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

<a href="https://www.smartkarma.com/entities/pt-aneka-gas-industri" target="_blank" data-smartkarma-citation="entities:23564:1" rel="noopener">Aneka Gas (AGII IJ)</a> is Indonesia's leading industrial gas company, which is often under-appreciated as the immediate assumption is that is purely an industrial supplier. In fact, that it is plugged into a broad swath of the Indonesian economy, which makes it a proxy for recovery but relatively defensive at the same time. 
It supplies industrial users but also supplies medical gases, consumer companies, SMEs (retail), and infrastructure through welding and its input into the steel-making process.
The latest potential use-case and growth area comes with the rapid build-out of smelters in Indonesia to process metals and minerals locally. 
<a href="https://www.smartkarma.com/entities/pt-aneka-gas-industri" target="_blank" rel="noopener">Aneka Gas (AGII IJ)</a> has seen an increase in demand for gas products for medical needs of around +50% after the last Eid holiday
We continue to take a positive view of <a href="https://www.smartkarma.com/entities/pt-aneka-gas-industri" target="_blank" data-smartkarma-citation="entities:23564:1" rel="noopener">Aneka Gas (AGII IJ)</a>not only for its exposure to the provision of medical gas but also for overall exposure to the economic recovery, through its exposure to industry consumer goods, SMEs, and infrastructure. The company trades on 10.3x FY21E EV/EBITDA and 9.8x FY22E EV/EBITDA, with the potential for earnings upgrades.

Aneka Gas (AGII IJ) is Indonesia's leading industrial gas company, which is often under-appreciated as the immediate assumption is that is purely an industrial supplier. In fact, that it is plugged into a broad swath of the Indonesian economy, which makes it a proxy for recovery but relatively defensive at the same time. 
It supplies industrial users but also supplies medical gases, consumer companies, SMEs (retail), and infrastructure through welding and its input into the steel-making process.
The latest potential use-case and growth area comes with the rapid build-out of smelters in Indonesia to process metals and minerals locally. 
Aneka Gas (AGII IJ) has seen an increase in demand for gas products for medical needs of around +50% after the last Eid holiday
We continue to take a positive view of Aneka Gas (AGII IJ)not only for its exposure to the provision of medical gas but also for overall exposure to the economic recovery, through its exposure to industry consumer goods, SMEs, and infrastructure. The company trades on 10.3x FY21E EV/EBITDA and 9.8x FY22E EV/EBITDA, with the potential for earnings upgrades.

Aneka Gas (AGII IJ) - Living and Breathing the Indonesian Economy

<a href="https://www.smartkarma.com/entities/lippo-karawaci-tbk-pt" target="_blank" data-smartkarma-citation="entities:3121:1" rel="noopener">Lippo Karawaci (LPKR IJ)</a> just released a solid set of numbers for 1Q2021, with strong revenue and profit growth driven by its core healthcare and residential property businesses.
Marketing Sales were up by  +86% YoY to IDR1.3tn reflecting the company's renewed focus on its core residential property pillar and especially the affordable market. It is well on-track to meet or exceed its FY2021 marketing sales target.
Following the <a href="https://www.smartkarma.com/entities/lippo-malls-indonesia-retail-trust" target="_blank" data-smartkarma-citation="entities:10946:1" rel="noopener">Lippo Malls Indonesia Retail Trust (LMRT SP)</a> rights issue, <a href="https://www.smartkarma.com/entities/lippo-karawaci-tbk-pt" target="_blank" data-smartkarma-citation="entities:3121:1" rel="noopener">Lippo Karawaci (LPKR IJ)</a> increased its stake in the Singapore-based REIT to 58.35% making the company the controlling shareholder and therefore consolidating the REIT into LPKR’s financials. Malls are not expected to return to pre-COVID-19 levels until 1Q/2Q2022 but should start to improve gradually. 
A key point of progress is that the company has completed construction for all its legacy projects as at the end of May, opening the way for sales over the next few quarters. 
<a href="https://www.smartkarma.com/entities/siloam-international-hospital" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospital (SILO IJ)</a> performance remained very strong with sales increasing by +35% YoY and EBITDA hitting a record high with an expansion in margins. 2Q2021 looks set to become another record quarter. 
The strong marketing sales in 1Q2021 and are a true indicator of future sales and profits. We expect the momentum to continue over the next few quarters, with a continuing focus on the affordable segment. 
<a href="https://www.smartkarma.com/entities/lippo-karawaci-tbk-pt" target="_blank" data-smartkarma-citation="entities:3121:1" rel="noopener">Lippo Karawaci (LPKR IJ)</a> remains interesting given its increased focus on its core residential business having successfully restructured its debt last year. The company trades on 0.6x FY21E PBV but at around an 80% discount to its NAV, with earnings turning positive this year, making it more than just a restructuring play.

