Global Market Highlight
DJIA rose by +0.17% on Thursday (08/04) followed by the S&P 500 (+0.42%) and Nasdaq (+1.03%) The Wall Street fully strengthened, as the Fed indicated that imbalance recovery will keep the easy monetary policy for some time, cooling investor expectations that the Fed will be forced to act sooner than expected. Meanwhile, weekly jobless claims increased more than expected, sending US bond yields lower and paving the way for big tech to continue its climb. Moreover, the market will look forward to several data releases today, such as: 1) US Producer Price Index; 2) China Inflation Rate; 3) Germany Balance of Trade.
Domestic Update
• The coordinating minister for the economy stated that until April 1, 2021, the realization of the 2021 national economic recovery program (PEN) reached IDR123.26 trillion, equivalent to 17.6% of the total 2021 PEN program budget of IDR699.43 trillion. Also the PEN 2021 budget increased by 21% compared to the realization of PEN 2020 amounting to IDR579.78 trillion. The largest increase in the budget came from the health program which reached IDR176.3 trillion which increased 177.63% YoY (vs IDR63.51 trillion in FY20) (Kontan).
• Furthermore, there was an addition of 1,239 new Covid-19 cases in Jakarta yesterday.
Company News
1. ERAA IJ posted revenue of IDR34.11 trillion in FY20, which increased by +3.54% YoY (vs IDR32.94 trillion in FY19). The increase in revenue was due to the increase in sales of cellphones and tablets to IDR26.03 trillion in FY20 from IDR25.64 trillion in FY19. ERAA posted a net profit of IDR325.58 billion in FY20 which increased by +107.45% YoY (vs IDR671.72 billion in FY19) (CNBC Indonesia). MNCS Comment: The increase in revenue supported by stable COGS and lower financial costs (-41% YoY) made ERAA's net profit grow significantly. We predict that the solid performance will continue until FY21E is supported by the post-pandemic economic recovery and business diversification to retail stores with better margins.Currently BJBR is trading at 2.68x/0.30x PE/PBV.
2. LPKR IJ posted marketing sales revenue of IDR1.31 trillion during 1Q21. LPKR has realized 37.42% of FY21E marketing sales target of IDR3.5 trillion or an increase of +86.34% YoY (vs IDR703 billion in FY20) (Bisnis.com). MNCS Comment: Along with the improving demand for first-hand landed houses, LPKR's marketing sales increased in 1Q21. Improvements in property demand began to recover in 3Q20-4Q20 after Covid-19. LPKR is currently trading at 0.56x PBV.
3. DSNG IJ will distribute FY20 cash dividends of IDR12.5/share or IDR130.7 billion of the total FY20 net profit of IDR476.6 billion (Bisnis.com). MNCS Comment: DSNG dividend payout ratio of 27% of FY20 net profit decreased compared to FY19 which reached 29.41% while the dividend yield offered was 1.98% or an increase compared to FY19 yields of 1.59%. DSNG is trading at 14.01x/1.09x PE/PBV.
IHSG Updates
JCI rose by +0.58% to 6,071.72 on Thursday (08/04) followed by net foreign sell reaching IDR500.91 billion. JCI continued its 3-day rally, supported by the increase in the mining sector despite a slight drop in hard commodity prices. Furthermore, the basic industry and property sector followed suit but miscellaneous industry and the infra sector still slipped. Meanwhile, the Rupiah exchange rate was weakening at Rp14,535. We estimate JCI will move in the range of 6,000-6,170 while waiting for Retail Sales data release. Today's recommendation: GGRM, ADRO, INCO, JPFA.
Corporate Action
Cum Dividend: SIDO (IDR18.9/share), BBYB (IDR0.23/share)
RUPS: BNGA
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