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

Aspirasi Hidup Indonesia / Equity Bottom-Up

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<p><a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> released 1H2021 last week with sales down by -7.0% YoY and operating profits by -27.6% YoY, while net profit fell by -21.3% YoY. Obviously, 1Q2020 represented partial a high-base given that the pandemic had not yet impacted Indonesia in a big way.</p>
<p>The company saw sales in Jakarta affected most by the pandemic, with Java ex-Jakarta increased its share of sales and stores outside Java also increasing share of the total.</p>
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<section class="figure"><a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> continued to expand its stores in 1H2021 despite the pandemic.  The fact that  a large portion of stores are in malls has meant that it has been heavily impacted by the recent Emergency PPKM measures, which is not yet reflected in these numbers. </section>
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<section class="figure">The most recent round of Emergency PPKM measures has seen 155 stores closed in July, which remain closed in August. The company has managed to shift some of its sales online but this is still small.</section>
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<p><a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> continued to grow its members under its Ace Reward scheme, with member sales now accounting for 73.1% of total sales in 1H2021. Members spend significantly more than the average ticket size.</p>
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<p><a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a> recently released predictably weak SSSG numbers for July, which saw a -50.7% decline YoY reflecting the imposition of Emergency PPKM mobility restrictions versus a more open environment last year. We would expect a gradual recovery in September, as PPKM measures are relaxed further. </p>
<p>The company trades on 30.1x FY21E PER and 23.0x FY22E PER, with forecast EPS growth of +13.7% and +30.7% for FY21E and FY22E respectively, making it look attractive versus its 5-year average forward PER of 25.0x </p>
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Ace Hardware Indonesia (ACES IJ) released 1H2021 last week with sales down by -7.0% YoY and operating profits by -27.6% YoY, while net profit fell by -21.3% YoY. Obviously, 1Q2020 represented partial a high-base given that the pandemic had not yet impacted Indonesia in a big way.
The company saw sales in Jakarta affected most by the pandemic, with Java ex-Jakarta increased its share of sales and stores outside Java also increasing share of the total.

Ace Hardware Indonesia (ACES IJ) continued to expand its stores in 1H2021 despite the pandemic.  The fact that  a large portion of stores are in malls has meant that it has been heavily impacted by the recent Emergency PPKM measures, which is not yet reflected in these numbers. 




The most recent round of Emergency PPKM measures has seen 155 stores closed in July, which remain closed in August. The company has managed to shift some of its sales online but this is still small.


Ace Hardware Indonesia (ACES IJ) continued to grow its members under its Ace Reward scheme, with member sales now accounting for 73.1% of total sales in 1H2021. Members spend significantly more than the average ticket size.

Ace Hardware Indonesia (ACES IJ) recently released predictably weak SSSG numbers for July, which saw a -50.7% decline YoY reflecting the imposition of Emergency PPKM mobility restrictions versus a more open environment last year. We would expect a gradual recovery in September, as PPKM measures are relaxed further. 
The company trades on 30.1x FY21E PER and 23.0x FY22E PER, with forecast EPS growth of +13.7% and +30.7% for FY21E and FY22E respectively, making it look attractive versus its 5-year average forward PER of 25.0x 


Ace Hardware Indonesia (ACES IJ) - Summer Lull

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

<p><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a>, which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. Bukalapak carries out its main business activities through the mobile platform <em>Bukalapak</em> and <em>Bukalapak Partners</em>. Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand, according to press reports. Bookbuilding will close on 19 July and the shares are set to list on 6 August. </p><p>The COVID-19 pandemic has accelerated the rate of e-commerce adoption in Indonesia as more consumers are reluctant to travel and started changing their shopping habits to online shopping, due to personal preferences or lockdown restrictions. The share of e-commerce of total retail spending in Indonesia has grown from 5.6% in 2017 to around 22% in 2020 and will reach 35.9% in 2025, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>Like its peers, Bukalapak is benefiting from this market tailwind. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s Shopee, <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>'s Lazada. Competitors generally target the affluent segment of the market. Overall, Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. We will discuss valuation in our next note. </p></div>

Bukalapak (BUKA IJ), which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. Bukalapak carries out its main business activities through the mobile platform Bukalapak and Bukalapak Partners. Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand, according to press reports. Bookbuilding will close on 19 July and the shares are set to list on 6 August. The COVID-19 pandemic has accelerated the rate of e-commerce adoption in Indonesia as more consumers are reluctant to travel and started changing their shopping habits to online shopping, due to personal preferences or lockdown restrictions. The share of e-commerce of total retail spending in Indonesia has grown from 5.6% in 2017 to around 22% in 2020 and will reach 35.9% in 2025, according to Frost &amp; Sullivan. Like its peers, Bukalapak is benefiting from this market tailwind. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as Sea Ltd (SE US)'s Shopee, Tokopedia PT (1087142D IJ) and Alibaba Group (BABA US)'s Lazada. Competitors generally target the affluent segment of the market. Overall, Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. We will discuss valuation in our next note. 

