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

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<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> just released its results for 9M2021, with its net revenues increasing by +22.5% YoY, reflecting a solid recovery from 9M2020 numbers, despite recent spikes in COVID-19 cases.</p>
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<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a>'s digital media businesses including Vidio, KLY, and Whisper, together with its out of home business under EYE, generated combined revenue increase of +65.7% YoY, with slower grow at EYE, as people practiced work social distancing and work from home.</p>
<p>S<a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> and <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> have recently seen Affinity Partners invest US$150m in to their jointly-owned and leading Indonesian OTT video-streaming platform Vidio.com, valuing the company at a pre-money valuation of US$750m.</p>
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<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> has also recently become a minority shareholder in RANS Entertainment, a start-up company run by celebrity husband and wife couple Raffi Ahmad and Nagita Slavina. </p>
<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> continues to generate ROEs in excess of 20% and will likely start to pay dividends again in 2022, as the recovery taKes hold, making it an attractive prospect.</p>
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PT Surya Citra Media Tbk (SCMA IJ) just released its results for 9M2021, with its net revenues increasing by +22.5% YoY, reflecting a solid recovery from 9M2020 numbers, despite recent spikes in COVID-19 cases.

PT Surya Citra Media Tbk (SCMA IJ)'s digital media businesses including Vidio, KLY, and Whisper, together with its out of home business under EYE, generated combined revenue increase of +65.7% YoY, with slower grow at EYE, as people practiced work social distancing and work from home.
SPT Surya Citra Media Tbk (SCMA IJ) and Emtek (EMTK IJ) have recently seen Affinity Partners invest US$150m in to their jointly-owned and leading Indonesian OTT video-streaming platform Vidio.com, valuing the company at a pre-money valuation of US$750m.




PT Surya Citra Media Tbk (SCMA IJ) has also recently become a minority shareholder in RANS Entertainment, a start-up company run by celebrity husband and wife couple Raffi Ahmad and Nagita Slavina. 
PT Surya Citra Media Tbk (SCMA IJ) continues to generate ROEs in excess of 20% and will likely start to pay dividends again in 2022, as the recovery taKes hold, making it an attractive prospect.















PT Surya Citra Media Tbk (SCMA IJ) - Looking Forward to a Digital Fuelled Future

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

Astro Malaysia Holdings / Equity Bottom-Up

<p>Astro's high-frequency operational data still looks very positive with a high TV viewership share (72%), 3.2 hours average time spent/day that is ahead of 2.16 hours of the FTA, increased MAU by 17% YoY, on-demand shows streamed has tripled to MYR 233 million. </p>
<p>The big announcement is that Astro subscribers can soon access <a href="https://www.smartkarma.com/entities/netflix-inc" target="_blank" data-smartkarma-citation="entities:20451:1" rel="noopener">Netflix Inc (NFLX US)</a> through its Ultra and Ulti boxes which means investors should not worry that Astro subscribers will be reduced because they want to move to Netflix. Although it is more of a defensive strategy, there is a potential for a small upside as some existing Netflix subscribers in Malaysia may want to subscribe to Astro as they get bangs for their bucks. </p>
<p>Post 50% share price increase, the company is still trading below its pre-COVID-19 level although the business climate has been stable and Netflix is not exactly a competitor to be feared anymore as it has become Astro's allies in Malaysia. The company also generates just shy of 20% FCF yield. There is no reason not to like <a href="https://www.smartkarma.com/entities/astro-malaysia-holdings-bhd" target="_blank" data-smartkarma-citation="entities:1143:1" rel="noopener">Astro Malaysia Holdings (ASTRO MK)</a>. </p>

Astro's high-frequency operational data still looks very positive with a high TV viewership share (72%), 3.2 hours average time spent/day that is ahead of 2.16 hours of the FTA, increased MAU by 17% YoY, on-demand shows streamed has tripled to MYR 233 million. 
The big announcement is that Astro subscribers can soon access Netflix Inc (NFLX US) through its Ultra and Ulti boxes which means investors should not worry that Astro subscribers will be reduced because they want to move to Netflix. Although it is more of a defensive strategy, there is a potential for a small upside as some existing Netflix subscribers in Malaysia may want to subscribe to Astro as they get bangs for their bucks. 
Post 50% share price increase, the company is still trading below its pre-COVID-19 level although the business climate has been stable and Netflix is not exactly a competitor to be feared anymore as it has become Astro's allies in Malaysia. The company also generates just shy of 20% FCF yield. There is no reason not to like Astro Malaysia Holdings (ASTRO MK). 

