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

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>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>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/216/533/original/image_71646866821625224195978.png?1625224195" class="editor-image img-responsive" data-smartkarma-image-id="216533"></figure>
<div class="content-remarks">
<p>source: Reuters</p>
</div>
<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

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

<p>A recent call with <a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> management revealed continuing momentum behind the recovery that began in 4Q2020 with growth is back on track and its digital strategy continuing to develop and bear fruit.</p>
<p>The company continues to roll out new stores this year with plans to open a total of 180 new stores. During 1Q2021, the company opened 39 stores and closed 52 underperforming stores. </p>
<p>Store openings are focused on sportswear under <a href="https://www.smartkarma.com/entities/map-aktif-adiperkasa-pt" target="_blank" data-smartkarma-citation="entities:27291:1" rel="noopener">MAP Aktif Adiperkasa PT (MAPA IJ)</a> and fashion, where <a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> plans to open 65 and 45 new stores respectively but it is also pushing its Apple reseller DigiMap and in addition plans to open a total of 10 Boots stores this year</p>
<div class="content-remarks"></div>
<p><a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> will also open six new Food Hall supermarket outlets this year, which currently has 33 branches.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"></figure>
</section>
<p><a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)'s</a> digital strategy remains very much intact and continues to grow through the company's MAP Club membership scheme which now has 3.8m active members. It has also moved to collaborate with a fintech on a pay-later installment scheme. </p>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> trades at a significant discount to its historical valuations and with strong forecast future growth, making it look attractive at these levels, especially in light of the impending recovery and its successful digital strategy. It remains a core proxy for the recovery in consumer spending in Indonesia, which is underway.</p>
</div>

A recent call with Mitra Adiperkasa (MAPI IJ) management revealed continuing momentum behind the recovery that began in 4Q2020 with growth is back on track and its digital strategy continuing to develop and bear fruit.
The company continues to roll out new stores this year with plans to open a total of 180 new stores. During 1Q2021, the company opened 39 stores and closed 52 underperforming stores. 
Store openings are focused on sportswear under MAP Aktif Adiperkasa PT (MAPA IJ) and fashion, where Mitra Adiperkasa (MAPI IJ) plans to open 65 and 45 new stores respectively but it is also pushing its Apple reseller DigiMap and in addition plans to open a total of 10 Boots stores this year

Mitra Adiperkasa (MAPI IJ) will also open six new Food Hall supermarket outlets this year, which currently has 33 branches.



Mitra Adiperkasa (MAPI IJ)'s digital strategy remains very much intact and continues to grow through the company's MAP Club membership scheme which now has 3.8m active members. It has also moved to collaborate with a fintech on a pay-later installment scheme. 

Mitra Adiperkasa (MAPI IJ) trades at a significant discount to its historical valuations and with strong forecast future growth, making it look attractive at these levels, especially in light of the impending recovery and its successful digital strategy. It remains a core proxy for the recovery in consumer spending in Indonesia, which is underway.


Mitra Adiperkasa (MAPI IJ) - Mercury Rising

Sarana Menara Nusantara / Equity Bottom-Up

<p>The accelerated digitalization in Indonesia excites many and can be seen with how much money has been thrown to the startups such as <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> , and <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 many would think that smartphone upgrade is the key factor to play this, therefore, buying smartphone retailer such as <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> or <a href="https://www.smartkarma.com/entities/trikomsel-oke-tbk-pt" target="_blank" data-smartkarma-citation="entities:4796:1" rel="noopener">Trikomsel Oke (TRIO IJ)</a> is the way to do it but telco tower such as <a href="https://www.smartkarma.com/entities/sarana-menara-nusantara-pt" target="_blank" data-smartkarma-citation="entities:6848:1" rel="noopener">Sarana Menara Nusantara (TOWR IJ)</a> provides growth with less volatility due to the long term, non-cancelable contract.</p>
<div class="content-highlight">
<p>The other fact is that the population per tower in Indonesia is still very high compared to other countries such as China and Japan although it is almost consistent with what they have in India. In order to optimize telco connectivity with the growing internet data demand, telco operators need to build more towers and <a href="https://www.smartkarma.com/entities/sarana-menara-nusantara-pt" target="_blank" data-smartkarma-citation="entities:6848:1" rel="noopener">Sarana Menara Nusantara (TOWR IJ)</a> is just the right player to do that. </p>
</div>

The accelerated digitalization in Indonesia excites many and can be seen with how much money has been thrown to the startups such as Gojek (1379371D IJ) , and Tokopedia PT (1087142D IJ), and many would think that smartphone upgrade is the key factor to play this, therefore, buying smartphone retailer such as Erajaya Swasembada (ERAA IJ) or Trikomsel Oke (TRIO IJ) is the way to do it but telco tower such as Sarana Menara Nusantara (TOWR IJ) provides growth with less volatility due to the long term, non-cancelable contract.

