Global Market Highlight
DJIA slipped by -0.78% on Tuesday (18/05) followed by S&P 500 (-0.85%) and Nasdaq (-0.56%). Wall Street fell again on sharp selling as tech stocks weakened and energy shares were dragged lower by falling oil prices on fears an Iran nuclear deal will boost global oil supplies. On the economic front, housing data that fell short of economists' forecast was largely ignored as home-building activity remains elevated. While President Biden's fiscal agenda was also back in the spotlight as Treasury Secretary Janet Yellen backed a reform of the corporate tax system to fund the president's infrastructure plan. Moreover, the market will look forward to several data releases today, such as: 1) US MBA Mortgage Applications; 2) UK Core Inflation Rate; 3) Eurozone Core Inflation Rate.
Domestic Update
• The Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance (Kemenkeu) is targeting total debt to reach IDR323.4 trillion in 2Q21. This amount consists of government bonds (SUN) amounting to IDR194.6 trillion, prioritizing the issuance of SUN through auction, issuance of Samurai Bonds, and private placements for special purposes. Then, through the issuance of debt through state sharia securities (SBSN) IDR 108.4 trillion, primarily through auctions and issuance of foreign currency sukuk. And debt originating from the loan is targeted at IDR20.4 trillion (Kontan).
• Furthermore, there was an addition of 291 new Covid-19 cases in Jakarta yesterday.
Company News
1. IPCC IJ posted revenue of IDR356.53 billion in FY20, which is down -31.85% YoY (vs IDR523.21 billion in FY19). However, the cost of revenue also decreased from Rp305.57 billion in FY19 to IDR280.82 billion in FY20. The IPCC posted a net loss of IDR23.77 billion in FY20 (vs a net profit of IDR135.30 billion in FY19) (Bisnis.com). MNCS Comment: The decline in the IPCC financial report is due to the export and import of vehicles in Indonesia, but the incentives for vehicle purchases by the government are expected to help the IPCC in FY21. IPCC is trading at 0.90x PBV.
2. PTPP IJ get two new contracts in 1Q21 engaged in the health sector, namely the construction of the Banten Regional Hospital and the Krian Regional Hospital. Banten Regional Hospital construction project has a contract value of IDR265 billion. Meanwhile, the Krian Regional Hospital project has a contract value of IDR130 billion. In addition, PTPP also won a tower construction project at Sebelas Maret University (IQ PLUS). MNCS Comment: PTPP will try to optimize new contracts from SOEs and ROEs. PTPP is also reviewing the divestment of one of its assets in FY21. PTPP is currently trading at 56.58/0.69x PE/PBV.
3. EXCL IJ recorded an increase in data service traffic by +35% in the Lebaran 2021 period compared to the previous Eid al-Fitr period, and +15% compared to normal days before Ramadan. During Ramadan and Lebaran, data traffic is dominated by streaming, reaching 85%, followed by social networking at 8% (Kontan). MNCS Comment: EXCL performance is getting better during the Eid period in line with data traffic growth which is higher than +25% in the Eid period in FY20. We estimate that the performance in 2H21E will be better supported by the increase in data traffic, especially from video data segment by video data. Currently EXCL is trading at 17.23x/1.13x PE/PBV.
IHSG Updates
JCI was flat by +0.01% to 5,834.39 on Tuesday (18/05) followed by net foreign sell reaching IDR340.05 billion. JCI has breached the support which caused several investors to buy back stocks. However, several sectors such as healthcare, finance and tech still weigh on JCI, resulting in a very slight increase. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,272. We estimate JCI will move in the range of 5,750-5,900 while waiting for Balance of Trade data release. Today's recommendation: TINS, AALI, UNTR, SMRA.
Corporate Action
Cum Dividend Date: PBID (IDR100/share), MIDI (IDR20.85/share), AMRT (IDR9.3/share)
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