MNCS Morning Navigator

09 Juni 2021

MNCS Morning Navigator 09 June 2021

Global Market Highlight
DJIA slipped by -0.09% on Tuesday (08/06) while S&P 500 rose by +0.02% followed by Nasdaq +0.31%. Wall Street closing was varied as investors await inflation number release. And also reports from the US Labor Department and National Federation of Independent Business appeared to confirm a labor shortage even as demand roars back to life, which could put upward pressure on wages, a precursor to wider inflation. The market will look forward to several data releases today, such as: 1) US MBA Mortgage Application; 2) Germany Balance of Trade; 3) China inflation rate YoY
Domestic Update
• Indonesia’s May FX reserves dropped USD2.4 bn to USD136.4 bn from USD138.8 bn in April, marking the lowest level since the beginning of 2021. MNCS Comment: The decrease is mainly due to government payment on foreign loans. In addition there was a net outflow of USD0.5 bn from the domestic bond market offsetting the success of issuance of JPY100 bn Samurai Bond in May. However Indonesia’s FX reserves remain above the international minimum requirement.
• Bank Indonesia (BI) will release Indonesia’s Consumer Confidence Index in May today at 10:00 (AM). The index increased 7.6 points to a 13-month high of 101.5 in April. MNCS Comment: A flipping back to positive territory is a good sign of Indonesia’s economic recovery. We expect May’s reading to remain above 100 points on the back of better mobility & improving domestic demand.
• Furthermore, there was an addition of 755 new Covid-19 cases in Jakarta yesterday.
Company News
1. TBIG IJ posted revenue of IDR1.42 trillion in 1Q21, an increase of +12.7% YoY (vs IDR1.26 trillion in 1Q20). COGS increased from IDR212.22 billion in 1Q20 to IDR336.02 billion in 1Q21. TBIG posted a net profit of IDR265.59 billion in 1Q21 which increased by 16.35% YoY (vs. IDR228.54 billion in 1Q20) (Bisnis Indonesia). MNCS Comment: Strong organic growth boosted TBIG's successful performance by recording the highest tenancy ratio at 1.98x. We believe TBIG will record solid performance throughout FY21E, also supported by additional business from the acquisition of IBST towers which will begin to appear in the 2Q21 report. TBIG is trading at 69.34x/8.04x PE/PBV.
2. HRUM IJ has made an additional investment of approximately USD194 million for nickel business expansion throughout 2021. The value consists of USD80 million for the acquisition of PT Position, USD69 million for PT Infei Metal Industry (IMI) at the beginning of the year, and additional acquisitions shares in Nickel Mines Ltd of USD45 million (Bisnis Indonesia). MNCS Comment: From our view, the investment increase is intended for a diversification toward nickel which is the future commodity. It is a great strategy rather than relying heavily on coal which will gradually decline. HRUM is currently trading at 13.09x/2.38x PE/PBV.
3. MTDL IJ will distribute FY20 cash dividends of around IDR37/share or reaching IDR90.85 billion of the total FY20 net profit of IDR364.9 billion (IQ Plus). MNCS Comment: MTDL's dividend distribution ratio is 25% of FY20 net profit, while the dividend yield offered is 2.17%, this value is lower than FY19's yield of 2.37%. Currently MTDL is trading at 8.61x/1.70x PE/PBV levels.
IHSG Updates
JCI fell by (-1.16%) to 5,999.37 on Tuesday (08/06) followed net foreign sell reaching IDR263.02 billion. JCI declined as most sectors weakened along with the weakening on Wall Street. Only the tech sector strengthened (+13.41%). The drop in Foreign Exchange Reserves seemed to weigh on JCI. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,252. We estimate JCI will move in the range of 5,920-6,050 while waiting for Consumer Confidence data release. Today's recommendation: BBNI, WSKT, MAPI, JSMR.
Corporate Action
Cum Dividend Date: TOWR (IDR22.69/share), SMSM (IDR10/share)
Right Issue: AGRS (IDR170/share)
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