Global Market Highlight
DJIA increased by +0.97% on Monday (08/03) followed by the weakening of S&P 500 (-0.54%) and Nasdaq (-2.41%).Wall Street closing was mixed with Dow Jones closed higher as reopening stocks like industrials and financials strengthened ahead of the USD1.9 trillion fiscal boost that is expected to pass this week and fuel a very strong economic recovery. While the sharp hike in rates continued to weigh on tech stocks. Moreover, the market will look forward to several data releases today, such as: 1) US Eurozone GDP Growth Rate; 2) Japan GDP Growth; 3) Germany Balance of Trade.
Domestic Update
• BI released the Consumer Survey per February 2021 in which the Consumer Confidence Index (IKK) was recorded at 85.8. This indicates improving public confidence in economic conditions. Meanwhile, consumer expectations of future economic conditions remain positive and relatively stable.
• Furthermore, there was an addition of 1,783 new Covid-19 cases in Jakarta yesterday.
Company News
1. JSMR IJ will budget capital expenditures of IDR5 trillion - IDR7 trillion to finance the construction of three toll road projects, namely: 1) JORR II [Jakarta Toll Road Outer Ring Road]; 2) Manado-Bitung; 3) Balikpapan-Samarinda. The funding sources of this capex will come from the issuance of bonds, bank loans and from the proceeds of toll road divestment (CNBC Indonesia). MNCS Comment: The toll road financing will increase the company's DER. However, JSMR's plan to divest several toll roads through SWF worth IDR3 trillion - IDR5 trillion as one of the strategy to improve cash flow and restructure the company's financing. Currently JSMR is trading at 148.52x/1.66x PE/PBV.
2. ARNA IJ recorded sales of IDR2.21 trillion in FY20 or +2.79% YoY while net profit was recorded at IDR323.01 billion in FY20 or +49.87% YoY. ARNA is committed to paying cash dividends of IDR30.00 per share with a total value of IDR217.67 billion or 67% of total profit (Bisnis Indonesia). MNCS Comment: We believe ARNA is able to maintain its performance in FY21E with earnings growing 30% YoY. Efficiency in the use of raw materials, energy costs and fixed costs will support strong margins. ARNA is currently trading at 17.50x/4.40x PE/PBV.
3. TBLA IJ recorded revenue of IDR10.86 trillion in FY20 (+27.31% YoY, vs IDR8.53 trillion FY19). The plantation segment contributed IDR903.3 billion of total revenue, while the manufacturing segment contributed IDR15.63 trillion. Meanwhile, the cost of goods sold increased to IDR8.23 trillion (vs IDR6.43 trillion in FY19). Thus, TBLA posted a net profit of IDR678.02 billion in FY20 (+2.29% YoY, vs IDR662.82 billion FY19) (Bisnis Indonesia). MNCS Comment: TBLA managed to book a resilient performance in FY20 which we believe is still supported by the increase in CPO price despite TBLA's business industry focus mainly on food and beverages. TBLA is trading at 7.45x/0.86x PE/PBV.
IHSG Updates
JCI dropped by -0.16% to 6,248.46 on Monday (08/03) followed by net foreign sell reaching IDR469.41 billion. JCI weakened in line with the Asian indices despite the rise on the global market. On the other hand, the majority of the sectors still rose with agriculture leading the increase due to a slight rise in CPO price. Meanwhile, the Rupiah exchange rate was weakening at IDR14,360. We estimate JCI will move in the range of 6,200-6,330 while waiting for retail sales data release. Today's recommendation: PGAS, SSMS, KLBF, MEDC.
Corporate Action
RUPS: IBST, TBIG
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