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/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ)</a> released its results over the weekend for FY2020, which saw sales for the year falling by -31.4% YoY to IDR14.8tn. The company achieved a gross profit margin of 41.6%, an operating loss of IDR56.9bn, an EBITDA of IDR2.3tn, with an FY2020 net loss of IDR585bn.</p>
<p>The fall in sales reflected the impact of COVID-19 and the associated lockdowns. To offset this, the company focused on driving its sales online, which saw digital sales increase to 10.3% of revenues, an increase of +236% YoY.</p>
<p>On a more positive note, <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> saw its 4Q2020 sales increase by +35.6% QoQ versus 3Q2020, with its gross margin improvements and an operating profit of IDR357bn in 4Q2020 versus a loss of IDR113bn in 3Q2020. It also achieved a significant increase in EBITDA to IDR844bn versus IDR484bn in 3Q2020 plus a net profit of IDR87.2bn versus a net loss of IDR217bn on 3Q2020.</p>
<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> sales in 4Q2020 rose considerably in 4Q2020 due to the gradual re-opening of malls together with the impact of the company's Unified Retail Strategy centered around the company's MAP Club loyalty program, which already has 3.7m members.</p>
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<p>The company's sports and leisure subsidiary <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> saw an even more impressive performance in 4Q2020, with a +43.9% growth in net revenue in 4Q2020 versus 3Q2020.</p>
<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> remains one of our top picks to play the gradual recovery in consumer spending and increased mobility, which will help support the recovery in offline channels. At the same time, the company has adjusted through its Unified Retail Strategy to selling more through digital channels, which will continue to underpin future growth given the rapid shift in consumption habits to online channels.</p>
<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 on 22x FY21E per and 13.9x FY22E PER, as the company moved back to profit in FY21E and is forecast to grow EPS by +58% YoY FY22E. <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> 5-year average forward PER stands at 21x, making the company look attractive at these levels. </p>
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Mitra Adiperkasa (MAPI IJ) released its results over the weekend for FY2020, which saw sales for the year falling by -31.4% YoY to IDR14.8tn. The company achieved a gross profit margin of 41.6%, an operating loss of IDR56.9bn, an EBITDA of IDR2.3tn, with an FY2020 net loss of IDR585bn.
The fall in sales reflected the impact of COVID-19 and the associated lockdowns. To offset this, the company focused on driving its sales online, which saw digital sales increase to 10.3% of revenues, an increase of +236% YoY.
On a more positive note, Mitra Adiperkasa (MAPI IJ) saw its 4Q2020 sales increase by +35.6% QoQ versus 3Q2020, with its gross margin improvements and an operating profit of IDR357bn in 4Q2020 versus a loss of IDR113bn in 3Q2020. It also achieved a significant increase in EBITDA to IDR844bn versus IDR484bn in 3Q2020 plus a net profit of IDR87.2bn versus a net loss of IDR217bn on 3Q2020.
Mitra Adiperkasa (MAPI IJ) sales in 4Q2020 rose considerably in 4Q2020 due to the gradual re-opening of malls together with the impact of the company's Unified Retail Strategy centered around the company's MAP Club loyalty program, which already has 3.7m members.


The company's sports and leisure subsidiary MAP Aktif Adiperkasa PT (MAPA IJ) saw an even more impressive performance in 4Q2020, with a +43.9% growth in net revenue in 4Q2020 versus 3Q2020.
Mitra Adiperkasa (MAPI IJ) remains one of our top picks to play the gradual recovery in consumer spending and increased mobility, which will help support the recovery in offline channels. At the same time, the company has adjusted through its Unified Retail Strategy to selling more through digital channels, which will continue to underpin future growth given the rapid shift in consumption habits to online channels.
Mitra Adiperkasa (MAPI IJ) trades on 22x FY21E per and 13.9x FY22E PER, as the company moved back to profit in FY21E and is forecast to grow EPS by +58% YoY FY22E. Mitra Adiperkasa (MAPI IJ) 5-year average forward PER stands at 21x, making the company look attractive at these levels. 


