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/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> released a stellar set of 1Q2021 results, with revenue growth of +37.3% YoY, and net profit growth of +27.1% YoY, which continued to reflect better than expected growth in its end-to-end logistics business, and notably Anteraja, its last-mile delivery service.</p>
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<p>The company's three pillars including transport, car auction, and end-to-end logistics, all registered strong growth. The company's last-mile express delivery service Anteraja saw especially strong growth driven by the e-commerce ecosystem as it is providing deliveries for most of the major players. </p>
<p>Anteraja's continues to expand its business, with daily parcel deliveries hitting 500,000 in 1Q2021 and targets 700,000-750,000 parcels a day by the end of the year.</p>
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<section class="figure"><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a>'s auction business also recorded positive revenue growth of +3.8%  in 1Q2021 but has seen a recent pick up in growth. </section>
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<section class="figure"><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener"></a>The company continues to develop its app-based businesses such as Share Car and used car marketplace, Caroline.</section>
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<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> targets revenue growth 0f +20%-25% for 2021 mainly driven by the growth from end-to-end logistics and specifically Anteraja, together with e-commerce sharing warehouse Titipaja. </p>
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<p>The company also recently had its rights issue of zero-coupon convertible bonds approved, which will raise a total of IDR720bn. This will help the company reduce the debt used to expand its logistics businesses over the past year.</p>
<p>We continue to believe in the <a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> digital transformation story, with ongoing synergies between the three pillars of its business.</p>
<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> trades on 10.9x FY21E EV/EBITDA and 8.7x FY22E EV/EBITDA and an FY22E PER of 30x but we expect continuing momentum behind the growth and rising profitability story, as Anteraja gains scale and grows its revenues.</p>
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Adi Sarana Armada (ASSA IJ) released a stellar set of 1Q2021 results, with revenue growth of +37.3% YoY, and net profit growth of +27.1% YoY, which continued to reflect better than expected growth in its end-to-end logistics business, and notably Anteraja, its last-mile delivery service.

The company's three pillars including transport, car auction, and end-to-end logistics, all registered strong growth. The company's last-mile express delivery service Anteraja saw especially strong growth driven by the e-commerce ecosystem as it is providing deliveries for most of the major players. 
Anteraja's continues to expand its business, with daily parcel deliveries hitting 500,000 in 1Q2021 and targets 700,000-750,000 parcels a day by the end of the year.

Adi Sarana Armada (ASSA IJ)'s auction business also recorded positive revenue growth of +3.8%  in 1Q2021 but has seen a recent pick up in growth. 



The company continues to develop its app-based businesses such as Share Car and used car marketplace, Caroline.





Adi Sarana Armada (ASSA IJ) targets revenue growth 0f +20%-25% for 2021 mainly driven by the growth from end-to-end logistics and specifically Anteraja, together with e-commerce sharing warehouse Titipaja. 

The company also recently had its rights issue of zero-coupon convertible bonds approved, which will raise a total of IDR720bn. This will help the company reduce the debt used to expand its logistics businesses over the past year.
We continue to believe in the Adi Sarana Armada (ASSA IJ) digital transformation story, with ongoing synergies between the three pillars of its business.
Adi Sarana Armada (ASSA IJ) trades on 10.9x FY21E EV/EBITDA and 8.7x FY22E EV/EBITDA and an FY22E PER of 30x but we expect continuing momentum behind the growth and rising profitability story, as Anteraja gains scale and grows its revenues.






