Global Market Highlight
DJIA surged by +1.95% on Monday (01/03) followed by S&P 500 (+2.38%) and Nasdaq (+3.01%). Wall Wall Street roared as financials and tech stocks racked up gains after the US bond yield spike that rattled markets eased and positive vaccine news stoked hopes for a more solid recovery. Johnson & Johnson's Covid-19 vaccine received approval from the Food and Drug Administration with about 20 million doses expected to be rolled out this month. The approval provided a boost to the pace of vaccinations across the U.S., stoking expectations for a stronger reopening just as progress continues to be made on the USD1.9 trillion stimulus bill. Moreover, the market will look forward to several data releases today, such as: 1) Eurozone Core Inflation Rate; 2) Canada GDP Growth Rate; 3) Germany Unemployment Rate.
Domestic Update
• The government exempts VAT (Value Added Tax) for property. This program is an additional tax incentive. VAT for houses with prices up to IDR2 billion for 6 months is written off and for the price of IDR2 billion-IDR5 billion, 50% of the tax is borne by the government.
• The IHS Markit Indonesia Manufacturing PMI fell to a three-month low of 50.9 in February 2021 amid disruption caused by the Covid-19 pandemic. Employment shrank for the twelfth month in a row but at the slowest pace in the sequence.
• *Indonesia’s loan growth decreased 1.90% MoM in January of 2021
• Indonesia's annual inflation declined to 1.38% YoY in February of 2021, the lowest since August last year and matching market expectations, as food, drinks and tobacco inflation slowed to a five-month low of 1.92% YoY in February, while housing & utilities inflation eased to 0.20% YoY.
• Furthermore, there was an addition of 2,098 new Covid-19 cases in Jakarta yesterday.
Company News
1. SMGR IJ recorded total net income at IDR35.17 trillion or -12.87% YoY (vs IDR40.37 trillion FY19). Cost of revenue was recorded at IDR23.55 trillion or -14.82% YoY (vs IDR27.65 trillion in FY19). So that in FY20 the net profit was recorded at IDR2.79 trillion or +16.7% YoY (vs IDR2.39 trillion FY19) (Emitennews). MNCS Comment: The decline of net income was due to lower domestic cement demand, especially in several national strategic projects that were delayed due to the relocation of the government budget. However, SMGR is able to maintain cost efficiency. Currently SMGR is trading at 22.68x/1.85x PE/PBV.
2. JPFA IJ recorded a decline in net sales -4.90% YoY in FY20 to IDR36.96 trillion (vs IDR38.87 trillion FY19). Meanwhile, cost of goods sold was recorded at IDR29.53 trillion or -4.72% YoY (vs IDR31.00 trillion FY19). So that the profit for the period attributable to the owner of the parent company was IDR916.71 billion, decline 48.06% YoY (vs IDR1.88 trillion FY19) (Emitennews). MNCS Comment: The decline in net sales and profit was mainly due to weakening demand for poultry products. However, even though JPFA recorded a decline, earnings beat MNCS target, reflecting 129% of the FY20 target. JPFA is currently trading at 20.28x/1.74x PE/PBV.
3. ITMG IJ recorded a revenue decline of -30.9% YoY in FY20 of USD1.18 billion (vs USD1.71 billion FY19). Meanwhile, net profit was recorded at USD39.47 million in FY20 or decreased by 69.5% YoY (vs USD129.42 million FY19) (Kontan). MNCS Comment: The drop on ITMG's performance was due to a lower ASP as coal price was on downtrend earlier in FY20. ITMG is trading at 24.46x/1.13x PE/PBV.
IHSG Updates
JCI rose by +1.55% to 6,338.51 on Monday (01/03) followed by net foreign buy reaching IDR65.95 billion. JCI started the week strong with all sectors increasing. Finance, miscellaneous industry and property sector led the gains with more than 3% growth supported by the housing VAT relaxation. Meanwhile, the Rupiah exchange rate was weakening at IDR14,255. We estimate JCI will move in the range of 6,173-6,505 while waiting for foreign exchange reserve data release. Today's recommendation: BBNI, PTPP, INDY, TINS.
Corporate Action
RUPS: AGRS
Disclaimer On