Bukalapak IPO Initiation: Island Shopping

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

<p>With the ever-increasing COVID-19 cases in Indonesia, combined with the slow action to inoculate the citizens either due to the lack of vaccines supply or due to public distrust of the vaccine or COVID-19 itself, demand for medication is at an all-time high. Amid the ongoing “second wave” of COVID-19, some people have started taking it upon themselves to fend off the ever-looming threat of the coronavirus with unproven do-it-yourself (DIY) remedies and self-medication tips spreading rampantly on social media platforms, such as WhatsApp and Facebook, creating extra demand for a legitimate medicine sold in a licensed pharmacy.</p><p>The YTD share price weakness and the recent knee jerk reaction from the delay of paid vaccination drive provides a better entry point for investors as the Indonesian government just released a rule to permit certain COVID-19 medications to be sold in licensed pharmacies in Indonesia and <a href="https://www.smartkarma.com/entities/kimia-farma-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:8524:1" rel="noopener">Kimia Farma Persero (KAEF IJ)</a> is the only listed SOE pharmacy in Indonesia with more than 1000 outlets across the country. </p>

With the ever-increasing COVID-19 cases in Indonesia, combined with the slow action to inoculate the citizens either due to the lack of vaccines supply or due to public distrust of the vaccine or COVID-19 itself, demand for medication is at an all-time high. Amid the ongoing “second wave” of COVID-19, some people have started taking it upon themselves to fend off the ever-looming threat of the coronavirus with unproven do-it-yourself (DIY) remedies and self-medication tips spreading rampantly on social media platforms, such as WhatsApp and Facebook, creating extra demand for a legitimate medicine sold in a licensed pharmacy.The YTD share price weakness and the recent knee jerk reaction from the delay of paid vaccination drive provides a better entry point for investors as the Indonesian government just released a rule to permit certain COVID-19 medications to be sold in licensed pharmacies in Indonesia and Kimia Farma Persero (KAEF IJ) is the only listed SOE pharmacy in Indonesia with more than 1000 outlets across the country. 

<p><a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia (BBNI IJ)</a> held an analyst call late last week to outline the bank's already well-developed digital strategy both wholesale and retail plus what really makes it stand out from competitors and what the future holds.</p>
<p>The bank has just launched the newest version of its BNI App which also commemorates the bank's 75th Anniversary and gets a high rating. <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia (BBNI IJ)</a>'s strategy on its ongoing digital transformation has been to embrace the new wave of digital disruption through collaboration with third parties rather than going it alone.</p>
<p><a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> works with leading P2P lenders such as Kredivo, Amartha, and Investree, as well as the major digital payments actors such as GoPay, OVO, and Dana. </p>
<p><a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener"></a>BBNI bases its service on its good use case for its customers rather than burning money to acquire new customers. </p>
<p>The bank is also leveraging its open API providing services for digital players and as a result, now offers 260 different services through its app with more than 3,000 partners, the most compared to any of its peers in Indonesia. </p>
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<p><a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia  (BBNI IJ)</a> is linked with many different e-commerce and Fintech companies helping to facilitate payments, collections, providing liquidity, and providing audits, as examples of some services. </p>
<p>The app is also very popular with younger customers with Gen x at 21% of users, Millennials 43%, and Gen C at 33% making up a large portion of tye 8.9m users.</p>
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<p><a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia (BBNI IJ)</a>'s increasing integration with Indonesia's digital economy also stands it in good stead to benefit from the vibrant growth from the space. The bank's progression in building its digital capabilities and its integration with the Indonesian digital economy is not yet fully appreciated, with the bank trading on 0.7x FY21E PBV.</p>
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Bank Negara Indonesia (BBNI IJ) held an analyst call late last week to outline the bank's already well-developed digital strategy both wholesale and retail plus what really makes it stand out from competitors and what the future holds.
The bank has just launched the newest version of its BNI App which also commemorates the bank's 75th Anniversary and gets a high rating. Bank Negara Indonesia (BBNI IJ)'s strategy on its ongoing digital transformation has been to embrace the new wave of digital disruption through collaboration with third parties rather than going it alone.
Bank Negara Indonesia Persero (BBNI IJ) works with leading P2P lenders such as Kredivo, Amartha, and Investree, as well as the major digital payments actors such as GoPay, OVO, and Dana. 
BBNI bases its service on its good use case for its customers rather than burning money to acquire new customers. 
The bank is also leveraging its open API providing services for digital players and as a result, now offers 260 different services through its app with more than 3,000 partners, the most compared to any of its peers in Indonesia. 