Astro (ASTRO): Netflix Is Included Soon and High FCF Yield.

Private Capital Markets

<p>With operations across eight countries and more than 400 cities, <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> is one of the region’s most valuable start-ups and was the leader in 2020 by GMV in online food delivery and ride-hailing, and by TPV (total processing value) in the e-wallet segment of financial services.</p>
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<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> hosted its inaugural Q12021 results call recently, which saw the senior management presenting the first quarter company performance for the first time. The company provided a detailed and presentation on the progress this year, and was reassuringly open. </p>
<p>The company also filed its F-4 Prospectus in connection with its proposed merger with the Altimeter Growth SPAC, which provides more detail on the company's underlying business prospects, as well as risks. <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> is making good progress toward listing, which is expected in 4Q2021, even as early as the end of October. </p>
<p>The company exceeded internal expectations for 1Q2021 both for adjusted net sales and adjusted EBITDA. <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> saw its 1Q2021 adjusted net sales rise +39%YoY to a record US$507m, with reduced losses on the back of a strong performance in its deliveries business.</p>
<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> also reported that its spend per user or GMV per monthly transacting user (MTU), increased by +31% YoY, which suggests some synergies between the different verticals across the company's "Super App".</p>
<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> has seen its mobility business suffer from the recent COVID-19 pandemic and the resultant mobility restrictions, which are affecting a number of the company's markets but EBITDA margins remain firm.</p>
<p>The company saw its financial services division experience its highest ever quarterly total payments volume in 1Q2021, with +18% YoY growth.</p>
<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> 's newest division under enterprise and new initiatives saw its GMV increase 3.5x, with a large portion of this division's revenues coming from advertising. </p>
<p>One area where <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> can be sure to win supporters are on its ESG credentials given that it's natural fit in its support for the livelihoods of both its driver-partners and its widespread community of small merchants.</p>
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<p>We took a deep dive with <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> management to better understand its regional prospects and long-term strategy and came away more positive as a result. </p>
<p>We see the company's increasing collaboration with <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> as a positive development, which will help fill in some of the gaps to its business in Indonesia.</p>
<p>There are still risks to the company's growth projections and we look to identify where those competitive risks lie. </p>
<p>Having seen <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> go through the mill with the SEC and after detailed and open discussions with the company plus the company's comprehensive 1Q2021 results release, we have turned more positive on the company's prospects. This leads us to be more comfortable with the valuations, as long as the company can achieve its targets. The company's collaboration with <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> in Indonesia may also yield further positive developments there. </p>
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With operations across eight countries and more than 400 cities, Grab is one of the region’s most valuable start-ups and was the leader in 2020 by GMV in online food delivery and ride-hailing, and by TPV (total processing value) in the e-wallet segment of financial services.



Grab hosted its inaugural Q12021 results call recently, which saw the senior management presenting the first quarter company performance for the first time. The company provided a detailed and presentation on the progress this year, and was reassuringly open. 
The company also filed its F-4 Prospectus in connection with its proposed merger with the Altimeter Growth SPAC, which provides more detail on the company's underlying business prospects, as well as risks. Grab is making good progress toward listing, which is expected in 4Q2021, even as early as the end of October. 
The company exceeded internal expectations for 1Q2021 both for adjusted net sales and adjusted EBITDA. Grab saw its 1Q2021 adjusted net sales rise +39%YoY to a record US$507m, with reduced losses on the back of a strong performance in its deliveries business.
Grab also reported that its spend per user or GMV per monthly transacting user (MTU), increased by +31% YoY, which suggests some synergies between the different verticals across the company's "Super App".
Grab has seen its mobility business suffer from the recent COVID-19 pandemic and the resultant mobility restrictions, which are affecting a number of the company's markets but EBITDA margins remain firm.
The company saw its financial services division experience its highest ever quarterly total payments volume in 1Q2021, with +18% YoY growth.
Grab 's newest division under enterprise and new initiatives saw its GMV increase 3.5x, with a large portion of this division's revenues coming from advertising. 
One area where Grab can be sure to win supporters are on its ESG credentials given that it's natural fit in its support for the livelihoods of both its driver-partners and its widespread community of small merchants.

