is a prominent Indonesian private hospital operator that owns and manages hospitals, offering both outpatient and inpatient healthcare services. The company's network includes Mitra Keluarga Hospitals and Kasih Group Hospitals, providing specialized medical care such as oncology, radiotherapy, brain and spine care, women and children's health, and orthopedic services. It also offers healthcare platform services. The company was founded in 1989 and is headquartered in Jakarta, Indonesia.

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Mitra Keluarga Karyasehat (MIKA IJ)

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

There could be 5 potential changes for the LQ45 Index in January. The potential adds have performed well while the potential deletes are trading...

Brian Freitas

Mitra Keluarga (MIKA IJ) - Limited Margins Upside as Intensity Continued to Slow

We maintain our Hold rating on the stock on slower growth outlook and premium valuation versus peers at current 26.0x EV/ EBITDA.

BRI Danareksa Research

Siloam International Hospitals (SILO IJ) - Sustainable Base Case Revival

Siloam International Hospitals booked a strong set of 3Q2023 with continuing evidence of the recovery in its core base-case business together with...

Angus Mackintosh

Medikaloka Hermina (HEAL IJ) - Starting Patients Young

Despite exhibiting the strongest growth amongst its peers, the company still trades at a significant discount to Mitra Keluarga Karyasehat (MIKA...

Angus Mackintosh

Mitra Keluarga Karyasehat (MIKA IJ) - Well Adjusted For a Rapid Recovery

Mitra Keluarga continues to expand its hospital network, increase treatment intensity, and digitalise its operations. Valuations are attractive...

Angus Mackintosh

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