MNCS Morning Navigator 09 November 2020

Global Market Highlight

DJIA fell by -0.24% on Friday (06/11) followed by flat movements from S&P 500 (-0.03%) and Nasdaq (+0.04%). Stocks fell flat as the market priced in the uncertainty on the US election and the outcome of a divided government, whereas there will be a continuation of political gridlock and no meaningful changes on tax policy. To be sure, a divided government could make it harder for lawmakers to push through new fiscal stimulus. Moreover, the market will look forward to several data releases today, such as: 1) US Consumer Inflation Expectations; 2) Japan Foreign Exchange Reserve; 3) Germany Balance of Trade.

Domestic Update

BI releases position of Indonesia's foreign exchange reserves as of October 2020 at USD133.7 billion. It remains high, although it decreased compared to the position at the end of September 2020 of USD135.2 billion. The position of foreign exchange reserves is equivalent to financing 9.7 months of imports or 9.3 months of imports and servicing of government external debt, and is above the international adequacy standard of around 3 months of imports. Bank Indonesia considers that the foreign exchange reserves are capable of supporting external sector resilience and maintaining macroeconomic and financial system stability.

Company News

1.       PTBA IJ posted revenue of IDR12.8 trillion in 9M20 which dropped by -20.94% YoY. This is because coal sales volume decreased 9% YoY to 18.6 million tonnes. Thus, PTBA posted a net profit of IDR1.7 trillion in 9M20 which decreased by -44% YoY (Market Bisnis). MNCS Comment: We note that PTBA still recorded a positive bottom line amid the troubled time. The drop on coal sales was due to import restriction implemented by some countries which resulted in the coal price sunk. But we still believe in the long term potential upside from the downstreaming project. PTBA is currently traded at 8.89x/1.45x PE/PBV.
2.        IPCM IJrevenue increased by 3.8% YoY to IDR510.2 billion in 9M20. The largest revenue is obtained from ship services which consist of towage services and pilotage services while deferment service revenue amounted to IDR448.5 billion contributed 87.9% of total revenue. Furthermore, Terminal For Own Interest (TUKS) revenue increased by 25.1% YoY  followed by Special Terminal (Tersus) which also increased sharply by 31.2% YoY. IPCM managed to record a net profit of IDR69.7 billion which rose by 1.3% YoY in 9M20 (Market Bisnis). MNCS Comment: We see that IPCM's strategy to increase revenue from non public ports has resulted in a good and strong performance. IPCM is currently traded at 12.84x/1.09x PE/PBV.
3.        GIAA IJ revenue also reached USD1.13 billion as of 3Q20 which drop -68.08% YoY. The main reason for the decline is the -67.13% YoY drop in revenue from scheduled flights, which is the company's main source of revenue. While unscheduled flights fell considerably by -81.23% YoY. However, operating expenses were successfully reduced  by 31.7% YoY. But GIAA still recorded a net loss of USD1.07 billion in 3Q20 which is inversely proportional to the net profit of USD122.42 million in 3Q19 (Market Bisnis). MNCS Comment: Aviation and hospitality sector has not risen from the pandemic effect while we see that it will slowly recover with the gradual mobility.

IHSG Updates

JCI soared by +1.43% to 5,335.53 on Friday (06/11) followed by net foreign buy reaching IDR827.79 billion. JCI rose followed by foreign net buys for two days in a row which was supported by Biden's victory. One of the supporting stocks is ASII, which remains as the investors pick as ASII has diversified into commodity business such as coal and gold. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,210. We estimate JCI will move in the range of 5,200 – 5,382 while waiting for Consumer confidence data release. Today's recommendation: GGRM, AALI, EXCL, SMRA.

Corporate Action

RUPS: CPDW, BSWD

Rights Issue: CMNP

Cum Dividend Date: ITMG

Disclaimer On

GGRM, AALI, EXCL, SMRA, PTBA, IPCM, GIAA