Lippo Karawaci (LPKR IJ) just released a solid set of numbers for 1Q2021, with strong revenue and profit growth driven by its core healthcare and residential property businesses.
Marketing Sales were up by  +86% YoY to IDR1.3tn reflecting the company's renewed focus on its core residential property pillar and especially the affordable market. It is well on-track to meet or exceed its FY2021 marketing sales target.
Following the Lippo Malls Indonesia Retail Trust (LMRT SP) rights issue, Lippo Karawaci (LPKR IJ) increased its stake in the Singapore-based REIT to 58.35% making the company the controlling shareholder and therefore consolidating the REIT into LPKR’s financials. Malls are not expected to return to pre-COVID-19 levels until 1Q/2Q2022 but should start to improve gradually. 
A key point of progress is that the company has completed construction for all its legacy projects as at the end of May, opening the way for sales over the next few quarters. 
Siloam International Hospital (SILO IJ) performance remained very strong with sales increasing by +35% YoY and EBITDA hitting a record high with an expansion in margins. 2Q2021 looks set to become another record quarter. 
The strong marketing sales in 1Q2021 and are a true indicator of future sales and profits. We expect the momentum to continue over the next few quarters, with a continuing focus on the affordable segment. 
Lippo Karawaci (LPKR IJ) remains interesting given its increased focus on its core residential business having successfully restructured its debt last year. The company trades on 0.6x FY21E PBV but at around an 80% discount to its NAV, with earnings turning positive this year, making it more than just a restructuring play. 

Lippo Karawaci (LPKR IJ) - Affordable Luxury

Mitra Keluarga Karyasehat / Equity Bottom-Up

<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> announced a robust set of results for 1Q2021 late last week, with revenue growth of +37.6% YoY, mainly driven by COVID-19 cases, which command a higher treatment intensity.
Volume for Non-COVID-19 inpatient days also increased, up +5.6% QoQ compared to 4Q 2020, with occupancy improving to 61% for non-COVID beds. The improvement in non-COVID-19 patients bodes well for this year's outlook. 
Mitra Keluarga continues to add more hospitals, through both greenfield and brownfield expansion plans and has opened one new hospital already this year. It will commence the groundbreaking for its 27th &amp; 28th hospitals in 1H2021. M&amp;A opportunities also remain a potential growth driver with two other hospitals currently in the pipeline. 
Patient numbers declined in 1Q2021 YoY but revenues per outpatient and inpatient days increased significantly due to a significantly higher number of COVID-19 patients being treated. 
<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> bed Occupancy Ratio reached 63.4% for 1Q2021, compared to 65.7% in 1Q2020, mainly boosts by high COVID-19 bed occupancies, although non-COVID bed occupancies were not far off last year.
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<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> trades on 23.9x FY21E EV/EBITDA and 24.2x FY22E EV/EBITDA versus its 5-year average of 29.5x making the company look relatively attractive. It is likely to see a gradual tapering off in terms of revenues from COVID-19 treatments as the vaccination program starts to gain traction but it will still be an important source of revenue in the medium term, together with the fact that it is already seeing a pick-up in its normal elective treatments.
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Mitra Keluarga Karyasehat Tbk (MIKA IJ) announced a robust set of results for 1Q2021 late last week, with revenue growth of +37.6% YoY, mainly driven by COVID-19 cases, which command a higher treatment intensity.
Volume for Non-COVID-19 inpatient days also increased, up +5.6% QoQ compared to 4Q 2020, with occupancy improving to 61% for non-COVID beds. The improvement in non-COVID-19 patients bodes well for this year's outlook. 
Mitra Keluarga continues to add more hospitals, through both greenfield and brownfield expansion plans and has opened one new hospital already this year. It will commence the groundbreaking for its 27th &amp; 28th hospitals in 1H2021. M&amp;A opportunities also remain a potential growth driver with two other hospitals currently in the pipeline. 
Patient numbers declined in 1Q2021 YoY but revenues per outpatient and inpatient days increased significantly due to a significantly higher number of COVID-19 patients being treated. 
Mitra Keluarga Karyasehat Tbk (MIKA IJ) bed Occupancy Ratio reached 63.4% for 1Q2021, compared to 65.7% in 1Q2020, mainly boosts by high COVID-19 bed occupancies, although non-COVID bed occupancies were not far off last year.

