MNCS Morning Navigator 14 August 2020

Global Market Highlight

DJIA dropped by -0.29% on Thursday (13/08) followed by S&P 500 (-0.20%) while Nasdaq rose by +0.27%. US stocks slipped despite the initial jobless claim data fell to 963,000 which showed a potentially signaling that the pace of recovery in the labor market is starting to pick up.  Meanwhile, market are also concerned that the expiration last month of the extra US600 in weekly unemployment benefits is likely to leave less money in workers' pockets.Moreover, the market will look forward to several data releases today, such as: 1) US Retail Sales; 2) US Michigan Consumer Sentiment; 3) Eurozone 2Q GDP Growth.

Domestic Updates

The Ministry of Finance released several strategies to accelerate economic growth. This is done to support the 3Q20 to grow positively and avoid recession. The three strategies prepared are as follows: 1) Accelerating the execution of the National Economic Recovery (PEN) program; 2) Strengthening government consumption one of which is the acceleration of the disbursement of the 13th salary; 3) Improving people’s purchasing power by increasing the amount of social protection spending and extending the period.

Company News

1. ALDO IJ announced that it will distribute dividends of IDR1.21 billion or equals to 2.15% dividend payout ratio. Dividend per share remains at IDR1.1 per share, the same amount as the previous year though last year’s payout ratio was higher at 4.99%. Dividend yield is at the level of 0.28%. Management estimates revenue and net profit can reach IDR1.1 trillion and IDR66 billion respectively in FY20E. MNCS Comment: Despite a 233.33% YoY growth in FY19 net income, ALDO maintains the dividend amount. While management seems to be optimisitic, 1H20 bottom line has decreased by 21.74% YoY. ALDO is currenlty traded at 11.56x/0.98x PE/PBV.
2. MBAP IJ plans to distribute dividends worth IDR 439.36 billion or IDR357 per share on August 31, 2020. The amount equals to 89.41% of FY19 net profit with yield at 15.73%. The cum dividend will be on August 24, 2020. MNCS Comment: Although MBAP recorded a 32.65% YoY net income drop in FY19, they seem to be continuing to distribute their final dividend, which is the largest amount so far, and with a relatively high dividend yield which is quite interesting for investors. MBAP is currently traded at 4.08x/1.19x PE/PBV.
3. BMTR IJ plans to do a private placement with a value of IDR140 billion on August 24, 2020. The company will issue 700 million new shares with an exercise price of IDR200 per share. This was a result of the affect that was brought on to the company perfromance by the Covid-19 pandemic. PSBB was causing the income of most industries to fall and forcing companies to make spending efficiency, including cutting advertising budget, which impacted the subsidiary. MNCS Comment: We see that the exercise price is 24% lower than yesterday’s closing price at IDR248. Meanwhile the management is quite optimistic that the 3Q20 performance will comeback stronger. BMTR is curently traded at 3.45x/0.43x PE/PBV.

IHSG Updates

JCI increase by +0.11% to 5,239.25 on Thursday (13/08) followed by net foreign buy reaching IDR281.72 billion. Still on it's consecutive rally this week amid the various movement from regional Asia and global indices. The strengthening was supported by various stimulus from the Government such as the national economic recovery fund. Meanwhile, the large social restriction transition is being extended until 27th of August 2020 and then the government will decide whether to extend the regulation again or cut them off, based on the Covid-19 cases development that will be evaluated during the transition. Moreover, the Rupiah exchange rate was weakening at IDR14,775. We estimate JCI will move in the range of 5,170-5,280 while waiting for the release of balance of trade data. Today's recommendation: UNTR, GGRM, AALI, BBRI.

Corporate Action

Cum Dividend: MTLA, RUIS

RUPS: RALS

Disclaimer On

UNTR, GGRM, AALI, BBRI, ALDO, MBAP, BMTR