Global Market Highlight
DJIA rose by +0.58% on Wednesday (17/03) followed by S&P 500 (+0.29%) and Nasdaq (+0.40%).Wall Street rose with the S&P 500 and Dow hitting records with gains on tech stocks after bond yields were toned down as the Fed said it was in no hurry to lift rates despite signs the recovery is taking shape. Moreover, the market will look forward to several data releases today, such as: 1) US Fed Interest Rate Decision; 2) US FOMC Economic Projections; 3) US Initial Jobless Claims.
Domestic Update
• PUPR Ministry stated that the budget allocation for labor-intensive programs this year has increased. Initially, the budget allocation for labor-intensive programs was IDR12.18 trillion, now it has become IDR23.24 trillion. In addition, there are proposals for an additional IDR2.5 trillion budget. The budget will focus on several things such as the water resources, the road and bridge, and the property sector to absorb 1.23 million workers. Until March 16, 2021, budget absorption has reached 15.29%
• Furthermore, there was an addition of 1,330 new Covid-19 cases in Jakarta yesterday.
Company News
1. PTPP IJ posted revenue of IDR15.83 trillion in FY20 or decreased 32.83% YoY (vs IDR23.57 trillion in FY19). However, COGS also decreased by 32.58% YoY to IDR13.66 trillion in FY20. PTPP posted a net profit of IDR128.75 billion in FY20 which decreased 84.29% YoY (vs IDR819.46 billion in FY19) (Kontan). MNCS Comment: The decrease in PPRO's net profit was due to the increase in several costs, such as the cost of funds. However, at least PPRO could record growing revenue amidst a challenging business in FY20. Currently PTPP is trading at 78.49x/0.95x PE/PBV.
2. PPRO IJ posted revenue of IDR2.07 trillion in FY20 or increased 27.77% YoY (vs IDR1.62 trillion in FY19). However, COGS also increased by 47.71% YoY to IDR1.74 trillion in FY20. PPRO posted a net profit of IDR89.04 billion in FY20 which decreased 64.33% YoY (vs IDR249.68 billion in FY19) (Bisnis.com). MNCS Comment: The FY20 performance realization fell along with the average construction companies. However, we believe in FY21E the performance of construction destruction will improve as infrastructure tenders begin to recover. PPRO is currently trading at 48.38x/1.23x PE/PBV.
3. NIKL IJ recorded revenue of USD144.73 million or down -11.25% YoY (vs USD163.08 million in FY19). NIKL's revenue was still dominated by the domestic market amounting to USD143.51 million, while export sales were USD1.21 million. NIKL's net profit in FY20 reached USD2.71 million or increased + 1.41% YoY (vs USD2.68 million in FY19) (Kontan). MNCS Comment: We hope that the performance in FY21 will be better along with higher ASP and demand. NIKL is trading at 79.10x/4.46x PE/PBV.
IHSG Updates
JCI fell by -0.51% to 6,277.23 on Wednesday (17/03) followed by net foreign buy reaching IDR211.49 billion. JCI fell amid the earnings season as many companies' performances dropped during the pandemic last year. Furthermore, the agriculture sector led the decline while miscellaneous industry, infrastructure and basic industry managed to increase. Meanwhile, the Rupiah exchange rate was weakening at IDR14,428. We estimate JCI will move in the range of 6,160-6,400 while waiting for the BI interest rate decision. Today's recommendation: INDF, INDY, WSBP, JPFA
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