MNCS Morning Navigator 07 December 2020

Global Market Highlight

DJIA increased by +0.83% on Friday (04/12) followed by S&P (+0.88%) and Nasdaq (+0.70%). The indices recorded all-time highs following a prospect of Covid-19 stimulus package is taking new steam after the poor employment report. Furthermore, US Department of Labor data shows that November's nonfarm employment increase was only 245,000. This is the lowest number in the last six months. Economists previously estimated the increase in nonfarm payrolls could reach 469,000. Meanwhile, the US dollar exchange rate, which is a safe haven, touched its lowest point in 2.5 years. Moreover, the market will look forward to several data releases today, such as: 1) China Balance of Trade; 2) China Foreign Exchange Reserve; 3) Japan Leading Economic Index.

Domestic Update

• Productive Presidential Assistance for Micro Enterprises (Banpres PUM) has been disbursed as much as 92% or around 11 million micro enterprises from the total quota of recipients of 12 million micro businesses. In addition to proposing that there be additional recipients next year, the minister also proposed for those who have received PUM presidential assistance of IDR2.4 million, get the super micro People's Business Credit (KUR) program under IDR10 million with 0% interest. Based on data from the Ministry of Cooperatives and SMEs, to date there are as many as 28 million micro-entrepreneurs who want a productive presidential ban. However, the government was only able to disburse 12 million.
• Furthermore, there is an additional of 1.331 new Covid-19 cases in Jakarta yesterday.

Company News

1.       MAIN IJ recorded sales of IDR5 trillion as of 9M20 which is 11% YoY lower. The biggest sales contributor still came from the feed business, which generated sales of IDR 3.2 trillion followed by the day-old chick or duck (IDR813.19 billion), the broiler business (IDR638.49 billion), and the processed food business (IDR140.11 billion). Meanwhile, all businesses experienced a decline in sales performance except for the processed food business which actually managed to grow 23.6% YoY. MAIN recorded a loss for of IDR72.5 billion in 9M20 (Market Bisnis). MNCS Comment: We note that the feed margins to remain stable benefit from volume growth. The overall consumer demand in FY20E projected to be lower due to macroeconomic conditions. MAIN is currently traded at  0.84x PBV.
2.        SMCB IJ revenue was recorded at IDR7.33 trillion (-5.21% YoY) in 9M20. While, cement sales fell 0.08% YoY to IDR6.74 trillion, contributes 91.88 % to revenue followed by sales of finished concrete (-38.57% YoY), aggregate sales and other construction services (-62.49% YoY). At the same time, the cost of revenue was able to be reduced by -8.80% YoY. Thus, SMCB posted a profit of IDR438.50 billion, a stellar increase of 120.88% YoY in 9M20 (Market Bisnis). MNCS Comment: SMCB's income fell due to the decline in domestic cement consumption in the midst of the Covid-19 pandemic, however, SMCB succeeded in efficiency so that it was able to reduce its cost of revenue by -8.8% YoY which contributed to higher profits. SMCB is currently traded at 14.68x/1.16x PE/PBV.
3.        AMRT IJ announced that the company will distribute an interim dividend of IDR6.03 per share totaling IDR250.39 billion. AMRT recorded a net profit of IDR638.4 billion in 9M20. This means that the dividend payout ratio for the current interim dividend is 39.22% while yield stood at 0.85%. The cum dividend date will fall on 11 December 2020(Market Bisnis).MNCS Comment: AMRT never missed out on distributing dividends even though there was a disruption in business earlier this year. AMRT is currently traded30.10x/4.47x PE/PBV.

IHSG Updates

JCI slipped by -0.21% to 5,810.48 on Friday (04/12) followed by net foreign sell reaching IDR84.49 billion. JCI fell which we believe was due to profit taking, but we see that this is still a predicted correction prior to Santa Claus Rally that's making a pattern in December. Half of the sectors dropped with Agriculture being the deepest. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,100. We estimate JCI will move in the range of 5,563 – 5,900 while waiting for foreign exchange reserve data release. Today's recommendation: EXCL, ERAA, PTBA, MAIN.

Corporate Action

RUPS: TPIA

Cum Dividend Date: INTP (IDR225/share), BBCA (IDR98/share)

Disclaimer On

EXCL, ERAA, PTBA, MAIN, SMCB, AMRT