In this briefing:
- The Week that Was in [email protected] – Consumer Transformation, Indonesian Banks, and Semcorp
- Indonesian Consumers – This Transformation Is Forever – BUY Staples and Healthcare
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.
The latest report from AC Niesen Indonesia is entitled “Meet the new consumer” and looks into the changing behaviour of Indonesia’s consumers in the face of the COVID-19 pandemic.
These changes will have a pronounced impact on the retail landscape in Indonesia and the way that the population consumes, with a lot more already going online and much more focus on health with more financial restraint.
A number of consumer behaviours developed during the pandemic will stick as we enter the new normal period, with 16% of those surveyed by AC Nielsen suggesting they will not visit the mall even under the new normal.
We remain positive on consumer staples and healthcare stocks including Unilever Indonesia (UNVR IJ),Indofood CBP Sukses (ICBP IJ), Kalbe Farma (KLBF IJ),Mitra Keluarga Karyasehat Tbk (MIKA IJ) and consumer discretionary name Mitra Adiperkasa (MAPI IJ) for the recovery.
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