Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

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>Last month a new options program was announced, board members have two milestones to meet by 8/4/2024: get the stock over 0.45 SGD (50% vesting) &amp; 0.60 SGD (50% vesting)</li>
<li>Rex's production in Oman has disappointed but AGM commentary makes us believe the worst is now behind us. A recent Straits Times interview confirms 20K BPD remains the LT target.</li>
<li>Rex has instituted a good dividend policy and should now max out its 10% annual buyback authorization before dividends are paid later in FY22; win-win situation for shareholders and board.</li>
</ul>


Last month a new options program was announced, board members have two milestones to meet by 8/4/2024: get the stock over 0.45 SGD (50% vesting) &amp; 0.60 SGD (50% vesting)
Rex's production in Oman has disappointed but AGM commentary makes us believe the worst is now behind us. A recent Straits Times interview confirms 20K BPD remains the LT target.
Rex has instituted a good dividend policy and should now max out its 10% annual buyback authorization before dividends are paid later in FY22; win-win situation for shareholders and board.


Rex: Show Me the Incentives and I Will Show You the Outcome

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> reported FY21 results in late February which showed a dramatic improvement over FY20 due to rising oil prices and increased production</li>
<li>Accounting wise the picture was muddied by auditor fantasy valuation exercises which understated FY21 results. FY22 to be a "clean" year where positive cash flow impact becomes clearer to market.</li>
<li>Since 08/03/22 Rex trades on the SGX mainboard and remains the best pure-play oil bet in the Singapore market. Current oil prices indicate an FY22 cash flow bonanza.</li>
</ul>



Rex International Holding (REXI SP) reported FY21 results in late February which showed a dramatic improvement over FY20 due to rising oil prices and increased production
Accounting wise the picture was muddied by auditor fantasy valuation exercises which understated FY21 results. FY22 to be a "clean" year where positive cash flow impact becomes clearer to market.
Since 08/03/22 Rex trades on the SGX mainboard and remains the best pure-play oil bet in the Singapore market. Current oil prices indicate an FY22 cash flow bonanza.


Rex: Bargain Purchase and Auditor Fantasy Valuations

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> will report results around 25/2/2022; we expect a major 2H21 performance inflection as the Norwegian Brage field cash flow is included from 01/01/2021.</li>
<li>According to a press release on 13/1/22 the company is actively applying to uplist from Catalist to the mainboard. We see no reason why SGX should not grant this application.</li>
<li>Rex's Oman production has disappointed in 4Q21 but cash flow-wise shortfall should be made up by higher oil prices and Brage. Maiden dividend announcement should be forthcoming.</li>
</ul>



Rex International Holding (REXI SP) will report results around 25/2/2022; we expect a major 2H21 performance inflection as the Norwegian Brage field cash flow is included from 01/01/2021.
According to a press release on 13/1/22 the company is actively applying to uplist from Catalist to the mainboard. We see no reason why SGX should not grant this application.
Rex's Oman production has disappointed in 4Q21 but cash flow-wise shortfall should be made up by higher oil prices and Brage. Maiden dividend announcement should be forthcoming.


Preview Rex International FY21 Results: Prime Beneficiary Of Rising Oil Price

<p><a href="https://www.smartkarma.com/entities/rex-international-holding" target="_blank" data-smartkarma-citation="entities:17074:1" rel="noopener">Rex International Holding (REXI SP)</a> has fallen back from 0.25 SGD last month to below 0.19 SGD recently. This is despite oil prices staying around 70 USD/bbl and Rex reporting fantastic 1H21 results.</p><p>Rex also announced that after Oman and Norway it is studying to develop some oil fields in Malaysia. Rex is looking to diversify its production base so they are less dependent on one country. Cash is literally gushing in from its Oman assets and will accelerate in 2H21 as its Norwegian purchase of the Brage field will be accounted for in 2H.</p><p>Rex's stock is up 29% YTD but remains deep value on an absolute basis and relative to peers such as <a href="https://www.smartkarma.com/entities/hibiscus-petroleum-bhd" target="_blank" data-smartkarma-citation="entities:20775:1" rel="noopener">Hibiscus Petroleum (HIBI MK)</a>. <strong>We continue to believe Rex will at least double from current levels as at some point the growing cash flows can no longer be ignored by investors.</strong> The eventual end-game has not changed: given the age of the principal shareholders, we believe Rex will see a lot of corporate activity going forward. We are unsure of the timeframe and shape/form this takes (spin-off, partial divestments, partial return of capital, one-off dividends, large share buybacks, 100% sale to different owners, etc).  </p>

