Global Market Highlight
DJIA dropped by -1.50% on Friday (26/02) followed by S&P 500 (-0.47%) while Nasdaq rose by +0.56%.Wall Street stocks ended mixed while technology shares recovered amid encouraging data, though fears of rising interest rates caused investors to take fright. On the other hand, the US House of Representatives is anticipated to pass a USD1.9 trillion Covid-19 stimulus package which is hoped to bring up some optimism in the market. Moreover, the market will look forward to several data releases today, such as: 1) US ISM Manufacturing PMI; 2) China Caixin Manufacturing PMI; 3) Germany Inflation Rate.
Domestic Update
• BI stated that the global economic recovery is starting to show and is estimated to continue, while the domestic economy shows gradual improvement in which the implementation of vaccinations and national policy synergies are predicted to boost the momentum of national economic recovery going forward. Bank Indonesia predicts Indonesia's economic growth in the range of 4.3%-5.3% in 2021, with inflation predicted to remain under control within the 3.0% ± 1% target. Meanwhile, the current account deficit is predicted to remain low at around 1.0%-2.0% of GDP, thereby supporting resilience in the external sector of the Indonesian economy. On the other hand, credit / financing growth is estimated at 5%-7%.
• Furthermore, there was an addition of 2,098 new Covid-19 cases in Jakarta yesterday.
Company News
1. INCO IJ recorded sales of USD764.7 million in FY20 or -2% YoY (vs USD782.0 million FY19). Meanwhile, net profit for the year attributable to owners of the parent entity was recorded at USD82.82 million, up 44.28% YoY (vs USD44.28 million FY19) (Kontan). MNCS Comment: INCO's top line slightly decreased due to a lower ASP while bottom line rose significantly due to the decrease on COGS. We hope INCO's top line will be better this year with nickel price strengthening. Currently INCO is trading at 51.70x/2.12x PE/PBV.
2. CTRA IJ targets sales growth to grow in the range of 15%-20%. Meanwhile, CTRA has budgeted a capital expenditure of IDR1 trillion in FY21E, which will be used for project development and land purchases. Currently, the amount of land owned by CTRA is recorded at around 3,000 hectares (Kontan). MNCS Comment: CTRA is quite confident in adding a land bank due to the fact that the residential area is still recording decent sales, along with high demand for housing in FY21E. CTRA is currently trading at 69.25x/1.46x PE/PBV.
3. ITMG IJ targets FY21E sales volume to be 20.7 million to 22.9 million tons, or higher than the 2020 sales volume of 21.2 million tons. ITMG will continue to expand into emerging markets, especially in Asean and Asia-Pacific (Bisnis Indonesia). MNCS Comment: We believe the target is achievable as ITMG managed to hit 21.2 mn ton of coal production amid the pandemic. ITMG is trading at 24.76x/1.14x PE/PBV.
IHSG Updates
JCI dropped by -0.76% to 6,241.80 on Friday (26/02) followed by net foreign sell reaching IDR95.07 billion. JCI closed the week low with almost all sectors dropping quite significantly, only the consumer sector managed to increase. We believe this was due to the global indices movement that reflected on JCI. Meanwhile, the Rupiah exchange rate was weakening at IDR14,235. We estimate JCI will move in the range of 6,173-6,315 while waiting for Loan growth and Inflation rate data release. Today's recommendation: ASII, GGRM, PTBA, INCO.
Corporate Action
Cum dividend date: MEGA (IDR301.56/share)
Rights Issue: SAME (IDR200/share)
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