MNCS Morning Navigator 02 June 2020

Global Market Highlight

DJIA grew by +0.36% on Monday (01/06) followed by the increase of S&P500 (+0.38%) and Nasdaq (+0.66%). These slight rises were deemed positive still amidst the lockdown reopening followed by new normal adaptation, despite the continuing riot in the US triggered by a murder which was forcing Texas, Arizona, Georgia, Missouri and Minnesota to declare emergency status and implement curfew. The market will look forward to several data releases today, such as:1) UK Housing Prices per May-2020; 2) UK Mortgage Lending per May-2020; 3) Spain Unemployment Change per May-2020.

Domestic Updates

Domestic loan only grew by 5.73% YoY as of Apr-2020. This is the lowest growth since Nov-2009 and lower compared to 7.95% YoY growth in Mar-2020. The non-performing loan ratio rose to 2.89% in April, from 2.77% the previous month. We see that this has been anticipated as the Covid-19 outbreak crippled the domestic economy, bringing a sudden halt to most businesses. Along with the decline on economic growth projections, therefore loan growth will also follow along as most debtors apply for loan restructure. (Reuters)  

Company News

1. ADRO will distribute USD250.13 million of dividend with 62% payout ratio. ADRO had distributed USD150.01 million of interim dividend on January 15, 2020. Meanwhile, USD100.12 million will be the final cash dividend. Dividend per share amounted to USD0.00782 or equals to IDR114.25/share, making the dividend yield stood at 10.38%. Cum date will be on June 3, 2020. MNCS comment: We see that this dividend yield will be attractive for investors as it is relatively higher than peers. ADRO is traded at 6.27x/0.64x PE/PBV, lower than peers. (Kontan)
2. ASSA recorded revenue growth of 38% YoY to IDR701.62 billion in 1Q20. The largest contribution came from the passenger car rent and auto pool segment with IDR327.38 billion, 46.7% of its total revenue, followed by used vehicle sales with 18%, express delivery through the AnterAja platform with 14%, driver service with 9%, and logistics with 6%. In addition, ASSA's cost of goods sold and general and administrative expenses surged 43% YoY and 42.3% YoY respectively. The company also recorded IDR26.05 billion in net profit during the period. MNCS comment: ASSA will be experiencing an increase on logistic business during this pandemic period. ASSA is traded at only 10.57x/0.98x PE/PBV. (IDNFinancial)
3. INTP sold 5 million tons of cement during the January-April 2020 period. This realization was down 8% YoY compared to same period the previous year. Management said, in 1H20 would be harsh as INTP sales volume was disrupted by four major flood events. Overall, INTP's management decided to revise this year's sales growth target, initially growing from 4% to 5% revised to -7%. As a comparison, INTP managed to sell 18.1 million tons of cement in 2019. MNCS comment: We believe that efficiency strategies are needed to be done to maintain its margin. INTP is traded at only 24.27x/1.93x PE/PBV, relatively lower than peers. (Kontan)

IHSG Updates

JCI surged by +0.79% to 4,716.19 on Friday (29/05) supported by a net foreign buy reaching IDR85.76 billion. The increase was supported by the easing that will start on June 4 this week such as 1) the reopening of the public market with a maximum visitor limit of 50% of capacity; 2) restaurants are allowed to open on-site dining services or diners with a maximum visitor capacity of 30%; 3) Drugstore or pharmacy is fully operational. Meanwhile, the Rupiah exchange rate against the USD was appreciated at IDR14,610. We estimate JCI will move in the range of 4,610-4,780 while waiting for PMI Markit Manufacturing and Inflation rate as of May-2020. Today's recommendation: TLKM, PTBA, LSIP, BMRI.

Corporate Action

Ex Dividend Date: EXCL, KLBF, MPMX

Disclaimer On

TLKM, PTBA, LSIP, BMRI, ASSA, ADRO, INTP