Rex International Holding (REXI SP) has fallen back from 0.25 SGD last month to below 0.19 SGD recently. This is despite oil prices staying around 70 USD/bbl and Rex reporting fantastic 1H21 results.Rex also announced that after Oman and Norway it is studying to develop some oil fields in Malaysia. Rex is looking to diversify its production base so they are less dependent on one country. Cash is literally gushing in from its Oman assets and will accelerate in 2H21 as its Norwegian purchase of the Brage field will be accounted for in 2H.Rex's stock is up 29% YTD but remains deep value on an absolute basis and relative to peers such as Hibiscus Petroleum (HIBI MK). We continue to believe Rex will at least double from current levels as at some point the growing cash flows can no longer be ignored by investors. The eventual end-game has not changed: given the age of the principal shareholders, we believe Rex will see a lot of corporate activity going forward. We are unsure of the timeframe and shape/form this takes (spin-off, partial divestments, partial return of capital, one-off dividends, large share buybacks, 100% sale to different owners, etc).  

Rex: Oman + Norway + Malaysia Is the New Trifecta; Stock Trades at 1.5x 2021 Earnings

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For our next Webinar, we have the pleasure of welcoming Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a>, who will talk to us about some of his favourite Singapore-based small- and mid-cap investment ideas and his view on them going forward.</p><div><div><h3>The webinar will be hosted on Wednesday, 11 August 2021, 17:00 SGT/HKT.</h3></div></div><div><div>
<div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=86724910057" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>
<p>Nicolas Van Broekhoven is a generalist investor with a preference for small and mid-cap companies and special situations. He grew up in Europe, went to university in the US, and lives in Singapore, which has given him a broad scope on the world and investing in general.</p>
</div></div>

For our next Webinar, we have the pleasure of welcoming Insight Provider Nicolas Van Broekhoven, who will talk to us about some of his favourite Singapore-based small- and mid-cap investment ideas and his view on them going forward.The webinar will be hosted on Wednesday, 11 August 2021, 17:00 SGT/HKT.
Register for the Webinar here
Nicolas Van Broekhoven is a generalist investor with a preference for small and mid-cap companies and special situations. He grew up in Europe, went to university in the US, and lives in Singapore, which has given him a broad scope on the world and investing in general.


Smartkarma Webinar | Singapore Investment Ideas

Singapore

Rex International is a multinational oil exploration and production (E&P) company with interests in exploration and production licenses in Oman, Norway, and Benin. It also offers its proprietary Rex Virtual Drilling technology, a liquid hydrocarbon indicator. The company was founded in Singapore on January 11, 2013.

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Rex International (REXI SP)

Rex: Show Me the Incentives and I Will Show You the Outcome

Rex share awards show clear incentives for the board to maximize value over the coming two years. Buying back 10% of shares outstanding would be...

Nicolas Van Broekhoven

Rex: Bargain Purchase and Auditor Fantasy Valuations

Rex reported stellar FY21 results. Accounting fantasy valuations suppressed the true cash flow impact but this noise should disappear in FY22....

Nicolas Van Broekhoven

Preview Rex International FY21 Results: Prime Beneficiary Of Rising Oil Price

Rex will report FY21 results in late February. We expect results to be a major wake-up call to investors as the Norwegian Brage field cash flows...

Nicolas Van Broekhoven

Rex: Oman + Norway + Malaysia Is the New Trifecta; Stock Trades at 1.5x 2021 Earnings

Rex reported stellar 1H21 results and cash flow will accelerate significantly in 2H21. Rex trades at 1.5x FY21 PATMI which makes this an absolute...

Nicolas Van Broekhoven

Smartkarma Webinar | Singapore Investment Ideas

Join us on 11 August, 5pm SGT, when we talk to Nicolas Van Broekhoven about some of his favourite Singapore-based small- and mid-cap investment...

Smartkarma Research

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