MNCS Morning Navigator 10 December 2020

Global Market Highlight

DJIA lowered by -0.35% on Wednesday (09/12) followed by S&P 500 (-0.79%) and Nasdaq (-0.38%). Profit-taking by investor in the technology sector is holding global stock market gains on hold. In addition, investors are still watching the direction of the jumbo stimulus talks that has not come to an agreement. Republicans and Democrats are working to pass additional aid. Meanwhile, amid the surge in Covid-19 patients in the US, the UK started vaccinating the public using the Pfizer vaccine. However, there have been reports that this vaccine has resulted in allergies to the first batch of vaccine recipients. Moreover, the market will look forward to several data releases today, such as: 1) US Core Inflation Rate; 2) UK GDP; 3) Eurozone ECB Interest Rate Decision.

Domestic Update

• BI Consumer Survey indicates that consumer confidence in economic conditions is improving, reflected in the November 2020 Consumer Confidence Index (IKK) of 92.0, an increase compared to 79.0 in the previous month. The improvement in consumer confidence in November 2020 was driven by improving consumer expectations for future economic conditions, namely an increase in business activity expansion and an increase in income and job availability in the next 6 months.
• The Ministry of Finance reported that 2020 State Budget (APBN) expenditure has been allocated for social protection amounting to IDR233.69 trillion (33.6% of the PEN program) and realized by 88.9% as reported in 25 November 2020. The realization breakdown is as such: 98.2% from the social protection program, 95.6% from the basic food card program through BPNT, IDR6.95 trillion from the Jabodetabek food package program, 99.5% from the pre-employment card program, IDR32.8 trillion from the non-Jabodetabek cash assistance program, 61.2% from the village fund direct cash assistance (BLT), 100% from the cash social assistance program for non-PKH basic food recipients, and IDR4.5 trillion from the rice social assistance program for PKH recipients.
• Furthermore, there is an additional of 1.237 new Covid-19 cases in Jakarta yesterday.

Company News

1.        DOID IJ posted revenues of USD494.17 million in 9M20, a decrease of 28.42% YoY. On the other hand, a number of DOID's cost decreased such as cost of revenue(-24% YoY), operating expenses (-41.05% YoY), financial expense (-12.30% YoY). However, DOID still posted a net loss of USD3.69 million in 9M20 (Kontan). MNCS Comment: DOID's loss was due to an increase on other expenses and loss on forex in which the USD is currently weakening, touching the lowest point in 2.5 years. But we hope the recovering coal price due to increasing winter demand will revive DOID's 4Q20 performance. DOID is currently traded at  0.88x PBV.
2.        MCAS IJ booked an increase of 12.58% on 9M20 revenue to IDR8.86 trillion. But cost of revenue as well as general and administrative expenses increase by 1.11% YoY/5.21% YoY respectively followed by losses on investment and subsidiaries. This has caused a drop of 58.52% YoY on net income to IDR61.64 billion in 9M20 (Investor Daily). MNCS Comment: We hope that the upcoming business which is DigiResto will be beneficial as food and beverage deliveries are on demand currently. MCAS is currently traded at 92.87x/5.75x PE/PBV.
3.        BLTZ IJ has reopened all of its seven cinemas in Jakarta, while the reopening is in accordance with the Jakarta Municipal Government's technical team's assessment. As the cinemas are open during large-scale social restrictions, the company said it will adhere to health protocols which include mandatory use of face masks, customer tracking, reduction of seat capacity, and routine sterilization. The first four CGV cinemas in Jakarta were reopened in October 2020, followed by one in November and two in December (IDN Financials). MNCS Comment: With the reopening, BLTZ would be able to revive their performance which suffered during the pandemic as cinemas were not allowed to operate. BLTZ is currently traded at 2.90x PBV.

IHSG Updates

JCI went up by +0.23% to 5,944.41 on Tuesday (07/12) though followed by net foreign sell reaching IDR737.20 billion. JCI is still on the vaccine euphoria, supported by a positive increase on consumer confidence for the upcoming economic, while the market was closed on Wednesday due to regional election day. Meanwhile, the Rupiah exchange rate was weakening at IDR14,110. We estimate JCI will move in the range of 5,563 – 5,960 while waiting for retail sales data release. Today's recommendation: ASII, BBCA, CPIN, WIKA.

Corporate Action

RUPS: BRAU, BMSR

Disclaimer On

ASII, BBCA, CPIN, WIKA, DOID, MCAS, BLTZ