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

<a href="https://www.smartkarma.com/entities/11506" target="_blank" data-smartkarma-citation="entities:11506:1">Hanon Systems (018880 KS)</a> share price has outperformed its peers in the past 12 months and still command a valuation premium to its peers. In this report, we will discuss the following:<ul>
<li>1Q 2019 update</li>
<li>A look into its largest customers to date - <a href="https://www.smartkarma.com/entities/155" target="_blank" data-smartkarma-citation="entities:155:1">Hyundai Motor Co (005380 KS)</a>, how its market share in China has dwindled in the past few years.</li>
<li>
Diversification effort - the company has recently launched a customer diversification effort in its new business</li>
<li>Is it really Overvalued? We'll compare Hanon with its bigger, more profitable and higher inventory peers to see whether overvaluation is justifiable. </li>
</ul>

Hanon Systems (018880 KS) share price has outperformed its peers in the past 12 months and still command a valuation premium to its peers. In this report, we will discuss the following:
1Q 2019 update
A look into its largest customers to date - Hyundai Motor Co (005380 KS), how its market share in China has dwindled in the past few years.

Diversification effort - the company has recently launched a customer diversification effort in its new business
Is it really Overvalued? We'll compare Hanon with its bigger, more profitable and higher inventory peers to see whether overvaluation is justifiable. 


Hanon Systems (018880): Thesis Is Still Valid - Short.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Our positive outlook on global equities (both the MSCI ACWI and ACWI ex-US) remains intact and we believe a “buy the dip” strategy is warranted. We recommend taking advantage of recent weakness -- where applicable -- by adding exposure to cyclical Sectors. Today’s recommendations focus on autos, auto parts, and machinery which span the Consumer Discretionary and Manufacturing Sectors.

Our positive outlook on global equities (both the MSCI ACWI and ACWI ex-US) remains intact and we believe a “buy the dip” strategy is warranted. We recommend taking advantage of recent weakness -- where applicable -- by adding exposure to cyclical Sectors. Today’s recommendations focus on autos, auto parts, and machinery which span the Consumer Discretionary and Manufacturing Sectors. 

Global Equity Strategy: Overweight Cyclicals

The recent negative sales in the Chinese auto industry and Nissan's case of Carlos Ghosn removal could put additional pressure on the already thin margin of auto supplier industry. One of the Carlos Ghosn early contribution to Nissan was to cut cost and outsource the auto parts maker to a wide variety of suppliers including to <a href="https://www.smartkarma.com/entities/11506" target="_blank" data-smartkarma-citation="entities:11506:1">Hanon Systems (018880 KS)</a> . Nissan's new management may want to undo some of Carlos Ghosn' legacy including changing the selection criteria of parts supplier.Hanon's global peers also experienced a decrease in the inventory turnover and most of them have been priced at PER &lt;10 but Hanon is still trading at 24x PER while its sales growth and profitability is still in low single digit? Facing the onset of the slowdown in the Chinese auto industry, won't it be another headwind for Hanon Systems?

The recent negative sales in the Chinese auto industry and Nissan's case of Carlos Ghosn removal could put additional pressure on the already thin margin of auto supplier industry. One of the Carlos Ghosn early contribution to Nissan was to cut cost and outsource the auto parts maker to a wide variety of suppliers including to Hanon Systems (018880 KS) . Nissan's new management may want to undo some of Carlos Ghosn' legacy including changing the selection criteria of parts supplier.Hanon's global peers also experienced a decrease in the inventory turnover and most of them have been priced at PER &lt;10 but Hanon is still trading at 24x PER while its sales growth and profitability is still in low single digit? Facing the onset of the slowdown in the Chinese auto industry, won't it be another headwind for Hanon Systems?

Hanon Systems (018880): Overvalued Stocks in The Low Margin Sector

Equity Analyst, LightStream Research

Chacko Jacob

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.

Thematic (Sector/Industry)

Last week we attended the preview of the 2017 Tokyo Motor Show at Tokyo Big Sight. With no more than 20,000 attendees gathered at the venue that day, we were able to get a first-hand experience of a number of technologies on display. Without question, we were impressed by the wide variety of concepts that were showcased but the ones that we decided to take a deeper look at were what we considered more practical and ready for mass production.<a href="https://www.smartkarma.com/entities/10662" target="_blank" data-smartkarma-citation="entities:10662:1">Motherson Sumi Systems Ltd (MSS IN)</a> staff were eager to…

Last week we attended the preview of the 2017 Tokyo Motor Show at Tokyo Big Sight. With no more than 20,000 attendees gathered at the venue that day, we were able to get a first-hand experience of a number of technologies on display. Without question, we were impressed by the wide variety of concepts that were showcased but the ones that we decided to take a deeper look at were what we considered more practical and ready for mass production.Motherson Sumi Systems Ltd (MSS IN) staff were eager to…

Tokyo Motor Show: Digital Mirrors on Next-Gen Concept Cars Prove Motherson Sumi Is on Right Track

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

<ul><li><a href="https://www.smartkarma.com/entities/1414" target="_blank" data-smartkarma-citation="entities:1414:1">Frencken Group Ltd (FRKN SP)</a> is a global precision engineering company</li><li>Key divisions are Mechatronics and IMS which sell products into automotive and semiconductor industries</li><li>New Executive Director appointed in 2016 who brings big-company experience </li><li>2018 order book indications strong which should re-rate company in-line with peers</li><li>Frencken trades at 7.5x 2018 PE and 0.8x book with 4% dividend yield</li><li>Fair Value: assuming company can trade in-line with peers(12.5x 2018 PE) there is another 65% upside</li></ul>

Frencken Group Ltd (FRKN SP) is a global precision engineering companyKey divisions are Mechatronics and IMS which sell products into automotive and semiconductor industriesNew Executive Director appointed in 2016 who brings big-company experience 2018 order book indications strong which should re-rate company in-line with peersFrencken trades at 7.5x 2018 PE and 0.8x book with 4% dividend yieldFair Value: assuming company can trade in-line with peers(12.5x 2018 PE) there is another 65% upside

Discover Singapore: Frencken, Still at Discount to Peers After YTD Performance, 65% Upside to Be Had

France

Valeo designs and manufactures automobile components. The Company offers clutches, engine cooling parts, lighting, electrical systems, windshield wipers, motors and actuators, security systems, electronics, and connective systems. Valeo serves automotive industry worldwide.

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Valeo SA (FR FP)

Hanon Systems (018880): Thesis Is Still Valid - Short.

Hanon Systems (018880 KS) share price has outperformed its peers in the past 12 months and still command a valuation premium to its peers. In this...

Henry Soediarko

Global Equity Strategy: Overweight Cyclicals

Our positive outlook on global equities (both the MSCI ACWI and ACWI ex-US) remains intact and we believe a “buy the dip” strategy is warranted. We...

Vermilion Research

Hanon Systems (018880): Overvalued Stocks in The Low Margin Sector

The recent negative sales in the Chinese auto industry and Nissan's case of Carlos Ghosn removal could put additional pressure on the already thin...

Henry Soediarko

Tokyo Motor Show: Digital Mirrors on Next-Gen Concept Cars Prove Motherson Sumi Is on Right Track

Last week we attended the preview of the 2017 Tokyo Motor Show at Tokyo Big Sight. With no more than 20,000 attendees gathered at the venue that...

Chacko Jacob

Discover Singapore: Frencken, Still at Discount to Peers After YTD Performance, 65% Upside to Be Had

Frencken Group Ltd (FRKN SP) is a global precision engineering company Key divisions are Mechatronics and IMS which sell products into automotive...

Nicolas Van Broekhoven

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