MNCS Morning Navigator 19 May 2020

1. The government stated that the 2020 State Budget (APBN) deficit is at 6.27% GDP. This is due to the further impact of the Covid-19 making the state budget more fragile. As for the nominal budget deficit this year widens to IDR1,028.5 trillion, previously the government had set a deficit of 5.07% of GDP or equivalent to IDR852.9 trillion. Moreover, the interest subsidy for Micro, Small and Medium Enterprises (MSMEs) reached IDR34.2 trillion, the discounted electricity tariff reached IDR3.5 trillion, and cash social reaching IDR19.62 trillion. Also State-Owned Enterprises (SOEs) aid fund reached IDR149.29 trillion which is allocated for subsidies, compensation, State Capital Participation (PMN), bailout funds for working capital, and social assistance. Funding a deficit of 6.27% will be done through financing and procurement of SBN that has been regulated in SKB of the Ministry of Finance with Bank Indonesia.
2. BI will announce Interest Rate Decision today whilst the consensus estimates that there will be another 25 bps cut. The current interest rate is 4.50% and it is predicted to be lowered to 4.25%. This will be revealed after the BI meeting. Some sectors might be affected by this decision such as: 1) Banking; 2) Property; 3) Automotive; 4) Telecommunication.

1. HMSP will distribute IDR13.9 trillion of dividend in FY20E. The FY19 net profit amounting to IDR13.7 trillion which means that the dividend payout ratio reached 101.46%. Dividend per share amounted to IDR119.8/share with dividend yield at 6.42%. The payout date is yet to be announced. HMSP remains the market leader with 32.2% market share and sales volume reaching 98.5 billion unit in FY19. (Kontan) 
2. ERAA booked an increase on revenue by 9.58% YoY to IDR7.80 trillion on 1Q20 from IDR7.12 trillion in 1Q19. The revenue is dominated by sales of cellular phones and tablets (76.09%), vouchers (13.56%), accessories (6.36%), computers and electronic equipment (3.99%). Besides, other income rose by 33.89% to IDR42.87 billion followed by financial income grew by 143.9% to IDR623.32 million. So net profit is towering at IDR102.7 billion (+116.78% YoY) from IDR47.38 billion in 1Q19.(Kontan)  
3. KLBF will be distributing dividend amounting to IDR937.5 billion. Dividend per share is at the level of IDR20/share, so the dividend yield is at 1.43%. Dividend payout ratio is 37.3% while historically was at the level of 49% - 50%, the decline in the ratio occurred due to uncertainty due caused by Covid-19 that hit Indonesia. (Kontan)  

ASII, BBRI, PGAS, TLKM, HMSP, ERAA, KLBF