Indonesia

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Fosun International
2. China SCE
3. CIFI Holdings
4. Vedanta Resources
5. China Jinmao Holdings

and more…

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China SCE
• CIFI Holdings
• Fosun International
• Sino-Ocean Service
• Vedanta Resources

• Fazz claims it saw US$10B in annualised transaction volumes over the past year and looks to double the volumes in the next 12 months
• Fazz, a digital financial services group dual-headquartered in Singapore and Indonesia, has announced a US$100 million Series C funding round.
• Fazz will use the funds to grow the business and expand its teams in Singapore, Indonesia, Malaysia, Vietnam and Taiwan from 800 to 1,400.

• Food delivery is the digital sector with the highest adoption in Southeast Asia. The pandemic gave the segment a huge boost, as people were forced to stay at home.
• Local food startup Uena tried to solve this by building a network of online kitchens that can deliver these meals directly to customers.
• It targets lower and middle-income segments, such as office workers, university students, convenience store employees, and couriers of food delivery apps.

For our next Corporate Webinar we are glad to welcome Bukalapak’s Director – Strategy, Corp Comms and IR, Carl Reading.

In the upcoming webinar, Carl will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Henry Soediarko. The Corporate Webinar will include a live Q&A session.
 
This Corporate Webinar will be hosted on Tuesday, September 20, 17:00 SGT

• In mid-July, United Tractors (UNTR IJ) announced a buyback of up to 5 trillion rupiah, buying back “up to 20% of shares out.”  
• In United Tractors (UNTR IJ) Buyback – Sure to Be Impactful I said the buyback would be smaller than the headlines, but still likely quite impactful. 
• On Day 1, shares rose 5% to IDR 28,275. Since then the stock is up an additional 22%. Now we have a month left. There may be more juice still. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Longfor Properties
• Tower Bersama Infrastructure

• In 2Q22, the six Indonesian banks retain their strong capital adequacy ratios, healthy credit quality and good NPL coverage; yet we see select credit quality headwinds, especially in MSME credit
• We maintain our positive view on Bank Mandiri, with its attractive pre-provision profitability and healthy cost of risk, whilst trading on attractive multiples; we prefer Bank Negara to Bank Rakyat
• We await stronger signals from Bank Permata for its “turn around” potential, especially if management can improve credit quality, and keep lowering its cost of risk to boost returns

• Gokomodo, an Indonesia-based agriculture supply chain platform, said it earned US$26 million in a series A round led by East Ventures.
• Gokomodo is a B2B startup that offers digital procurement, digital commerce, and distribution services.
• Its clients also have the option of buying competitive products through the company’s ecommerce storefront.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. ABM Investama
2. China Jinmao Holdings
3. Lifestyle International Holdings
4. Geely Auto
5. First Pacific Co

and more…

• Jet Commerce launched a Live Commerce service through its newest business unit, Lumbalumba, last July and inaugurated its live streaming centre
• Indonesia-based e-commerce enabler, Jet Commerce, has announced the completion of its Series B funding round of more than US$60 million (IDR 900 billion).
• Jet Commerce will use the funds to upgrade infrastructure, recruit more professional local talent, improve research and technology development, and strengthen its ability in brand incubation.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• ABM Investama
• Azure Power Global Ltd

• GoTo (GOTO IJ) reported 2Q2022 results yesterday. Gross revenue increased 45.4% YoY to IDR5.6trn while operating losses as a % of net revenue increased to 420% from 273.6% in 2Q2021.
• The company expects to make positive contribution margin by 1Q2024E, however, we don’t expect GoTo to make operating profits for the next 3-4 years given its large fixed cost base.
• Reuters reported that GoTo is planning to raise $1bn through convertible bonds. This shows that the company is burning cash to fuel growth but at the cost of margins.

• United Tractors (UNTR IJ) represents a well-rounded proxy to higher commodity prices through Komatsu heavy equipment, coal contracting and mining together with gold mining.
• It booked a strong set of 1H2022 results with net profit rising +129% YoY but heavy equipment sales momentum has continued into 1H2022 given there are still supply constraints.
• United Tractors possesses hidden value in Agincourt Resources’ gold reserves, which are worth more than the company’s market cap. Valuations are below historical averages despite the strength of the commodities.

• After Axiata  (AXIATA MK) completed the acquisition of 66.03% in Link Net (LINK IJ) on the 22 June, Axiata was obligated to undertake a mandatory offer for the remaining 33.97%. 
• The MTO commences today and concludes on the 28 September. Payment will be the 6 October.
• There are no conditions attached to the MTO. Play the spread, where available.

• Ace Hardware Indonesia (ACES IJ) 1H2022 results continued to reflect a hangover from COVID-19 in terms of slower growth although the company continues to demonstrate its resilience.
• The company’s store expansion continues with plans for 15 stores in total for 2022, whilst SSSG have seen a sharp recovery recently bringing YTD SSSG into positive territory.
• Ace Hardware is one of Indonesia’s top quality retailers with the potential for a sharp recovery and valuation looks attractive on 15x FY2023E PER versus 27x 5-year average PER.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• ABM Investama
• Adaro Minerals

• On 22 June, Axiata Group (AXIATA MK) and XL Axiata (EXCL IJ) completed the acquisition of a combined 63.45% interest in Link Net (LINK IJ) for approximately RM2.63 billion (IDR8.72 trillion).
• Today, Axiata announced that the mandatory tender offer (MTO) runs from 30 August to 28 September. The MTO price is IDR4,800 with no minimum acceptance condition.
• At the current price of IDR4,740 per share, the gross and annualised spread for a mid-October payment is 1.3% and 9.1%, respectively.

• This acquisition confirmed Investree as a minority stakeholder in the bank, while Tolaram Group remained a majority stakeholder

• Fintech startup Investree today announced that it had completed the acquisition of local bank Amar Bank, increasing its stake from 10.9 per cent of all issued and fully paid shares in June to 18.4 per cent.
• Investree and Amar Bank said that by utilising its “solid ecosystem”, they will build a digital bank for MSMEs, who is described by the companies as “the backbone of the country’s economy”, and utilise existing products by the two companies to support MSMEs.