Global Market Highlight
DJIA slipped by -0.54% on Friday (30/04) followed by S&P 500 (-0.72%) and Nasdaq (-0.85%). Wall Street fell as the 1Q21 earnings reporting season came to a close, with investors weighing results from most large technology companies and good economic data. Signs of weaker manufacturing and services activity in China and recession in Europe contributed to the weakening indices. China’s official manufacturing purchasing managers index declined to 51.1 in April from 51.9 in March, and the eurozone economy shrank at the beginning of 2021 for the second consecutive quarter, entering its second technical recession in a year. Moreover, the market will look forward to several data releases today, such as: 1) US ISM Manufacturing PMI; 2) Eurozone Markit Manufacturing PMI; 3) Hong Kong GDP Growth Rate.
Domestic Update
• Indonesia needs funds of USD450 billion or the equivalent of IDR6,495 trillion for infrastructure development. However, the State Revenue and Expenditure Budget (APBN) can only meet half of the infrastructure needs, which is around USD200 billion or around IDR2,888 trillion. Until April 2021, INA has secured a commitment through the signing of a Memorandum of Understanding (MoU) or an investment memorandum of understanding worth IDR50 trillion-IDR 60 trillion.
• Furthermore, there was an addition of 854 new Covid-19 cases in Jakarta yesterday.
Company News
1. GGRM IJ posted revenue of IDR29.74 trillion in 1Q21, which is an increase of +9.11% YoY (vs IDR27.26 trillion in 1Q20). However, the cost of revenue also increased from IDR22.32 trillion in 1Q20 to IDR25.83 trillion in 1Q21. GGRM posted a net profit of IDR1.75 trillion in 1Q21 which was down 28.61% YoY (vs IDR2.45 trillion in 1Q20) (CNBC Indonesia). MNCS Comment: GGRM's performance is in line with MNCS estimates where revenue and net profit reached 26% / 25% of the total FY21E estimate. We estimate that the SKM segment will still dominate performance throughout FY21 with a moderate increase in ASP at the level of 4.37%. Currently GGRM is trading at 9.94x/1.15x PE/PBV.
2. UNVR IJ posted revenue of IDR10.28 trillion in 1Q21, which is down -7.80% YoY (vs IDR11.15 trillion in 1Q20). However, cost of revenue also decreased from IDR5.30 trillion in 1Q20 to IDR4.88 trillion in 1Q21. UNVR posted a net profit of IDR1.69 trillion in 1Q21 which is down -9.13% YoY (vs IDR1.86 trillion in 1Q20) (Kontan). MNCS Comment: The decrease in income mainly came from the household needs and personal care segments (-12.63% YoY). UNVR's performance was slightly lower with the MNCS estimate where revenue and net profit reached 23% of the total FY21E estimate. UNVR is currently trading at 33.80x/34.89x PE/PBV.
3. TLKM IJ posted revenue of IDR136.46 trillion in FY20, which increased +0.66% YoY (vs IDR135.46 trillion in FY19). IndiHome services were the main contributor to TLKM's revenue, amounting to 21.2% or IDR22.2 trillion. TLKM posted a net profit of IDR20.80 trillion in FY20 which increased by 11.46% YoY (vs IDR18.66 trillion in FY19) (Bisnis Indonesia). MNCS Comment: The success in reducing opex and maintenance costs supported TLKM's performance so that the net profit exceeded MNCS estimate (109% of the total FY20 estimate). The planned implementation of 5G, the winning spectrum auction and investment in GoJek are positive catalysts throughout the FY21E year. TLKM is trading at 15.24/3.09x PE/PBV.
IHSG Updates
JCI dropped by -0.29% to 5,995.62 on Friday (30/04) followed by net foreign buy reaching IDR186.27 billion. It seems that some positive global sentiment is still unable to boost JCI movement. On the other hand, the majority of sectors continued to strengthen, but the financial sector was weighing JCI down. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,445. We estimate JCI will move in the range of 5,980-6,030 while waiting for the PMI Markit Manufacturing data release. Today's recommendation: JSMR, PTBA, PGAS, WTON.
Corporate Action
Cum Dividend Date: EXCL (IDR31.7/share)
RUPS: INDY, PGAS
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