In this briefing:
- DELTA: Prime Beneficiary of Transition to Electric Vehicles
- SET50 Index Review – Delta to Sell
- The Week that Was in [email protected] – Consumer Transformation, Indonesian Banks, and Semcorp
We initiate coverage of DELTA with a HOLD rating and a 2021E target price of Bt56.50, derived from 17.5x PE’21E, which is its 5-year trading average.
Delta Electronics (Thailand) Public Company Limited is a subsidiary of Delta Electronics, Inc. Delta Thailand is a manufacturer and exporter of power supplies and electronic equipment and parts. The company is one of the world›s leading producers of power supplies and electronic components, including cooling fans, EMI filters, and solenoids. At present, the company has 2 main plants in Thailand and two each in India (Rudrapur and Krishnagiri), Slovakia (Dubnica and Váhom and Liptovsky Hradok).
Late last evening, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index. The changes will be effective from 1 July 2020 and passive funds and index arb desks will need to trade at (or by) the close on 30 June 2020.
This past week’s offering of Insights across [email protected] is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week’s relevant discussions in [email protected]
In Labour Market Slack Remains but FOMC Will Need to Tighten by Mid-2021, CrossASEAN Cheif Economist Prasenjit K. Basu revisits the US Economy, where he sees inflationary risks ahead.
In Post-COVID 19 – Economic Reality Bites,Sharmila Whelan suggests that we may be about to see a change in market sentiment as the realisation of the true impact of COVID-19 dawns on liquidity-driven markets.
Equity Bottom-Up Insights
In Bank Mandiri Persero (BMRI IJ) – Biting the Bullet on Restructuring, CrossASEAN Insight Provider Angus Mackintosh revisits this leading Indonesian lender as it lays out its COVID-19 restructuring plans.
In SATS: Traffic -99.5% in April and May; How Much Worse Can It Get?, CrossASEAN Insight Provider Nicolas Van Broekhoven revisits Singapore’s leading aircraft maintenance player and asks whether we have hit the bottom.
In Keppel Corp – Stretched Vs Proxy Baskets And Now With New Risk, Travis Lundy revisits this long-in-the-tooth partial offer.
In Sembcorp Industries/Sembcorp Marine Rights Issue and Demerger,Arun George also comments on this ongoing transaction.
In SMM Rights Issue & Demerger Is One Step Closer to Keppel O&M+SMM Merger,Ke Yan, CFA, FRM looks at this ongoing situation but sees a longer-term endgame ahead.
In BTS: Solid Core Operation with Huge Potential Upside, our friends at Country Group revisit BTS Group Holdings (BTS TB) and expect some softening in the outlook.
In SPA: Major Beneficiary of Return Chinese Tourist Arrivals in Thailand,Country Group upgrade Siam Wellness Group (SPA TB) to BUY as it will be a beneficiary of Chinese tourists returning to Thailand.
Sector and Thematic Insights
In Indonesian Consumers – This Transformation Is Forever – BUY Staples and Healthcare, CrossASEAN Insight Provider Angus Mackintosh zeros in on the changing behaviour of the Indonesian consumer over COVID-19.
In Indonesian Media – A Tale of Two Cities – BUY MNCN, CrossASEAN Insight Provider Angus Mackintosh revisits the sector in light of the ongoing COVID-19 impact.
In WhatsApp, PayPal Funding To Fortify Go-Jek’s Go-Pay Business,Aqila Ali takes a look at the reasoning behind Facebook Inc A (FB US) and Paypal Holdings (PYPL US)‘s recent investment into Gojek (1379371D IJ).
In Chandra Asri – Earnings Flash – Q1 FY 2020 Results,Trung Nguyen zeros in on recent results from Chandra Asri Petrochemical (TPIA IJ), which were weaker than expected.
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