The news that Indonesia’s largest industrial gas company Aneka Gas (AGII IJ) is to buy the remaining industrial gas assets from its parent is a positive move both from an economic and governance point of view.
The transaction involves the purchase of two assets including the Cikande Factory located in Banten and the Gresik Factory located in East Java. According to management, the two factories are the two most productive assets in the Samator Group.
The transaction will give Aneka Gas (AGII IJ) additional market share and scale benefits, as well as potentially higher sales and profit growth.
Aneka Gas (AGII IJ) registered a relatively resilient performance in 9M12, with revenues down -2.5% after a recovery in 3Q2020 driven by healthcare and infrastructure.
The prospects for FY21E should be better driven by a recovery in its bottled gas business together with consumers and continue growth in infrastructure.
We await further details on financials but the share price has already seen an upward re-rating over the past three months possibly reflecting some of this transaction. Aneka Gas (AGII IJ) now trades on 25.9x FY21E PER and 22.7x FY22E PER versus its 3-year average of 17.1x FY21E PER but we expect a higher growth period to justify higher multiples.
If Tesla (TSLA US) is the Apple(AAPL US) of EV sector, Xpeng might be the Xiaomi(XIACY US), in our view. In the short term (before the launch of P5 ), lower prices of new Made in China Tesla Model 3 might have negative impact on P7 sales; but increasing client interest on Tesla would benefit Xpeng P7. On a 10 year view, Xpeng would be the winner among existing Top three Chinese emerging EV brands, by being a follower of Tesla (focusing on making EVs ‘smart’)
Xpeng might turn profitable in 2022 with increasing awareness and acceptance by the customers, launch of P5 and first B-segment SUV.
There are some signs that the Thai government is being more pragmatic with measures, less draconian. The data set we are referring to is small and slightly touch-feely but the implications can be hugely positive for banks, the economy. To us Kasikornbank PCL (KBANK TB) stands out, having taken higher credit costs than large peers and more exposed to SMEs.