Mitra Adiperkasa (MAPI IJ) - Shape-Shifting to Back in Black

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<p>Indonesia's leading transportation and logistics company,<a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" rel="noopener"> Adi Sarana Armada (ASSA IJ)</a> posted an increase in revenue of over +30% to IDR 3.04tn in 2020. The growth in the company's revenue was supported by the stable performance from all of its business segments but driven by its core car rental business under ASSA rent together with its last-mile courier service, Anteraja.  The company booked a -21% decline in net income in 2020 but we expect profit to see strong growth in the next two years as Anteraja has now broken even.</p>
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<p>Anteraja recorded a significant increase in revenue performance of +842.0% For FY2020, making up around a quarter of<a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" rel="noopener"> Adi Sarana Armada (ASSA IJ)</a> 's total revenue versus only 3.5% of sales in 2019. Management predicts that Anteraja should make up over 50% of sales in the next 1-2 years and it has already broken even, which should also make it an important future profit driver. </p>
<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> has also been developing a number of new initiatives including a car-sharing platform called ShareCar, an online C2C car sales marketplace called Caroline, and a warehouse fulfillment business through Titipaja.</p>
<p>It continues to grow its car rental business and will expand its fleet further in 2021, with an expected recovery in the private sector but also increasing growth in demand from the government.</p>
<p>Its car auction business under JBA Bid Win also saw strong growth in 2020, with strong growth in the second-hand car market. </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> remains an interesting digital transformation story, with huge potential from Anterja to drive future growth but with a stable revenue base coming from its car rental and auction business. It 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 digital growth story. </p>


Indonesia's leading transportation and logistics company, Adi Sarana Armada (ASSA IJ) posted an increase in revenue of over +30% to IDR 3.04tn in 2020. The growth in the company's revenue was supported by the stable performance from all of its business segments but driven by its core car rental business under ASSA rent together with its last-mile courier service, Anteraja.  The company booked a -21% decline in net income in 2020 but we expect profit to see strong growth in the next two years as Anteraja has now broken even.

Anteraja recorded a significant increase in revenue performance of +842.0% For FY2020, making up around a quarter of Adi Sarana Armada (ASSA IJ) 's total revenue versus only 3.5% of sales in 2019. Management predicts that Anteraja should make up over 50% of sales in the next 1-2 years and it has already broken even, which should also make it an important future profit driver. 
Adi Sarana Armada (ASSA IJ) has also been developing a number of new initiatives including a car-sharing platform called ShareCar, an online C2C car sales marketplace called Caroline, and a warehouse fulfillment business through Titipaja.
It continues to grow its car rental business and will expand its fleet further in 2021, with an expected recovery in the private sector but also increasing growth in demand from the government.
Its car auction business under JBA Bid Win also saw strong growth in 2020, with strong growth in the second-hand car market. 
Adi Sarana Armada (ASSA IJ) remains an interesting digital transformation story, with huge potential from Anterja to drive future growth but with a stable revenue base coming from its car rental and auction business. It 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 digital growth story. 

Adi Sarana Armada (ASSA IJ) - All Aboard for a Digital Ride

Private Capital Markets

<p>It looks increasingly likely that <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> will bite the bullet and forge ahead with a SPAC listing through Altimeter Capital, with a slated valuation of US$35bn, making it the first South-East Asian Unicorn to list apart from <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> of course. This would be the largest SPAC listing to date. </p>
<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a>'s apparent rush to market probably comes with active encouragement from Softbank after its failed attempt to merge with competitor <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a>.</p>
<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> is looking increasingly vulnerable since the announcement that Gojek will merge with <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a>, creating a much more formidable rival with a strong e-commerce business and a lead in digital payments and finance.</p>
<p>The recent entry of ShopeeFood into the food delivery space in Indonesia is also more of a threat to Grab versus Gojek, given the discounts and free deliveries ShopeeFood is offering. </p>
<p>Using available public information and peer group we look at whether these valuations can be justified for the <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> SPAC listing. </p>

It looks increasingly likely that Grab (0967655D SP) will bite the bullet and forge ahead with a SPAC listing through Altimeter Capital, with a slated valuation of US$35bn, making it the first South-East Asian Unicorn to list apart from Sea Ltd (SE US) of course. This would be the largest SPAC listing to date. 
Grab (0967655D SP)'s apparent rush to market probably comes with active encouragement from Softbank after its failed attempt to merge with competitor Gojek (1379371D IJ).
Grab (0967655D SP) is looking increasingly vulnerable since the announcement that Gojek will merge with Tokopedia PT (1087142D IJ), creating a much more formidable rival with a strong e-commerce business and a lead in digital payments and finance.
The recent entry of ShopeeFood into the food delivery space in Indonesia is also more of a threat to Grab versus Gojek, given the discounts and free deliveries ShopeeFood is offering. 
Using available public information and peer group we look at whether these valuations can be justified for the Grab SPAC listing. 

Grab - Biting the Bullet with a SPAC Listing?