Bank Negara Indonesia  (BBNI IJ) is linked with many different e-commerce and Fintech companies helping to facilitate payments, collections, providing liquidity, and providing audits, as examples of some services. 
The app is also very popular with younger customers with Gen x at 21% of users, Millennials 43%, and Gen C at 33% making up a large portion of tye 8.9m users.

Bank Negara Indonesia (BBNI IJ)'s increasing integration with Indonesia's digital economy also stands it in good stead to benefit from the vibrant growth from the space. The bank's progression in building its digital capabilities and its integration with the Indonesian digital economy is not yet fully appreciated, with the bank trading on 0.7x FY21E PBV.





Bank Negara Indonesia (BBNI IJ) - Digitally Remastered in Style

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<p>A rare post-results call with leading Indonesian consumer staples company <strong><a href="https://www.smartkarma.com/entities/mayora-indah-pt" target="_blank" data-smartkarma-citation="entities:15131:1" rel="noopener">Mayora Indah (MYOR IJ)</a></strong> management revealed a company well-positioned to take advantage of the recovery in 2H2021, with a good number of new products launches likely to help drive growth both domestically and overseas.</p>
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<p>Rising commodity prices are a potential threat to margins but management has outlined a number of strategies to cope with this including price increases.</p>
<p><a href="https://www.smartkarma.com/entities/mayora-indah-pt" target="_blank" data-smartkarma-citation="entities:15131:1" rel="noopener">Mayora Indah (MYOR IJ)</a> saw strong growth in sales and operating profits reflecting the strength of the recovery domestically and especially in the export of its products. </p>
<p>The company continues to gain market share in a number of categories and especially in biscuits, wafers, and coffee. It continues to broaden the range of products available in export markets such as the Philippines and Thailand.</p>
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<section class="figure"><a href="https://www.smartkarma.com/entities/mayora-indah-pt" target="_blank" data-smartkarma-citation="entities:15131:1" rel="noopener">Mayora Indah (MYOR IJ)</a>'s valuations look attractive versus history with the company trading on 19.6x FY21E PER and 17.2x FY22E PER versus its 5-year average forward PER of 27x.</section>


A rare post-results call with leading Indonesian consumer staples company Mayora Indah (MYOR IJ) management revealed a company well-positioned to take advantage of the recovery in 2H2021, with a good number of new products launches likely to help drive growth both domestically and overseas.

Rising commodity prices are a potential threat to margins but management has outlined a number of strategies to cope with this including price increases.
Mayora Indah (MYOR IJ) saw strong growth in sales and operating profits reflecting the strength of the recovery domestically and especially in the export of its products. 
The company continues to gain market share in a number of categories and especially in biscuits, wafers, and coffee. It continues to broaden the range of products available in export markets such as the Philippines and Thailand.

Mayora Indah (MYOR IJ)'s valuations look attractive versus history with the company trading on 19.6x FY21E PER and 17.2x FY22E PER versus its 5-year average forward PER of 27x.

Indonesia

Tokopedia PT provides e-commerce services. The Company owns and operates an online e-commerce platform that allows individuals and small-to-mid-sized business owners to start their online stores.

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Tokopedia PT (1087142D IJ)

Ace Hardware Indonesia (ACES IJ) - Summer Lull

Ace Hardware has seen sales hard hit by recent mobility measures and mall closures in Indonesia but we expect a strong recovery from September and...

Angus Mackintosh

Bukalapak IPO Initiation: Island Shopping

Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand. Its fundamentals tick all the right boxes of rising...

Arun George

Kimia Farma (KAEF): Legitimate Pharmacy

ID government just released a rule to permit certain COVID-19 medications to be sold in pharmacies in Indonesia and Kimia Farma is the only listed...

Henry Soediarko

Bank Negara Indonesia (BBNI IJ) - Digitally Remastered in Style

Bank Negara Indonesia's increasing integration with Indonesia's digital economy stands it in good stead to benefit from the vibrant growth from the...

Angus Mackintosh

Mayora Indah (MYOR IJ) - Lovely Biscuits

Mayora Indah (MYOR IJ) is one of the best quality consumer companies in Indonesia leading in categories such as biscuits, candies, cereal, and...

Angus Mackintosh

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