Global Market Highlight
DJIA slipped by -0.75% on Tuesday (20/04) followed by S&P 500 (-0.68%) and Nasdaq (-0.92%). Wall Street fell as rising global Covid-19 cases sparked renewed concerns over global growth, prompting investors to pause on cyclical share purchases. The financial sector experienced a decline, due to weakening US bond yields to a level of 1.56%, down 38 basis points. On the other hand, tech stocks still benefited from falling US bond yields, which had limited growth last month, as investors awaited the release of quarterly earnings. Moreover, the market will look forward to several data releases today, such as: 1) US MBA Mortgage Applications; 2) UK Core Inflation Rate; 3) Canada Core Inflation Rate.
Domestic Update
• Bank Indonesia decided to maintain the BI 7-Day Reverse Repo Rate (BI7DRR) at 3.50%, the Deposit Facility rate at 2.75%, and the Lending Facility rate at 4.25%. This decision is in line with the need to maintain the stability of the Rupiah exchange rate against the impact of high global financial market uncertainty, although inflation forecasts remain low.
• Furthermore, there was an addition of 460 new Covid-19 cases in Jakarta yesterday.
Company News
1. ADRO IJ targets the production volume of stocking coal in FY21E to be in the range of 2.4 - 2.5 million tons. This target is almost double the realization of stocking coal production in FY20 of 1.5 million tons. In addition, overall ADRO targets coal production volume in the range of 52 - 54 million tons in FY21E (Bisnis Indonesia). MNCS Comment: We see that increasing the coking coal production would be a good strategy as many factories are back in operation while usually a higher calorific value coal would have a higher price. Currently ADRO is trading at 18.30x/0.72x PE/PBV.
2. UNTR IJ recorded sales of 688 units of Komatsu heavy equipment during 3Q21, an increase of 11.5% YoY (vs 617 units of Komatsu 3Q20). In detail, sales to the mining sector still dominate with 42%, followed by sales to the construction sector at 31%, the forestry sector at 17%, and the agribusiness sector at 10%. Meanwhile UNTR sold 272 units of heavy equipment in Mar-2021 which increased 26% MoM (vs 201 units in Feb-2021) (Kontan). MNCS Comment: UNTR managed to book a double digit growth of their sales volume in 1Q21 which is a great sign of the improving performance for the rest of the year. UNTR is currently trading at 13.67x/1.36x PE/PBV.
3. TPIA IJ will distribute FY20 cash dividends amounting to IDR31.60/share or reaching USD38.5 million of the total FY20 net profit of USD51.35 million. Date of Cum dividend on 23 April 2021 (Kontan). MNCS Comment: TPIA's dividend payout ratio of 75% of FY20 net profit or an increase compared to FY19 which reached 28.91% while the dividend yield offered was 0.31% or an increase compared to FY19 yield of 0.06%. TPIA is trading at 254.79/7.24x PE/PBV.
IHSG Updates
JCI slipped by -0.23% to 6,038.32 on Tuesday (20/04) followed by net foreign sell reaching IDR107.97 billion. JCI continued to tumble, reflecting the previous movement of the global market. On the other hand, the miscellaneous industry, agri, basic industry, consumer and infra sectors still managed to rise while the rest of the sectors slipped. Meanwhile, the Rupiah exchange rate was strengthening at Rp14,498. We estimate JCI will move in the range of 5,930-6,060 while waiting for the motorbike sales data release. Today's recommendation: DOID, ERAA, BBCA, SMRA.
Corporate Action
RUPS: TMAS, BTPS, CITA
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