Global Market Highlight
DJIA slipped by -1.11% on Thursday (04/03) followed by S&P 500 (-1.34%) and Nasdaq (-2.11%).Wall Street tumbled for a second-day in a row as US rates resumed their sharp acceleration after the Fed offered no clues on ramping-up bond purchases and shrugged off investor fears about rising inflatio. The Fed stated that they would continue the current pace of bond buying despite the rates jumping above 1.5%, which sparked a wave of volatility. 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 Minister of Finance announced several national economic recovery programs (PEN) for 1Q21: 1) Accelerating the realization of social protection programs (Perlinsos) which includes the Family Hope Program (PHK), distribution of social assistance, Cash Social Assistance (BST), Village Fund Direct Cash Assistance which IDR16.59 trillion has been realized in January 2021; 2) Acceleration of budgeting and realization of Micro Business Productive Assistance (BPUM) targeted to be distributed in March 2021; 3) The labor intensive program of the Ministry of PUPR, Ministry of Agriculture, Ministry of Marine Affairs and Fisheries (KKP), and Ministry of Transportation; 4) Tax incentives on the sale of luxury goods (PPnBM) of motorized vehicles and housing VAT has take effect in March 2021; 5) Acceleration of the second phase vaccination program.
• Furthermore, there was an addition of 2,008 new Covid-19 cases in Jakarta yesterday.
Company News
1. ADRO IJ posted revenue of USD2.53 billion in FY20 or -27% YoY (vs USD3.45 billion FY19). Net profit stood at USD146.92 million FY20 or -63.64% YoY (vs USD404.19 million FY19). Meanwhile, the planned capital expenditure is USD200 million - USD300 million in FY21E (Kontan). MNCS Comment: The increase in production and sales volume was not enough to offset the drop on coal ASP. Meanwhile the budgeted capex for FY21 is lower than USD400 million in FY20. Currently ADRO is trading at 18.96x/0.75x PE/PBV.
2. FREN IJ recorded total operating income of IDR9.41 trillion in FY20 or +34.63% YoY (vs IDR6.99 trillion FY19), operating expenses recorded at IDR10.16 trillion or grew 9.36% YoY (vs IDR9.29 trillion in FY19). So that in FY20 it recorded a net loss of IDR1.52 trillion (vs a net loss of IDR2.19 trillion in FY19) (Emitennews). MNCS Comment: Revenue growth supported by efficiency success made FREN net loss improved in FY20. We estimate the right issue action scheduled for this year will be a positive sentiment to reduce financial burdens and strengthen the balance sheet. FREN is currently trading at 2.04x PBV.
3. TPIA IJ plans to allocate capital expenditure of USD65 million in FY21E. The Capex will be used to maintain the current operation of the TPIA factory. This is to ensure that the factory can fully operate so that TPIA can have the opportunity for an increase in margin in FY21E (Kontan). MNCS Comment: This capex will be used for several projects such as Chandra Asri Perkasa (CAP) II. Although the capex in FY21E fell compared to the realization in FY20, we consider this to be quite reasonable in the midst of conditions that are still in the recovery stage. TPIA is trading at 239.40x/6.80x PE/PBV.
IHSG Updates
JCI dropped by -1.35% to 6,290.80 on Thursday (04/03) followed by net foreign sell reaching IDR17.70 billion. JCI fell quite deep due to a significant drop in nickel price which has affected the mining stocks, resulting in a slump in the mining sector. Meanwhile, the Rupiah exchange rate was weakening at IDR14,266. We estimate JCI will move in the range of 6250-6400 while waiting for foreign exchange reserve data release. Today's recommendation: ITMG, GGRM, MDKA, RALS.
Corporate Action
Cum Dividend: AMOR (IDR27/share)
RUPS: IKBI
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