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

Thematic (Sector/Industry)

<ul>
<li>The 2023 vintage of "5 High Conviction Ideas" was commodity heavy with 4 of our 5 picks coming from this sector. Three out of five declined between 15-25%. </li>
<li>Our best performer was unloved <a href="https://www.smartkarma.com/entities/mongolian-mining-corp" target="_blank" data-smartkarma-citation="entities:4382:1" rel="noopener">Mongolian Mining (975 HK)</a> which returned 234% even beating <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a> YTD performance.  Miracles happen: Coal mining beats AI.</li>
<li>Our 2024 vintage of top ideas for the year will hopefully have a higher hit ratio. See below for more details which are our five high conviction ideas for 2024.</li>
</ul>


The 2023 vintage of "5 High Conviction Ideas" was commodity heavy with 4 of our 5 picks coming from this sector. Three out of five declined between 15-25%. 
Our best performer was unloved Mongolian Mining (975 HK) which returned 234% even beating NVIDIA Corp (NVDA US) YTD performance.  Miracles happen: Coal mining beats AI.
Our 2024 vintage of top ideas for the year will hopefully have a higher hit ratio. See below for more details which are our five high conviction ideas for 2024.


Overview of My Winners and Losers in 2023...and 5 High Conviction Ideas Going Into 2024

Equity Bottom-Up

Rex International Holding / Equity Bottom-Up

<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> has announced further investments outside of its core oil&amp;gas portfolio both related to its major shareholder. A major red flag.</li>
<li>It is unclear whether these investments will bring real value to Rex as minority investors generally hate related party transactions without clear justification.</li>
<li>The latest drilling campaign in Oman again encountered operational issues giving fuel to the bears that Rex is not capable of successfully operating its own fields.</li>
</ul>



Rex International Holding (REXI SP) has announced further investments outside of its core oil&amp;gas portfolio both related to its major shareholder. A major red flag.
It is unclear whether these investments will bring real value to Rex as minority investors generally hate related party transactions without clear justification.
The latest drilling campaign in Oman again encountered operational issues giving fuel to the bears that Rex is not capable of successfully operating its own fields.


<ul>
<li>Rex reported a disappointing set of results mainly due to continued struggles in Oman. While Oman production was well over 10K bpd in 1H21 it deteriorated every month in 1H22.</li>
<li>Revenue was 99.45M USD (+31%) but we estimate it would have been closer to 149M USD if the Yumna field wouldn't have stopped producing for almost 70 days in 1H22.</li>
<li>YTD stock is -23% and can only reverse if management proves Oman is ready to rebound. Dividend payments will start on a quarterly basis as of October 2022.</li>
</ul>


Rex reported a disappointing set of results mainly due to continued struggles in Oman. While Oman production was well over 10K bpd in 1H21 it deteriorated every month in 1H22.
Revenue was 99.45M USD (+31%) but we estimate it would have been closer to 149M USD if the Yumna field wouldn't have stopped producing for almost 70 days in 1H22.
YTD stock is -23% and can only reverse if management proves Oman is ready to rebound. Dividend payments will start on a quarterly basis as of October 2022.


Rex 1H22 Results: All Eyes on Recovery in Oman; Trading on 8.3% Dividend Yield

<ul>
<li>Rex will soon close a disappointing 1H22 as equipment upgrades and maintenance hamper production in Oman. Recently production was halted again due to a small oil leak in its flowline.</li>
<li>Norway's production has been declining in 1H. Rebound hopefully in 2H. New bond financing was announced for more Norwegian M&amp;A. Malaysian assets to get the green light in 2H22.</li>
<li>Rex remains very cheap but needs to deliver on operational milestones to unlock value. YTD share price performance has lagged sector peers substantially.</li>
</ul>


Rex will soon close a disappointing 1H22 as equipment upgrades and maintenance hamper production in Oman. Recently production was halted again due to a small oil leak in its flowline.
Norway's production has been declining in 1H. Rebound hopefully in 2H. New bond financing was announced for more Norwegian M&amp;A. Malaysian assets to get the green light in 2H22.
Rex remains very cheap but needs to deliver on operational milestones to unlock value. YTD share price performance has lagged sector peers substantially.


<ul>
<li>The 2022 vintage of "5 High Conviction Ideas" had the weakest performance since 2017, with only China Shineway posting a positive return</li>
<li>Olam, Rex and Starhub all declined approximately 16% in FY22</li>
<li>Our 2023 vintage will hopefully perform better with 4 out of 5 favorites in the commodity space</li>
</ul>


The 2022 vintage of "5 High Conviction Ideas" had the weakest performance since 2017, with only China Shineway posting a positive return
Olam, Rex and Starhub all declined approximately 16% in FY22
Our 2023 vintage will hopefully perform better with 4 out of 5 favorites in the commodity space


Overview of My Winners and Losers in 2022...And 5 High Conviction Ideas Going into 2023

Singapore

Rex International Holding Limited is a production and exploration oil company with concessions in Norway, UAE, Oman, and the US.

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Rex International Holding (REXI SP)

Overview of My Winners and Losers in 2023...and 5 High Conviction Ideas Going Into 2024

Our stand-out performer in FY23 was little loved Mongolia Mining. For FY24 we provide five new names which we think can perform strongly.

Nicolas Van Broekhoven

Rex: Diversification or Deworsification?

Rex has morphed into a Lidgren family holding where it is unclear what minority investors are buying into. The risk of more inter-related party...

Nicolas Van Broekhoven

Rex 1H22 Results: All Eyes on Recovery in Oman; Trading on 8.3% Dividend Yield

Rex had a challenging 1H22 as production in Oman ground to a halt for almost 70 days. Rex will now have to prove to investors it can recover and...

Nicolas Van Broekhoven

Preview Rex International: 1H22 Results

Rex had a poor 1H22 and is hoping to catch up lost performance in 2H22. More M&A in Norway should help lift its production profile. Malaysian entry...

Nicolas Van Broekhoven

Overview of My Winners and Losers in 2022...And 5 High Conviction Ideas Going into 2023

Our FY22 vintage of High Conviction Ideas had its weakest performance since FY17. We hope for better returns for our commodity-focused FY23 selection.

Nicolas Van Broekhoven

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