MNCS Morning Navigator

22 Februari 2021

MNCS Morning Navigator 22 February 2021

Global Market Highlight

DJIA was flat by 0.00% on Friday (19/02) followed by the decrease on S&P 500 (-0.19%) and gains on Nasdaq (-0.52%).Wall Street mixed closing was due to pessimism over a jump in interest rates and the potential for inflation. The 10-year Treasury yield this week rose to the highest in nearly a year to 1.34%. Meanwhile, economic data suggested a rebound is already underway and a USD1.9 trillion stimulus deal could help the US get back to full employment in a year. Moreover, the market will look forward to several data releases today, such as: 1) US Chicago Fed National Activity Index; 2) Germany IFO Business Climate; 3) US Chicago Fed National Activity Index.


Domestic Update

• BI recorded a low deficit of USD0.2 billion in the balance of payments in 4Q20, supported by a continuing account surplus. Meanwhile, the total balance of payments in 2020 was a surplus of USD2.6 billion. The reserve position at the end of December 2020 increased to USD135.9 billion, equivalent to 9.8 months of imports and government external debt financing, and is above the international adequacy standard.

• Furthermore, there was an addition of 2.720 new Covid-19 cases in Jakarta yesterday.


Company News

1. IRRA IJ posted total revenue for FY20 of IDR563.88 billion, or +100.35% YoY (vs IDR281.75 billion FY19) while cost of goods sold was recorded at IDR443.46 billion, or +99.54% YoY ( vs IDR222.15 billion FY19) so that IRRA recorded a net profit in FY20 of IDR60.51 billion or +81.81% YoY (vs IDR33.2 billion FY19) (Emitennews). MNCS Comment: It seems that the Covid-19 pandemic has affect IRRA's financial performance positively along with the high demand for needles and other healthcare equipments. Currently IRRA is trading at 66.09x/16.51x PE/PBV.

2. UNTR IJ plans capital expenditure of USD290 million FY21E or an increase of 52.6% YoY (vs USD190 million FY20). The capex allocation obtained from internal cash will be used by 50% for the mining contractor segment, 40% will be allocated to the gold mining segment, and 10% will be used as a means of maintenance (Kontan). MNCS Comment: We hope that UNTR's performance would increase, in line with the increase in capex. We believe that UNTR business activities can gradually recover to normal as the pandemic eases. UNTR is currently trading at 12.09x/1.42x PE/PBV.

3. ISAT IJ posted revenue of IDR27.92 trillion in FY20 or + 6.9% YoY (vs IDR26.11 trillion FY19). Cellular revenue increased 11.6% YoY to IDR23.08 trillion (vs IDR20.67 trillion FY19). However, on the other hand, ISAT recorded a net loss for the year attributable to owners of the parent entity in FY20 of IDR716.7 billion (vs net profit of IDR1.56 trillion FY19) (Bisnis Indonesia). MNCS Comment: The decline in earnings was largely due to the increase in depreciation expense, salary expenses and finance charges as well as the profit position in FY19 on the gain from selling the tower. We believe that ISAT's performance can gradually recover with EBITDA margin being maintained at the level of 40%, supported by an increase in data traffic and ARPU as well as improving balance sheet conditions. ISAT is trading at 2.61x PBV.


IHSG Updates

JCI increased by +0.51% to 6,231.93 on Friday (19/02) followed by net foreign buy reaching IDR15.98 billion. JCI rebounded with finance leading the strengthening as the 25bps drop on 7DRR seemed to finally bring positive impact on JCI. The increased was followed by mining, infrastructure, and property while agriculture sector weakened due to the drop on CPO price. Meanwhile, the Rupiah exchange rate was weakening at IDR14,065. We estimate JCI will move in the range of 6,156 – 6,315 while waiting for money supply and Loan growth data release. Today's recommendation: ISAT, JSMR, ELSA, SMGR


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