The other fact is that the population per tower in Indonesia is still very high compared to other countries such as China and Japan although it is almost consistent with what they have in India. In order to optimize telco connectivity with the growing internet data demand, telco operators need to build more towers and Sarana Menara Nusantara (TOWR IJ) is just the right player to do that. 


Sarana Menara Nusantara (TOWR): Data Hungry Provider

<section class="figure">
<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> just released a positive set of 1Q2021 results with revenue up +11.4% YoY and net profit up +26% YoY,  despite slower subscriber growth and the ongoing focus on pole migration</p>
</section>
<section class="figure">
<section class="figure">ARPU remained stable at IDR358,000 per subscriber per month versus IDR364,000 in FY2020 but the number was higher than 4Q2020, as the company ceased giving out ultra-low packages.  </section>
<section class="figure"></section>
</section>
<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> is also providing the option for customers to upgrade their packages through the My First Media app, which includes e-wallet payment options.plus conducting various promotional campaigns with major e-commerce players reducing acquisition costs.</p>
<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> has revised down the total cost of the migration to IDR2.5tn versus IDR3tn previously due to effective cost management and operational cost efficiencies. Enterprise business picking up</p>
<p>Now that investing in fixed broadband has no foreign ownership restrictions versus a 67% limit previously, <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> has become a more attractive acquisition target for a potential suitor.</p>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> remains a key proxy for the low penetration of fixed broadband in Indonesia and currently provided the highest quality in terms of download speeds and programming.</p>
<p><a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> remains attractive from a valuation standpoint trading on 13.2x FY2021E and FY2022E PER but it looks likely that we could see further earnings upgrades for FY2022E, given that the pole migration is scheduled to complete by May 2022. It is trading above its 5-year average forward PER of 12x but it has traded as high as 17x forward PER. </p>
</div>


Link Net (LINK IJ) just released a positive set of 1Q2021 results with revenue up +11.4% YoY and net profit up +26% YoY,  despite slower subscriber growth and the ongoing focus on pole migration


ARPU remained stable at IDR358,000 per subscriber per month versus IDR364,000 in FY2020 but the number was higher than 4Q2020, as the company ceased giving out ultra-low packages.  


Link Net (LINK IJ) is also providing the option for customers to upgrade their packages through the My First Media app, which includes e-wallet payment options.plus conducting various promotional campaigns with major e-commerce players reducing acquisition costs.
Link Net (LINK IJ) has revised down the total cost of the migration to IDR2.5tn versus IDR3tn previously due to effective cost management and operational cost efficiencies. Enterprise business picking up
Now that investing in fixed broadband has no foreign ownership restrictions versus a 67% limit previously, Link Net (LINK IJ) has become a more attractive acquisition target for a potential suitor.

Link Net (LINK IJ) remains a key proxy for the low penetration of fixed broadband in Indonesia and currently provided the highest quality in terms of download speeds and programming.
Link Net (LINK IJ) remains attractive from a valuation standpoint trading on 13.2x FY2021E and FY2022E PER but it looks likely that we could see further earnings upgrades for FY2022E, given that the pole migration is scheduled to complete by May 2022. It is trading above its 5-year average forward PER of 12x but it has traded as high as 17x forward PER. 


Link Net (LINK IJ) - Multiple Catalysts in Place

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Tokopedia PT (1087142D IJ)

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

Mitra Adiperkasa (MAPI IJ) - Mercury Rising

MAPI remains a core proxy for the recovery in consumer spending in Indonesia, which is well-underway, with an increasingly digital edge.

Angus Mackintosh

Sarana Menara Nusantara (TOWR): Data Hungry Provider

In order to optimize telco connectivity with the growing internet data demand, telco operators need to build more towers and Sarana Menara...

Henry Soediarko

Link Net (LINK IJ) - Multiple Catalysts in Place

Link Net (LINK IJ) is a high-quality proxy for the low penetration of fixed broadband in Indonesia, with its pole migration program a positive,...

Angus Mackintosh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)