Global Market Highlight
DJIA rose by +0.19% on Tuesday (12/01) followed by S&P 500 (+0.04%) and Nasdaq (+0.28%). Investors were responding to the rollout of Covid-19 vaccines and remedies while watching House Democrats in Congress moved toward a second impeachment of President Trump over accusations he incited supporters to storm the Capitol. Meanwhile, several major tech giants continued to fall after taking action to block President Donald Trump's accounts ahead of President-elect Joe Biden's inauguration. Moreover, the market will look forward to several data releases today, such as: 1) US Core Inflation Rate; 2) Eurozone Industrial Production; 3) Germany Wholesale Price.
Domestic Update
• Retail sales in Indonesia slumped by 16.3% YoY in November 2020, (vs -14.9% YoY in October 2020).
• Furthermore, there was an addition of 2,669 new Covid-19 cases in Jakarta yesterday.
Company News
1. TOWR IJ has allocated a capex budget of around IDR3.25 trillion in FY21E, which will be financed internally from operating cash flow. Around 60% of capex will be allocated to support organic tower growth and 40% to expand its fiberization and connectivity (Kontan). MNCS Comment: We expect TOWR to increase its colocation and record a better performance in FY21E with 8% YoY target of revenue. Currently TOWR is trading at 19.15x/5.03x PE/PBV.
2. INDY IJ targets coal production at the beginning of this year to be 31.4 million tons. This production came from PT Kideco Jaya Agung amounting to 30 million tons, while PT Multi Tambangjaya Utama (MUTU) amounted to 1.4 million tons. In addition, INDY also focuses on and strengthens its commitment to developing a sustainable and responsible business through the implementation of ESG (Environmental, Social, and Governance) in all company operational activities (Kontan). MNCS Comment: We see that INDY has set a 10% lower target on Kideco from previously 33 million tons in FY20. While we hope that the proposal of operating permit of Kideco this year will be granted by the government, as Kideco is one of the largest coal miners in Indonesia. INDY is currently trading at -9.08x/0.85x PE/PBV.
3. MDKA IJ continued exploration activities in three different areas in Indonesia (Tujuh Bukit in East Java, Wetar Island in Southwest Maluku, and Pani in Gorontalo) in December 2020. MDKA has spent IDR24.93 billion for exploration activities (Emitennews).MNCS Comment: MDKA seems to have used a relatively large budget for exploration, regarding the budgeted capex only amounting to USD80 million. But we hope that MDKA's mine will continue to develop, while there is a minor incident at one of the mines last year, however MDKA's performance will still be decent in FY20. MDKA is trading at the level of 48.41x/6.79x PE/PBV.
IHSG Updates
JCI rose by +0.20% to 6,395.67 on Tuesday (12/01) followed by net foreign buy reaching IDR995.14 billion. JCI seemed to keep on hiking supported by property, finance and mining sectors as we see that investors are still in the optimism of vaccination that will begin on Wednesday, which brings hope of a better outlook in the future. Meanwhile, the Rupiah exchange rate was weakening at IDR14,130. We estimate JCI will move in the range of6,200 – 6,400 while waiting for balance of trade and consumer confidence data release. Today's recommendation: AKRA, UNTR, PWON,RALS.
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