Global Market Highlight
DJIA slipped by -0.36% on Monday (19/04) followed by S&P 500 (-0.53%) and Nasdaq (-0.98%). Wall Street fell paced by declines in consumer discretionary due to the drop in casino stocks, although there are high expectations for a strong rebound. Tech stocks followed the drop as the earnings are set to release this week. While energy stocks are still shadowed by oil price as concerns rise towards oversupply. Moreover, the market will look forward to several data releases today, such as: 1) UK Employment Change; 2) China Loan Prime Rate; 3) Germany Purchasing Price Index.
Domestic Update
• The government has again extended the Enforcement of Micro-scale Restrictions on Community Activities (PPKM) to prevent the spread of the Covid-19. This extension is the sixth time the PPKM has been implemented since the Covid-19 pandemic. There are five additional provinces that will implement micro PPKM this time. Active cases as of April 18 were 6.6%, and this is an improvement compared to two months ago (vs February 2021 at 16%). In addition, the micro PPKM will be extended from April 22 to May 3, 2021 (Kontan).
• Furthermore, there was an addition of 973 new Covid-19 cases in Jakarta yesterday.
Company News
1. INCO IJ recorded a decrease in nickel production in matte in 1Q21 of 15,198 tons. Nickel production in matte in 1Q21 decreased 8% QoQ and 14% YoY compared to 4Q20 and 1Q20. In 4Q20 INCO produced 16,445 tonnes, while 1Q20 was 17,614 tonnes. The decline in production in early 2021 is due to the company's maintenance activities (IQ Plus). MNCS Comment: We hope INCO can increase their production in 2Q21 to at least narrow the gap between demand and supply. Currently INCO is trading at 36.68x/1.50x PE/PBV.
2. ARNA IJ posted revenue of IDR662.38 billion in 1Q21, which is an increase of + 13.50% YoY (vs IDR583.61 billion in 1Q20). ARNA posted a net profit of IDR118.33 billion in 1Q21 which increased 80.11% YoY (vs IDR65.70 billion in 1Q20) (IQ PLUS). MNCS Comment: We believe ARNA is able to maintain its performance in FY21E with earnings growing 30% YoY. Efficiency in the use of raw materials, gas costs and fixed costs will be a strong support for the margin. ARNA is currently trading at 11.63x/4.61x PE/PBV.
3. EXCL IJ anticipates an increase in data traffic during Idul Fitri 2021 by increasing capacity by up to 200% compared to daily capacity. In addition, EXCL recorded an increase in data service traffic by 25% compared to normal days on Idul Fitri 2020. Meanwhile, legacy services such as SMS and voice decreased by 20% and 10% compared to normal days before the Covid-19 pandemic (Bisnis Indonesia). MNCS Comment: We estimate data traffic will be able to grow ~ 45% in 1H21E in line with the increase in traffic, especially in the middle of PPKM and ahead of Eid al-Fitr. EXCL is trading at 58.49/1.14x PE/PBV.
IHSG Updates
JCI slipped by -0.55% to 6,052.54 on Monday (19/04) followed by net foreign sell reaching IDR34.94 billion. JCI fell despite the rise on the Asian indices, as most of the sectors fell while only property sector managed to increase. On the other hand, concern rises over the interest rate decision which is estimated to stay at 3.5%. Meanwhile, the Rupiah exchange rate was strengthening at Rp14,548. We estimate JCI will move in the range of 5,900-6,100 while waiting for the Interest Rate Decision. Today's recommendation: HMSP, INTP, INCO, PTPP.
Corporate Action
Cum Dividend Date: AUTO (IDR15.5/share), MFMI (IDR15/share)
RUPS: MLBI
Disclaimer On
