Global Market Highlight
DJIA slipped by -0.16% on Monday (17/05) followed by S&P 500 (-0.25%) and Nasdaq (-0.38%). Wall Street weakened as investor's favor on cyclical stocks against growth stocks continued amid fears inflation could force the Federal Reserve into action sooner rather than later. The Fed Vice Chair ensured that the jump in inflation seen in the April data last week was likely driven by transitory factors. On the other hand, the April employment report has not made substantial further progress, reiterating that it was yet too early to talk about the Fed scaling back bond purchases. Moreover, the market will look forward to several data releases today, such as: 1) US Overall Net Capital Flows; 2) Japan GDP Growth; 3) UK Employment Change.
Domestic Update
• The government stated that the realization of the National Economic Recovery (PEN) budget had reached almost 25% of the budget. The realization of the economic recovery fund until May 11, 2021 was IDR172.35 trillion or 24% from the total budget of IDR699.43 trillion and has increased in several sectors (Kontan).
• Bank Indonesia (BI) noted that the total cash withdrawals by banks nationwide until May 11, 2021, the last operational day before the Lebaran holiday, reached IDR154.5 trillion, which is an increase of 41.5% YoY. BI has predicted an increase in demand for currency in the Eid period this year in line with the assumption of economic growth and increased mobility of the people (Kontan).
• Furthermore, there was an addition of 421 new Covid-19 cases in Jakarta yesterday.
Company News
1. CTRA IJ posted revenue of IDR1.85 trillion in 1Q21, which is an increase of +23.30% YoY (vs IDR1.50 trillion in 1Q20). However, COGS also increased from IDR801.52 billion to IDR920.93 billion in 1Q21. CTRA posted a net profit of IDR243.37 billion in 1Q21 which increased +37.11% YoY (vs IDR177.50 billion in 1Q20) (IQ PLUS). MNCS Comment: This realization was supported by quite good marketing sales in 1Q21 which grew by more than 30% YoY. CTRA has the potential to record a positive trend in FY21E. CTRA is trading at 21.07/1.32x PE/PBV.
2. JPFA IJ posted revenue of IDR10.76 trillion in 1Q21, which is an increase of + 11.57% YoY (vs IDR9.65 trillion in 1Q20). However, COGS also increased from IDR7.82 trillion in 1Q20 to IDR7.97 trillion in 1Q21. JPFA posted a net profit of IDR858.66 billion in 1Q21 which increased +149.70% YoY (vs IDR343.87 billion in 1Q20) (CNBC Indonesia). MNCS Comment: We expect solid performance to be maintained in FY21E supported by a recovery in demand in line with the massive vaccination rate. In addition, efficiency in several costs such as marketing and administration costs will encourage better margins. JPFA is currently trading at 6.66/1.98x PE/PBV.
3. HRUM IJ posted revenue of USD57.08 million in 1Q21, which is down -6.72% YoY (vs USD61.19 million in 1Q20). However, COGS also fell from USD43.94 million in 1Q20 to USD30.62 million in 1Q21. HRUM posted a net profit of USD17.61 million in 1Q21 which increased significantly (vs USD821.37 thousand in 1Q20) (Kontan). MNCS Comment: HRUM efficiency strategy has improved the bottom line despite the drop on the top line. We see that the -13.4% YoY drop on the coal sales volume has caused the decrease, though ASP rose by 38.2% QoQ. Currently HRUM is trading at 15.01x/2.73x PE/PBV.
IHSG Updates
JCI fell by -1.76% to 5,833.86 on Monday (17/05) followed by net foreign buy reaching IDR52.03 billion. The JCI weakened at the opening of trading this week due to fears of a spike in Covid-19 cases in Indonesia after this year's Eid al-Fitr holiday, adding to another negative sentiment, where there were more than 1.5 million people going home before and after the Eid al-Fitr holidays. The defeat came in line with the existence of a new variant of Covid-19 originating from India as well as stagnation in the distribution of several vaccines which caused side effects. Meanwhile, the Rupiah exchange rate was weakening at IDR14,282. We estimate JCI will move in the range of 5,750-5,900 while waiting for Balance of Trade data release. Today's recommendation: TLKM, ANTM, INDY, JPFA.
Corporate Action
Cum Dividend Date: ROTI (IDR48.49/share)
Public Expose: GHON
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