MNCS Morning Navigator 18 December 2020

Global Market Highlight

DJIA rose by +0.49% on Thursday (17/12) followed by S&P 500 (+0.58%) and Nasdaq (+0.84%). Stimulus is still the main driving force for the market as congress has reached a stimulus agreement worth USD900 billion which includes direct cash assistance. However, the stimulus package has not included assistance for businesses and local governments - two triggers for differences between Democrats and Republicans. The stimulus became even more urgent after data on weekly jobless benefits claims showed 855,000 new unemployed people last week, the highest level since September. Moreover, the market will look forward to several data releases today, such as: 1) US Current Account; 2) UK Consumer Confidence; 3) Japan Interest Rate Decision.

Domestic Update

• BI decided to maintain the 7-Day Reverse Repo Rate (BI7DRR) at 3.75%, the Deposit Facility rate at 3.00%, and the Lending Facility rate at 4.50%. This decision is consistent with forecasts for low inflation and maintained external stability, as well as efforts to support economic recovery. Bank Indonesia strengthens policy synergies and supports various further policies to build optimism for national economic recovery, through the opening of productive and safe economic sectors for Covid-19, accelerating fiscal stimulus, channeling banking credit from the demand and supply side, continuing monetary and macroprudential stimuli, and accelerate economic and financial digitization.
• Furthermore, there is an additional of 1.690 new Covid-19 cases in Jakarta yesterday.

Company News

1.        ASII IJ car sales slipped by -7.15% MoM to 24,425 units in November 2020. Meanwhile, sales of non-Astra cars grew by 30.13% MoM to 29,419 units. Hence, ASII's car market share, in domestic market in November, dropped to 45%, from 54% in October, followed by LCGC cars, in domestic market in November, also dropped to 48%, from 65% previously in October (IDN Financials). MNCS Comment: ASII's market share dropped quite significantly as other brands share increases, we hope it will recover in December as ASII's automotive revenue contributed around 35%. ASII is currently traded at 13.41x/1.62x PE/PBV.
2.        HRUM IJhas bought 39 million of Nickel Mines Ltd shares amounting to IDR393 billion. HRUM has 4.88% of ownership in the nickel company located in Australia. While HRUM also set a capex target of USD8 million in FY21F (Investor Daily). MNCS Comment: HRUM's strategy to differentiate is decent as the company can now get another revenue stream from nickel which is high in demand for EV. HRUM is currently traded at 13.92x/1.84x PE/PBV.
3.        IRRA IJ posted revenue of IDR141.06 billion which rose by 9.4% YoY in 9M20. Revenue consist of Non-Electromedical Medical Devices or Syringes (+19.3% YoY) and In Vitro Diagnostic Products (+6.5% YoY). Meanwhile, net profit rose higher by +46.4% YoY to IDR9.03 billion (IDN Financials). MNCS Comment: IRRA's decent performance is supported by an increasing demand on syringes as it is used for test and vaccine. We believe the upcoming performance will be even better with the vaccination program next year. IRRA is currently traded at 201.36x/13.88x PE/PBV.

IHSG Updates

JCI dropped slightly by -0.08% to 6,113.38 on Thursday (17/12) whilefollowed by net foreign buy reaching IDR332.63 billion. JCI's drop is quite fair as JCI has soared, so the healthy correction is predictable. Moreover, almost all sectors fell while property sector still strengthened along with the release of BI7DRR which maintained at 3.75%. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,108. We estimate JCI will move in the range of 6,000 – 6,220 while waiting for motorbike sales data release. Today's recommendation: AALI, SSIA, SMGR, EXCL.

Corporate Action

IPO: PMMP (IDR336/share)

RUPS: SOCI, DEWA

Disclaimer On

AALI, SSIA, SMGR, EXCL