Mitra Keluarga Karyasehat Tbk (MIKA IJ) trades on 23.9x FY21E EV/EBITDA and 24.2x FY22E EV/EBITDA versus its 5-year average of 29.5x making the company look relatively attractive. It is likely to see a gradual tapering off in terms of revenues from COVID-19 treatments as the vaccination program starts to gain traction but it will still be an important source of revenue in the medium term, together with the fact that it is already seeing a pick-up in its normal elective treatments.


Mitra Keluarga Karyasehat (MIKA IJ) - Occupancy and Profitability Rising

Siloam International Hospitals / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/siloam-international-hospital" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospital (SILO IJ)</a> released an impressive set of FY2020 numbers last week evening with net operating revenues up by +5.3% but EBITDA up by +37.4% and with EBITDA margins increasing to 21.6% versus 16.6% in 2019. Net profit was up by +365.8% YoY to IDR125bn in FY2020, whilst the company's free cash flow increased by +772% to IDR1,068bn in FY2020 as a whole. 
Average revenue per inpatient days increased by +19.1% YoY, whilst average revenue per outpatient visits increased by +39.9% YoY in FY2020, both of which helped to offset lower inpatient and outpatient numbers. 
The company has put in place a number of new initiatives to grow the business and continue to monetize existing assets more effectively. This should continue to drive future revenues and profitability, coupled with more effective pricing across its hospital network and more effective cost savings as procurement.
<a href="https://www.smartkarma.com/entities/siloam-international-hospital" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospital (SILO IJ)</a> continues to benefit from COViD-19 testing and treatment, which saw a ramp-up during 2020, and has continued into 2021. 
The company also paid a special dividend to recognize its transformation successes on top of a 45% payout ratio bringing the total payout to 181%, with a commitment to payout more than 25% of earnings as a dividend barring unforeseen circumstances.
<a href="https://www.smartkarma.com/entities/siloam-international-hospital" target="_blank" data-smartkarma-citation="entities:878:1" rel="noopener">Siloam International Hospital (SILO IJ)</a> trades on an FY21E EV/EBITDA of 9.9x and FY22E EV/EBITDA of 6.6x making it look attractive both from a historical perspective  and versus local hospital peers <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> and <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>, as well as its regional peer group. We also expect upward revisions to analyst forecasts.

Siloam International Hospital (SILO IJ) released an impressive set of FY2020 numbers last week evening with net operating revenues up by +5.3% but EBITDA up by +37.4% and with EBITDA margins increasing to 21.6% versus 16.6% in 2019. Net profit was up by +365.8% YoY to IDR125bn in FY2020, whilst the company's free cash flow increased by +772% to IDR1,068bn in FY2020 as a whole. 
Average revenue per inpatient days increased by +19.1% YoY, whilst average revenue per outpatient visits increased by +39.9% YoY in FY2020, both of which helped to offset lower inpatient and outpatient numbers. 
The company has put in place a number of new initiatives to grow the business and continue to monetize existing assets more effectively. This should continue to drive future revenues and profitability, coupled with more effective pricing across its hospital network and more effective cost savings as procurement.
Siloam International Hospital (SILO IJ) continues to benefit from COViD-19 testing and treatment, which saw a ramp-up during 2020, and has continued into 2021. 
The company also paid a special dividend to recognize its transformation successes on top of a 45% payout ratio bringing the total payout to 181%, with a commitment to payout more than 25% of earnings as a dividend barring unforeseen circumstances.
Siloam International Hospital (SILO IJ) trades on an FY21E EV/EBITDA of 9.9x and FY22E EV/EBITDA of 6.6x making it look attractive both from a historical perspective  and versus local hospital peers Mitra Keluarga Karyasehat Tbk (MIKA IJ) and Medikaloka Hermina (HEAL IJ), as well as its regional peer group. We also expect upward revisions to analyst forecasts. 