We took a deep dive with Grab management to better understand its regional prospects and long-term strategy and came away more positive as a result. 
We see the company's increasing collaboration with Emtek (EMTK IJ) as a positive development, which will help fill in some of the gaps to its business in Indonesia.
There are still risks to the company's growth projections and we look to identify where those competitive risks lie. 
Having seen Grab go through the mill with the SEC and after detailed and open discussions with the company plus the company's comprehensive 1Q2021 results release, we have turned more positive on the company's prospects. This leads us to be more comfortable with the valuations, as long as the company can achieve its targets. The company's collaboration with Emtek (EMTK IJ) in Indonesia may also yield further positive developments there. 


Grab - Deep Dive Reveals the Mist Is Lifting

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange (IDX). The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.</p><p>The IDX has announced the changes to the LQ45 Index as a part of the August review. <a href="https://www.smartkarma.com/entities/barito-pacific-tbk-pt" target="_blank" data-smartkarma-citation="entities:8851:1" rel="noopener">Barito Pacific (BRPT IJ)</a> and <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a> have been added to the index while <a href="https://www.smartkarma.com/entities/bank-tabungan-pensiunan-nasi" target="_blank" data-smartkarma-citation="entities:27088:1" rel="noopener">Bank BTPN Syariah (BTPS IJ)</a> and <a href="https://www.smartkarma.com/entities/ciputra-development-tbk-pt" target="_blank" data-smartkarma-citation="entities:5513:1" rel="noopener">Ciputra Development (CTRA IJ)</a> have been deleted from the index.</p><p>We expect the impact of passive funds (and active funds) will be quite high on <a href="https://www.smartkarma.com/entities/barito-pacific-tbk-pt" target="_blank" data-smartkarma-citation="entities:8851:1" rel="noopener">Barito Pacific (BRPT IJ)</a>, <a href="https://www.smartkarma.com/entities/bit-digital-inc" target="_blank" data-smartkarma-citation="entities:31155:1" rel="noopener">Bit Digital (BTBT US)</a> and <a href="https://www.smartkarma.com/entities/ciputra-development-tbk-pt" target="_blank" data-smartkarma-citation="entities:5513:1" rel="noopener">Ciputra Development (CTRA IJ)</a> and significantly lower on <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a>.</p><p>The changes are effective after the close of trading on 30 July, so there are only 4 trading days before passive funds have to rebalance their portfolios. Active funds benchmarked to the LQ45 index will also trade over the next few days so as not to deviate too far from their benchmark.</p>

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange (IDX). The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The IDX has announced the changes to the LQ45 Index as a part of the August review. Barito Pacific (BRPT IJ) and Timah Persero (TINS IJ) have been added to the index while Bank BTPN Syariah (BTPS IJ) and Ciputra Development (CTRA IJ) have been deleted from the index.We expect the impact of passive funds (and active funds) will be quite high on Barito Pacific (BRPT IJ), Bit Digital (BTBT US) and Ciputra Development (CTRA IJ) and significantly lower on Timah Persero (TINS IJ).The changes are effective after the close of trading on 30 July, so there are only 4 trading days before passive funds have to rebalance their portfolios. Active funds benchmarked to the LQ45 index will also trade over the next few days so as not to deviate too far from their benchmark.