Adi Sarana Armada (ASSA IJ) - End-To End Aspirations on Track

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Full Truck Alliance   / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a>, known as <em>Manbang</em> in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of <em>Yunmanman</em> and <em>Huochebang</em>, which were founded in 2013 and 2011, respectively. FTA is seeking to raise $1.5 billion through an NYSE listing, according to press reports. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. </p><p>FTA joins peer <a href="https://www.smartkarma.com/entities/foru-worldwide-inc" target="_blank" data-smartkarma-citation="entities:33314:1" rel="noopener">ForU Worldwide (FOYO US)</a> which also recently filed for a $500 million Nasdaq IPO. Confusingly, ForU notes that it is the largest technology-driven road freight transportation platform in China as measured by revenue in 2020, according to CIC. However, comparing FTA and ForU based on reported revenue is an apples-to-oranges comparison due to differing revenue recognition policies. In <a href="https://www.smartkarma.com/insights/foru-worldwide-ipo-initiation-not-foru" target="_blank" data-smartkarma-citation="insights:51888" rel="noopener">ForU Worldwide IPO Initiation: Not ForU</a>, we opined that ForU faces several challenges and the financials on a normalised basis appears to be middling at best.    </p><div class="content-highlight"><p>At first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. In an environment where sentiment on high-growth stocks and in particular Chinese US tech listings is weak, IPO hopefuls should not provide ready ammunition to the bears. Consequently, we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   </p></div>

Full Truck Alliance (YMM US), known as Manbang in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of Yunmanman and Huochebang, which were founded in 2013 and 2011, respectively. FTA is seeking to raise $1.5 billion through an NYSE listing, according to press reports. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and Tencent (700 HK). FTA joins peer ForU Worldwide (FOYO US) which also recently filed for a $500 million Nasdaq IPO. Confusingly, ForU notes that it is the largest technology-driven road freight transportation platform in China as measured by revenue in 2020, according to CIC. However, comparing FTA and ForU based on reported revenue is an apples-to-oranges comparison due to differing revenue recognition policies. In ForU Worldwide IPO Initiation: Not ForU, we opined that ForU faces several challenges and the financials on a normalised basis appears to be middling at best.    At first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. In an environment where sentiment on high-growth stocks and in particular Chinese US tech listings is weak, IPO hopefuls should not provide ready ammunition to the bears. Consequently, we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   

Full Truck Alliance IPO Initiation: A Less than Perfect Delivery

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>In this insight, we discuss the gray market value and the very long view of JD Logistics. The <a href="https://inews.hket.com/article/2967663/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E4%BA%AC%E6%9D%B1%E7%89%A9%E6%B5%812618%E6%9A%97%E7%9B%A4%E5%8D%87%E5%85%A9%E8%87%B3%E4%B8%89%E6%88%90%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E6%9C%80%E5%A4%9A%E8%B3%BA1199%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">gray market value</a> of JD Logistics has been trading at 30 to 40%+ higher than the IPO price, which is favorable for the IPO. We continue to maintain our positive view of JD Logistics. Our base case valuation of JD Logistics is $47.6 billion, which is based on a 2.3x EV/S valuation multiple and applying our 2022 estimated sales of 123.4 billion RMB.</p><p>In this IPO, there will likely be some investors that choose to take partial profits on the day of trading, especially if it goes up 30-50%+ from the IPO price. However, there will also be many investors that choose to take much longer view of the company. In our view, there is likely to be very significant improvements in the use of technology such as automation, robotics, and artificial intelligence to reduce the long-term operating costs of the company.</p><p>Over a much longer time frame (8-15 years), we believe that there is a real possibility that the employees related expenses as a percentage of sales could be reduced much further to about 20%, using greater amounts of AI driven automated robotics, much lower than in 2020 when labor costs accounted for 35.5% of total sales. </p>

In this insight, we discuss the gray market value and the very long view of JD Logistics. The gray market value of JD Logistics has been trading at 30 to 40%+ higher than the IPO price, which is favorable for the IPO. We continue to maintain our positive view of JD Logistics. Our base case valuation of JD Logistics is $47.6 billion, which is based on a 2.3x EV/S valuation multiple and applying our 2022 estimated sales of 123.4 billion RMB.In this IPO, there will likely be some investors that choose to take partial profits on the day of trading, especially if it goes up 30-50%+ from the IPO price. However, there will also be many investors that choose to take much longer view of the company. In our view, there is likely to be very significant improvements in the use of technology such as automation, robotics, and artificial intelligence to reduce the long-term operating costs of the company.Over a much longer time frame (8-15 years), we believe that there is a real possibility that the employees related expenses as a percentage of sales could be reduced much further to about 20%, using greater amounts of AI driven automated robotics, much lower than in 2020 when labor costs accounted for 35.5% of total sales. 