Siloam International Hospital (SILO IJ) - A Quickening Metabolism

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Indonesia's leading diagnostics company, <a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> just released a strong set of FY2020 numbers, confirming the company's ability to adapt and thrive in the face of the pandemic. It looks set to resume its expansion and trades on very attractive valuations.
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<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> saw its net profit increase by  +7.4% to IDR1,873.38bn, with revenues from each customer segment increasing and making a significant contribution.
Individual and referral customers from doctors made up 61.2% of revenues, whilst third-party referrals and corporate clients made up 38.8% of total revenues.
In 2020, the total number of tests reached 13.99m from 3.06m visits, with the demand for esoteric testing increasing by +191.5% YoY in 2020 to 1.6 million tests. Revenue from esoteric tests increased by +131.8% in 2020 to IDR700.3bn.
<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> continues to provide assistance to the government in dealing with the COVID-19 pandemic by providing tests for COVID-19 using the rapid test method, EIA antibody serology test, and PCR COVID-19,  and performing more than 1m COVID-19 tests in Indonesia in 2020.
<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> continues to expand the capacity for PCR COVID-19 examinations to more than 2,000 tests/day by adding the Cobas 6800 automatic testing tool.
<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> continues to add to its digital capabilities to aims to provide convenience for customers, without them having to visit the Prodia Lab through teleconsulting and the Prodia App. 
The company plans to expand its clinical labs, hospital labs, POC outlets, and add one specialty clinic in 2021, after a pause in 2020. Apart from growing its network of outlets, the company plans to upgrade its existing clinical labs to provide a greater array of tests.
<a href="https://www.smartkarma.com/entities/prodia-widyahusada" target="_blank" data-smartkarma-citation="entities:23663:1" rel="noopener">Prodia Widyahusada (PRDA IJ)</a> valuations are very attractive versus healthcare peers in Indonesia but also Indian diagnostic peers, which trade on significantly higher multiples.


Indonesia's leading diagnostics company, Prodia Widyahusada (PRDA IJ) just released a strong set of FY2020 numbers, confirming the company's ability to adapt and thrive in the face of the pandemic. It looks set to resume its expansion and trades on very attractive valuations.

Prodia Widyahusada (PRDA IJ) saw its net profit increase by  +7.4% to IDR1,873.38bn, with revenues from each customer segment increasing and making a significant contribution.
Individual and referral customers from doctors made up 61.2% of revenues, whilst third-party referrals and corporate clients made up 38.8% of total revenues.
In 2020, the total number of tests reached 13.99m from 3.06m visits, with the demand for esoteric testing increasing by +191.5% YoY in 2020 to 1.6 million tests. Revenue from esoteric tests increased by +131.8% in 2020 to IDR700.3bn.
Prodia Widyahusada (PRDA IJ) continues to provide assistance to the government in dealing with the COVID-19 pandemic by providing tests for COVID-19 using the rapid test method, EIA antibody serology test, and PCR COVID-19,  and performing more than 1m COVID-19 tests in Indonesia in 2020.
Prodia Widyahusada (PRDA IJ) continues to expand the capacity for PCR COVID-19 examinations to more than 2,000 tests/day by adding the Cobas 6800 automatic testing tool.
Prodia Widyahusada (PRDA IJ) continues to add to its digital capabilities to aims to provide convenience for customers, without them having to visit the Prodia Lab through teleconsulting and the Prodia App. 
The company plans to expand its clinical labs, hospital labs, POC outlets, and add one specialty clinic in 2021, after a pause in 2020. Apart from growing its network of outlets, the company plans to upgrade its existing clinical labs to provide a greater array of tests.
Prodia Widyahusada (PRDA IJ) valuations are very attractive versus healthcare peers in Indonesia but also Indian diagnostic peers, which trade on significantly higher multiples.

Prodia Widyahusada (PRDA IJ) - Diagnosed as Resilient

Indonesia

Siloam International Hospitals is Indonesia's largest private hospital network, operating over 41 hospitals and numerous clinics across various provinces. The company offers an integrated healthcare ecosystem, providing comprehensive medical services including general and specialized treatments, emergency care, and health education, with centers of excellence in areas like oncology and neurosurgery. Headquartered in Tangerang, Indonesia, the company was founded on August 3, 1996.

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Siloam International Hospitals (SILO IJ)

Aneka Gas (AGII IJ) - Living and Breathing the Indonesian Economy

Aneka Gas provides exposure to medical gases but is also broadly exposed to Indonesia's broader economic recovery, through its exposure to industry...

Angus Mackintosh

Lippo Karawaci (LPKR IJ) - Affordable Luxury

Lippo Karawaci is an interesting proxy for Indonesian healthcare and property with its increased focus on its core residential business having...

Angus Mackintosh

Mitra Keluarga Karyasehat (MIKA IJ) - Occupancy and Profitability Rising

Mitra Keluarga (MIKA IJ) is probably the best quality listed hospital player in Indonesia, with good governance and throwing off the highest...

Angus Mackintosh

Siloam International Hospital (SILO IJ) - A Quickening Metabolism

Siloam Hospital's recent results demonstrate the management's ability not only to cope with COVID-19 and to benefit from it but also to adjust its...

Angus Mackintosh

Prodia Widyahusada (PRDA IJ) - Diagnosed as Resilient

Prodia remains one of our top healthcare picks in Indonesia, showing resilience during the pandemic, just releasing a strong set of numbers, and...

Angus Mackintosh

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