LQ45 Index Rebalance: BRPT, TINS In; BTPS, CTRA Out

Elang Mahkota Teknologi / Private Capital Markets

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<p>According to market sources, Bukalapak plans to raise around US$800m in an IPO in Jakarta on the IDX potentially by the end of July, making it the first Indonesian unicorn to list on the local bourse. This would potentially be followed by a SPAC merger in the US, which would value the company at US$4bn-5bn versus the last valuation range of US$2.5-3.0bn. </p>
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<p>Based on the available financial information and recent indications of growth prospects and the path to profitability, we see the suggested valuations as achievable and find Bukalapak an attractive prospect.  </p>
<p>Bukalapak started as a C2C business and one of Indonesia's earliest e-commerce pioneers,  focusing on consumers and sellers outside the major cities in Indonesia, with a focus on specialty goods at low prices. </p>
<p>In 2017, the company started Mitra Bukalapak, which focused on digitalizing the sourcing of products for offline warungs and small kiosks, increasing the range of products and reducing their sourcing costs plus improving margins.</p>
<p>Bukalapak now has more than 7m kiosks and 6m merchants on the platform, which provides a self-sustaining ecosystem, which does not demand high levels of promotional activity. </p>
<p>Bukalapak saw +70% growth in its GMV last year and +130% growth in transactions, with around 34m MAUs and it should achieve +50% growth this year on the current run-rate according to management.</p>
<p>We look at the implied valuations given limited financial information. The company is further along the road to profitability than its e-commerce peers, given its differentiated strategy.</p>
<p>The platform has already attracted some high profile investors including <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> and <a href="https://www.smartkarma.com/entities/standard-chartered-plc" target="_blank" data-smartkarma-citation="entities:193:1" rel="noopener">Standard Chartered (STAN LN)</a>, both of which see opportunities to collaborate with Bukalapak.</p>
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<p>One obvious beneficiary of this IPO will be <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>, which owns over 30% of Bukalapak, in that the investment should realise a higher valuation through its listing. There is also a potential that <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> may look to collaborate with Bukalapak in some way, given it has taken a 4% stake in <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>.</p>
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According to market sources, Bukalapak plans to raise around US$800m in an IPO in Jakarta on the IDX potentially by the end of July, making it the first Indonesian unicorn to list on the local bourse. This would potentially be followed by a SPAC merger in the US, which would value the company at US$4bn-5bn versus the last valuation range of US$2.5-3.0bn. 

Based on the available financial information and recent indications of growth prospects and the path to profitability, we see the suggested valuations as achievable and find Bukalapak an attractive prospect.  
Bukalapak started as a C2C business and one of Indonesia's earliest e-commerce pioneers,  focusing on consumers and sellers outside the major cities in Indonesia, with a focus on specialty goods at low prices. 
In 2017, the company started Mitra Bukalapak, which focused on digitalizing the sourcing of products for offline warungs and small kiosks, increasing the range of products and reducing their sourcing costs plus improving margins.
Bukalapak now has more than 7m kiosks and 6m merchants on the platform, which provides a self-sustaining ecosystem, which does not demand high levels of promotional activity. 
Bukalapak saw +70% growth in its GMV last year and +130% growth in transactions, with around 34m MAUs and it should achieve +50% growth this year on the current run-rate according to management.
We look at the implied valuations given limited financial information. The company is further along the road to profitability than its e-commerce peers, given its differentiated strategy.
The platform has already attracted some high profile investors including Microsoft Corp (MSFT US) and Standard Chartered (STAN LN), both of which see opportunities to collaborate with Bukalapak.

One obvious beneficiary of this IPO will be Emtek (EMTK IJ), which owns over 30% of Bukalapak, in that the investment should realise a higher valuation through its listing. There is also a potential that Grab (0967655D SP) may look to collaborate with Bukalapak in some way, given it has taken a 4% stake in Emtek (EMTK IJ).

   

Bukalapak - Leading the Unicorn Charge - Buy Emtek

Indonesia

PT Surya Citra Media Tbk is an Indonesian media and entertainment company engaged in free-to-air television broadcasting, digital advertising, and content production. It operates national TV channels like SCTV and Indosiar, the Vidio streaming service, and other multimedia platforms, creating and distributing entertainment, news, and sports programming. The company is headquartered in Jakarta, Indonesia, and was founded on January 29, 1999.

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Surya Citra Media (SCMA IJ)

PT Surya Citra Media Tbk (SCMA IJ) - Looking Forward to a Digital Fuelled Future

Surya Citra Media Tbk (SCMA IJ) remains a high-quality proxy for the recovery in free-to-air advertising spending in Indonesia, boosted by the...

Angus Mackintosh

Astro (ASTRO): Netflix Is Included Soon and High FCF Yield.

After 50% increase, Astro is still trading below its pre-COVID-19 level although the business climate has been stable and Netflix has become...

Henry Soediarko

Grab - Deep Dive Reveals the Mist Is Lifting

Grab recently announced its 1Q2021 and help an inaugural analyst meeting to present the results and provide an update. We also talked separately...

Angus Mackintosh

LQ45 Index Rebalance: BRPT, TINS In; BTPS, CTRA Out

The LQ45 rebalance will be implemented at the close on 30 July. BRPT & TINS have been included, replacing BTPS & CTRA. There is a large impact on...

Brian Freitas

Bukalapak - Leading the Unicorn Charge - Buy Emtek

Bukalapak has outlined plans to list in Jakarta, giving access to its leading position in enabling warungs in Indonesia. The immediate beneficiary...

Angus Mackintosh

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