Global Market Highlight
DJIA slipped by (-0.25%) on Monday (14/06) while S&P 500 rose by (+0.18%) followed by Nasdaq (+0.74%). Wall Street closing was varied as investors were focused on this week’s Federal Reserve's meeting. And also, the market is seeking a new cause from the central bank on its inflation outlook. The market will look forward to several data releases today, such as: 1) US Retail Sales MoM; 2) Germany Inflation Rate YoY Final; 3) UK Employment Change.
Domestic Update
• Statistics Indonesia will release international trade data this morning at 11:00 AM. Consensus estimates for export will rise 57.49% YoY and import will increase 65% YoY causing a USD 2.3 bio surplus on a trade balance in May 2021. MNCS Comment: Rising export is likely due to : 1) low base effect; 2) rising global demand; 3) surging commodity price. Meanwhile increasing import is supported by : 1) low base effect; 2) rising domestic consumption dan investment. We see this as a positive signal that could bring Indonesia’s economy out of recession in the 2Q21. Trade balance surplus also indicates that foreign reserves remain ample thus supporting rupiah fundamentals.
• Financial System Stability Committee (KSSK) plans to intervene in the slow starter as its financial performance has been deteriorated by Covid-19 pandemic. It was stated by Minister of Finance Sri Mulyani in the coordination meeting with the house (DPR) yesterday (14/6/21). MNCS Comment: In 1Q21, both the slow starter & growth driver sector’s output remained in a negative territory indicating a patchy economic recovery. The slow starter & growth driver sector’s interest coverage ratio (ICR) has been under 1.5x indicating that companies have difficulty to service its debt. In addition these sectors have been experiencing hikes in NPL.
•Furthermore, there was an addition of 1,652 new Covid-19 cases in Jakarta yesterday.
Company News
1. MTDL IJ through its subsidiary PT Synnex Metrodata Indonesia (SMI) added a new partner by becoming the official distributor of TEAM Group Inc. This collaboration aims to meet the ever-increasing demand for gaming consoles, PCs, and notebooks followed by the demand for computer components. According to Newzoo's report, the gaming market will reach USD189.3 billion in FY21E. MTDL will offer Memory, Flash & Components, T-Force, T-Create, Team Flash Card, and Team USB Drive (Kontan). MNCS Comment: The addition of strategic partners is one of MTDL's efforts to capture the current gaming market opportunities. MTDL's success in capturing gaming market opportunities along with a capex allocation of IDR40 billion will support the achievement of the revenue target of 8% YoY and net profit of 10% YoY in FY21E. MTDL is trading at 8.83x/1.75x PE/PBV.
2. WSKT IJ will build a Mini-hydro Power Plant (PLTM) Batang Toru 3 with a capacity of 2x5 megawatts (MW). This power plant is located on the Batang Toru River, Pahaejulu, North Tapanuli, North Sumatra. The contract is worth IDR377 billion with a total capacity of 10 MW to be built. PLTM Batang Toru 3 2x5 MW, is a form of cooperation program between PLN and Terregra Asia Energy (CNBC Indonesia). MNCS Comment: WSKT continues to work on improving the company's finances, and optimizing the current tender. WSKT is currently trading at 1.91x PBV.
3. WTON IJ successfully recorded new contracts of IDR1.99 trillion in 5M21. The contract gain was up 74.56% YoY (vs IDR1.14 trillion in 5M20). The new contracts come from the high speed railway of IDR666.57 billion, the Serpong-Balaraja toll road project of IDR88.97 billion, the Bogowonto River estuary safety project of IDR80.14 billion. WTON has achieved around 25% of its new FY21E contract target of IDR8.02 trillion (Kontan). MNCS Comment: The new contract is starting on track in line with the need for precasts for several ongoing projects. WTON is expected to be able to take advantage of contracts originating from the parent company or independently. Currently WTON is trading at 26.87x/0.74x PE/PBV levels.
IHSG Updates
JCI fell by (-0.25%) to 6,080.38 on Monday (14/06) while net foreign buy reaching IDR333.90 billion. JCI was weakened along with most sectors, led by industrial (-2.27%), transport (-1.94%), and non cyclical (-1.51%). On the other hand, the technology sector managed to strengthen by (+11.86%), followed by property (+2.38%), and health (+0.29%). The concern towards the rising Covid-19 case still weighed on the JCI movement. Meanwhile, the Rupiah exchange rate was weakening at IDR14,202. We estimate JCI will move the range of 6,030-6,120 while waiting for Balance of Trade data release. Today's recommendation: BBRI, MDKA, ELSA, MYOR.
Corporate Action
Cum Dividend Date: SPMA (IDR15/share), LINK (IDR102.7/share)
RUPS: BPII
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