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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> continues to see improvements not just for its core car rental business but also for rapid momentum behind its move into the last mile through Anteraja, which looks set to account for more than 50% of revenues over the next 1-2 years and it has already broken even, earlier than expected.</p>
<p>A Webinar we hosted on Smartkarma with senior management revealed a positive outlook for the business on a number of fronts.</p>
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<p>Despite the impact of the pandemic, the company's car rental business under ASSA Rent saw very little fall out from the COVID-19 pandemic, with the overall fleet increasing by +1% last year and the company has also increased its team of drivers.</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> has also developed a car-sharing App to help to better utilize the fleet, where cars are booked by individuals from its corporate clients.</p>
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<p>ASSA rent will increase the fleet further in 2021 by around +10% to cater for higher demand from government departments, as well as the economic recovery in the coming year. </p>
<p>The company's B2B used car auction business under JBA BidWin Auction had a very strong year in 2020, with volume growth of +30%.</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> also has a C2C car marketplace called Caroline, which deals with individuals for new and used cars, with financing as an option. </p>
<p>The backbone of the company's third pillar of business is ASSA logistics, which provides fleet management services, trip management, and delivery systems for its corporate customers. </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>'s last-mile subsidiary is called Anteraja is the real future growth driver for the company with 300 service points in 34 provinces.  Anteraja partners with all the major e-commerce players but is also seeking to enlarge other segments such as B2B, C2C, and Social Commerce. </p>
<p>In 2020, Anteraja delivered 50m packages recording positive growth in its second year of operation by booking 300,000 packages per day on average by the end of 2020, allowing Anteraja to breakeven by the end of the year. </p>
<p>Anteraja has also launched a number of new initiatives including Bisnisaja, Travylite, and Titipaja, a self-developed e-fulfillment service</p>
<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> takes a positive view on the outlook for this year with positive expectations for revenue growth overall but with the real growth momentum coming from Anteraja.  It trades on 42.2x and 24.4x FY21E and FY22E PER respectively but should be viewed as a transformational growth story crossing into the digital ecosystem, with even higher growth potential in FY2022 according to management. </section>
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Adi Sarana Armada (ASSA IJ) continues to see improvements not just for its core car rental business but also for rapid momentum behind its move into the last mile through Anteraja, which looks set to account for more than 50% of revenues over the next 1-2 years and it has already broken even, earlier than expected.
A Webinar we hosted on Smartkarma with senior management revealed a positive outlook for the business on a number of fronts.

Despite the impact of the pandemic, the company's car rental business under ASSA Rent saw very little fall out from the COVID-19 pandemic, with the overall fleet increasing by +1% last year and the company has also increased its team of drivers.
Adi Sarana Armada (ASSA IJ) has also developed a car-sharing App to help to better utilize the fleet, where cars are booked by individuals from its corporate clients.



ASSA rent will increase the fleet further in 2021 by around +10% to cater for higher demand from government departments, as well as the economic recovery in the coming year. 
The company's B2B used car auction business under JBA BidWin Auction had a very strong year in 2020, with volume growth of +30%.
Adi Sarana Armada (ASSA IJ) also has a C2C car marketplace called Caroline, which deals with individuals for new and used cars, with financing as an option. 
The backbone of the company's third pillar of business is ASSA logistics, which provides fleet management services, trip management, and delivery systems for its corporate customers. 
Adi Sarana Armada (ASSA IJ)'s last-mile subsidiary is called Anteraja is the real future growth driver for the company with 300 service points in 34 provinces.  Anteraja partners with all the major e-commerce players but is also seeking to enlarge other segments such as B2B, C2C, and Social Commerce. 
In 2020, Anteraja delivered 50m packages recording positive growth in its second year of operation by booking 300,000 packages per day on average by the end of 2020, allowing Anteraja to breakeven by the end of the year. 
Anteraja has also launched a number of new initiatives including Bisnisaja, Travylite, and Titipaja, a self-developed e-fulfillment service
Adi Sarana Armada (ASSA IJ) takes a positive view on the outlook for this year with positive expectations for revenue growth overall but with the real growth momentum coming from Anteraja.  It trades on 42.2x and 24.4x FY21E and FY22E PER respectively but should be viewed as a transformational growth story crossing into the digital ecosystem, with even higher growth potential in FY2022 according to management. 