JD Logistics: Gray Market Value & The Very Long-Term View Driven by Technological Innovations

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> , the logistics arm of China’s second largest e-commerce platform <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> has priced its IPO at HK$40.36 a share, about 2.5% higher than the lower end of the IPO price range of HK$39.36-43.36 a share despite generating significant interest from both retail and institutional investors. According to news media outlets, the offer was oversubscribed by more than 700x.</p><p>JD Logistics will raise approx. HK$24.6bn at the IPO price of HK$40.36 per share (assuming over-allotment is not exercised). If the over-allotment option of additional 90m shares is exercised, JD Logistics’ will raise additional proceeds of HK$3.6bn increasing the total proceeds to HK$28.2bn.</p>

JD Logistics (2618 HK) , the logistics arm of China’s second largest e-commerce platform JD.com Inc (ADR) (JD US) has priced its IPO at HK$40.36 a share, about 2.5% higher than the lower end of the IPO price range of HK$39.36-43.36 a share despite generating significant interest from both retail and institutional investors. According to news media outlets, the offer was oversubscribed by more than 700x.JD Logistics will raise approx. HK$24.6bn at the IPO price of HK$40.36 per share (assuming over-allotment is not exercised). If the over-allotment option of additional 90m shares is exercised, JD Logistics’ will raise additional proceeds of HK$3.6bn increasing the total proceeds to HK$28.2bn.

JD Logistics IPO: Thoughts on First Day Trading

<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics will commence trading on Friday, 28 May. JD Logistics priced its IPO at HK$40.36 and the shares <a href="https://inews.hket.com/article/2967663/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E4%BA%AC%E6%9D%B1%E7%89%A9%E6%B5%812618%E6%9A%97%E7%9B%A4%E5%8D%87%E9%80%BE3%E6%88%90%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA%E7%B4%841200%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">stood 31% higher</a> at HK$53.00 in the Futu securities' grey market.</p><div>
<p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-prioritizing-market-share-gains-over-margins" target="_blank" data-smartkarma-citation="insights:50976" rel="noopener">JD Logistics IPO: Prioritizing Market Share Gains over Margins</a>, we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:51524" rel="noopener">JD Logistics IPO: Valuation Insights</a>, we noted that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth.</p>
<div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target is HK$48.91 per share. Our DCF sensitivity and relative valuation analysis shows that the IPO price is attractive and the grey market price is justifiable. </p></div>
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JD Logistics (2618 HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics will commence trading on Friday, 28 May. JD Logistics priced its IPO at HK$40.36 and the shares stood 31% higher at HK$53.00 in the Futu securities' grey market.
In JD Logistics IPO: Prioritizing Market Share Gains over Margins, we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. In JD Logistics IPO: Valuation Insights, we noted that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth.
Updating for the final IPO net raise, our base-case DCF derived price target is HK$48.91 per share. Our DCF sensitivity and relative valuation analysis shows that the IPO price is attractive and the grey market price is justifiable. 


Hong Kong

S. F. Holding Co., Ltd. offers express courier services. The Company provides logistics, order tracking, supply chain management, warehousing, and other services. S. F. Holding offers services worldwide.

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S.F. Holding (6936 HK)

Adi Sarana Armada (ASSA IJ) - End-To End Aspirations on Track

ASSA remains a high-growth Indonesian transport and logistics player, which is increasingly driven by the rapid growth of its last-mile delivery...

Angus Mackintosh

Full Truck Alliance IPO Initiation: A Less than Perfect Delivery

FTA is seeking to raise $1.5 billion through an NYSE listing, according to press reports. We cannot recommend FTA wholeheartedly and inclined to...

Arun George

JD Logistics: Gray Market Value & The Very Long-Term View Driven by Technological Innovations

In this insight, we discuss the gray market value and the very long view of JD Logistics. The gray market value of JD Logistics has been trading at...

Douglas Kim

JD Logistics IPO: Thoughts on First Day Trading

By pricing JD Logistics' shares close to the lower end of the IPO price range, we believe the company is offering enough room for shares to rise...

Shifara Samsudeen, FCMA, CGMA

JD Logistics IPO: Trading Debut

JD Logistics priced its IPO at HK$40.36 and stood 31% higher at HK$53.00 in the grey market. Our DCF sensitivity and relative valuation analysis...

Arun George

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