Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

<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. 

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

<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.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

Equity Capital Markets

<p>Indonesian e-commerce unicorn, <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> kickstarted the book building process for its US$ 1.3-1.5bn IPO on the Indonesia Stock Exchange on 9<sup>th</sup> July 2021. The offer period is from 28<sup>th</sup> July to 30<sup>th</sup> July 2021 while the listing date is expected to be 6<sup>th</sup> August 2021.</p>
<p>Bukalapak operates in an area of e-commerce that’s not being the target of most mainstream players, allowing the company to maintain robust revenue growth. However, the prospects of making money serving that segment look rather bleak due to the lower profitability of the local mom-and-pop kiosks (warung) market.</p>

Indonesian e-commerce unicorn, Bukalapak (BUKA IJ) kickstarted the book building process for its US$ 1.3-1.5bn IPO on the Indonesia Stock Exchange on 9th July 2021. The offer period is from 28th July to 30th July 2021 while the listing date is expected to be 6th August 2021.
Bukalapak operates in an area of e-commerce that’s not being the target of most mainstream players, allowing the company to maintain robust revenue growth. However, the prospects of making money serving that segment look rather bleak due to the lower profitability of the local mom-and-pop kiosks (warung) market.

Bukalapak IPO: Reaching Hard to Reach Areas but Prospects of Profitability Is Bleak

<p>If the US equity markets have <strong>stay-home</strong> names such as <a href="https://www.smartkarma.com/entities/peloton-interactive-inc" target="_blank" data-smartkarma-citation="entities:28014:1" rel="noopener">Peloton Interactive (PTON US)</a> and <a href="https://www.smartkarma.com/entities/zoom-technologies-inc" target="_blank" data-smartkarma-citation="entities:28002:1" rel="noopener">Zoom Technologies Inc (ZOOM US)</a> , Indonesia has <a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" data-smartkarma-citation="entities:18869:1" rel="noopener">Erajaya Swasembada (ERAA IJ)</a> as one of the stay home names besides the private internet behemoth such as <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/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> . </p>
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<p>source: Reuters</p>
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<p>The outperformance was apparent although, during this time, 300 stores were closed during the earlier lockdown (PSBB).  Erajaya has established various methods during the previous lockdown that will bring the in-store experience to the customers' homes, keeping the potential for upselling of higher-margin accessories products. </p>

If the US equity markets have stay-home names such as Peloton Interactive (PTON US) and Zoom Technologies Inc (ZOOM US) , Indonesia has Erajaya Swasembada (ERAA IJ) as one of the stay home names besides the private internet behemoth such as Tokopedia PT (1087142D IJ) and Gojek (1379371D IJ) . 


source: Reuters

The outperformance was apparent although, during this time, 300 stores were closed during the earlier lockdown (PSBB).  Erajaya has established various methods during the previous lockdown that will bring the in-store experience to the customers' homes, keeping the potential for upselling of higher-margin accessories products. 

Erajaya (ERAA): In-Store Experience to Your Home

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)

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

Bukalapak IPO: Reaching Hard to Reach Areas but Prospects of Profitability Is Bleak

At the proposed IPO price range, Bukalapak is trading at 41.9-47.6x 2020 EV/Sales, which is not cheap, especially for a company that may not be...

Oshadhi Kumarasiri

Erajaya (ERAA): In-Store Experience to Your Home

If US markets have stay-home names such as Peloton and Zoom, Indonesia has Erajaya Swasembada as one of the stay-home names besides the internet...

Henry Soediarko

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