Adi Sarana Armada (ASSA IJ) - To the Last Mile and Beyond

Telco/Internet specialist

Kirk Boodry

Redex Research

<p>Coupang’s monster IPO is very likely to be the highlight of Vision Fund 1 and provides a solid counterpoint to the WeWork debacle early in the IPO cycle but there remains a significant number of portfolio companies still to come. At Q3 results, Softbank talked about an ongoing parade of companies coming to market with 10-15 annual events but there is a push to get companies to list whilst markets are still receptive and FY21 could see up to 20 companies hit public markets.</p><p>That is positive for Softbank shares which tend to rise in anticipation of surfaced value, again assuming the IPO market remains open. It also serves to highlight the main risk for Softbank shares as a sustained tech sell-off would lower the value of the Vision Fund portfolio, increase concerns about Northstar and lower expectations for the current crop of IPO hopefuls.</p><h2><strong>Highlights</strong></h2><p><strong>Softbank Vision Fund could see up to 20 companies hitting public markets 2021 should favorable conditions continue. </strong>Vision Fund says it is encouraging companies to go public whilst conditions are still receptive and Q4 (Mar) can already boast of two listings, a SPAC merger and two more listings in process. Leading candidates to go public include Didi Chuxing and Grab</p><p><strong>Coupang upside alone doubles total returns and will boost Vision Fund to its best quarter ever.  </strong>As of mid-March, Vision Fund’s public portfolio is up $27bn versus $13bn in Q2, $8bn in Q2 and $2bn in Q1. On the aggregate, it more than doubles the Vision Fund total return </p><p><strong>There may upside in the private portfolio too as Cruise raised funds in January at a 58% premium</strong>. It is usually a mug’s game trying to figure out where private valuations will end up but the Cruise stake is large enough to outweigh a lot of smaller changes for other portfolio companies. Cruise raised $2bn in January at a $30bn valuation, a 58% premium to where Softbank invested and a possible $1.3bn unrealized gain ($2.25bn &gt; $3.55bn)</p><p><strong>Portfolio company View went public through a SPAC merger but at an apparent loss for Vision Fund</strong>.  Smart glass maker View’s SPAC merger closed 9 March, the day before the Coupang IPO but it appears Softbank’s original $1.1bn investment is worth barely half that. That is a fraction of the Coupang upside but is a reminder that valuations can go both ways. Other problem investments include Greensill, Katerra, Oyo and OakNorth</p>

Coupang’s monster IPO is very likely to be the highlight of Vision Fund 1 and provides a solid counterpoint to the WeWork debacle early in the IPO cycle but there remains a significant number of portfolio companies still to come. At Q3 results, Softbank talked about an ongoing parade of companies coming to market with 10-15 annual events but there is a push to get companies to list whilst markets are still receptive and FY21 could see up to 20 companies hit public markets.That is positive for Softbank shares which tend to rise in anticipation of surfaced value, again assuming the IPO market remains open. It also serves to highlight the main risk for Softbank shares as a sustained tech sell-off would lower the value of the Vision Fund portfolio, increase concerns about Northstar and lower expectations for the current crop of IPO hopefuls.HighlightsSoftbank Vision Fund could see up to 20 companies hitting public markets 2021 should favorable conditions continue. Vision Fund says it is encouraging companies to go public whilst conditions are still receptive and Q4 (Mar) can already boast of two listings, a SPAC merger and two more listings in process. Leading candidates to go public include Didi Chuxing and GrabCoupang upside alone doubles total returns and will boost Vision Fund to its best quarter ever.  As of mid-March, Vision Fund’s public portfolio is up $27bn versus $13bn in Q2, $8bn in Q2 and $2bn in Q1. On the aggregate, it more than doubles the Vision Fund total return There may upside in the private portfolio too as Cruise raised funds in January at a 58% premium. It is usually a mug’s game trying to figure out where private valuations will end up but the Cruise stake is large enough to outweigh a lot of smaller changes for other portfolio companies. Cruise raised $2bn in January at a $30bn valuation, a 58% premium to where Softbank invested and a possible $1.3bn unrealized gain ($2.25bn &gt; $3.55bn)Portfolio company View went public through a SPAC merger but at an apparent loss for Vision Fund.  Smart glass maker View’s SPAC merger closed 9 March, the day before the Coupang IPO but it appears Softbank’s original $1.1bn investment is worth barely half that. That is a fraction of the Coupang upside but is a reminder that valuations can go both ways. Other problem investments include Greensill, Katerra, Oyo and OakNorth

Softbank Group - Vision Fund’s Race to Liquidity

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)

Mitra Adiperkasa (MAPI IJ) - Shape-Shifting to Back in Black

MAPI remains one of our top picks for the gradual recovery in consumption in Indonesia. It has successfully shifted a large portion of sales to...

Angus Mackintosh

Adi Sarana Armada (ASSA IJ) - All Aboard for a Digital Ride

ASSA continues to demonstrate its ability to transform from a car leasing company into a transport and logistics operator with increasing exposure...

Angus Mackintosh

Grab - Biting the Bullet with a SPAC Listing?

A SPAC listing for Grab is a quick path to market, which given potential risk factors ahead may be opportune timing wise

Angus Mackintosh

Adi Sarana Armada (ASSA IJ) - To the Last Mile and Beyond

ASSA saw growth in its car rental business despite the pandemic but its last-mile delivery business Anteraja is what will drive the long-term...

Angus Mackintosh

Softbank Group - Vision Fund’s Race to Liquidity

Vision Fund is pushing portfolio companies to go public (up to 20 this year!) which should help the discount but also depends a lot on how tech...

Kirk Boodry

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