MNCS Morning Navigator 04 December 2020

Global Market Highlight

DJIA increased by +0.29% on Thursday (03/12) followed by Nasdaq (+0.23%) though S&P 500 remains flat (-0.06%). Another vaccine news had boost the market as Pfizer stated that it will ship about 50 million doses of vaccine, lifting the optimism towards faster vaccination and economic reopening. Furthermore, the continuation of the stimulus talks as well as the lower unemployment claims have raise a positive tone within the market.Moreover, the market will look forward to several data releases today, such as: 1) US Unemployment Rate; 2) US Non Farm Payroll; 3) US Balance of Trade.

Domestic Update

• The government has prepared a strategic plan to develop biofuels or biofuel (BBN) The plan are as follows: 1) ensure the B30 program continues as targeted as well as evaluate and improve the implementation; 2) develop B40 and B50 program by carrying out a road test on existing diesel power plant engines; 3) increase the green fuel program together with Pertamina to develop a standalone green fuel to produce green diesel, green gasoline and green avtur; 4) development of hydrogenation of palm oil (HPO); 5) utilize the reclaimed or ex-mining land in collaboration with the Directorate General of Mineral and Coal and the Regional Government to identify ex-mining land and work with Ministry of Agriculture to determine the most suitable commodity. Target for biofuel production is around 17.8 million kiloliters in 2035.
• Furthermore, the new cases of Covid-19 infection in Jakarta is reported to be 1,153 on December 3, 2020.

Company News

1.       TOWR IJ recorded a revenue increase of 19.35% YoY to IDR4.65 trillion in 3Q20. Together with increase in operating profit of 15.69% YoY, the company recorded a net profit of IDR1.91 trillion which increased by 20.13% from the same period last year (Emiten News). MNCS Comment: TOWR reported performance is slightly in line with our and consensus estimate. We believe tenancy ratio will increased 1.7x-1.8x in FY21F supported by higher demand on network traffic. TOWR is currently traded at 21.25x/5.58x PE/PBV.
2.        DEWA IJrevenue increased by 0.58% YoY to USD239.31 million in 3Q20. Most of the revenue came from few large clients namely PT Kaltim Prima Coal (USD175.82 million), PT Arutmin Indonesia (USD47.64 million), and PT Cakrawala Langit Sejahtera (USD14.84 million). The company booked a net profit of USD1.2 million (+0.8% YoY), slightly increase from the same period last year of USD1.19 million (IDN Financials).MNCS Comment: While most of the mining sector's performance drop, DEWA managed to maintain it's performance. We see that the increasing coal price will benefit DEWA. DEWA is currently traded at 67.03x/0.27x PE/PBV.
3.        ASSA IJ booked an increase in revenue of 28.14% YoY to IDR2.14 trillion in 3Q20. Main contributor of the revenue is the rental vehicles, passenger cars and autopool which increased by 2.14% to IDR942.41 billion, followed by shipping services of 17.86% to IDR 484.39 billion. However, the company’s COGS increased by 79.22% while the general and administration expense increased by 24.2%. Thus, the company reported a net profit decrease of 41.7% to IDR51.19 billion (Investor Daily). MNCS Comment: The increase on COGS seem to top the revenue increase causing a decrease on bottom line, we hope that ASSA's future performance will be able to balance between revenue and cost. ASSA is currently traded at26.13x/1.44x PE/PBV.

IHSG Updates

JCI rose by +0.15% to 5,822.94 on Thursday (03/12) followed by net foreign buy reaching IDR264.23 billion. JCI still continuing it's rise supported by foreign inflow although most of the sectors fell but agriculture, mining, finance and property still offset the decline. We see that JCI is mostly moved by commodity stocks such as CPO, coal and metals due to the latest issue that affect the prices. Meanwhile, the Rupiah exchange rate was weakening at IDR14,140. We estimate JCI will move in the range of 5,563 – 5,900 while waiting for foreign exchange reserve data release. Today's recommendation: MAPI, ADRO, PNLF, WSBP.

Corporate Action

Cum Dividend Date: PPGL (IDR2/share)

Disclaimer On

MAPI, ADRO, PNLF, WSBP