MNCS Morning Navigator

23 April 2021

MNCS Morning Navigator 23 April 2021

Global Market Highlight
DJIA fell by -0.94% on Thursday (22/04) followed by S&P 500 (-0.92%) and Nasdaq (-0.94%). Wall Street fell sharply while President Biden is considering a major capital gains tax hike. The wave of bullish corporate earnings was shadowed by a hike on global Covid-19 cases which tapered expectations over a faster reopening. On the other hand, improving economic data, particularly in the labor market, continues to reflect the success of the vaccine rollout, in which 17.5 million people filed for unemployment insurance, down 39,000 from the prior week's. Moreover, the market will look forward to several data releases today, such as: 1) US Markit Manufacturing PMI Flash; 2) US New Home Sales; 3) Japan Inflation Rate.


Domestic Update
The Finance minister said that the acceleration of economic recovery will take place in 2Q21 with an estimated economic growth of 7% YoY. In addition, the finance minister said that consumption is expected to continue to strengthen in 2Q21 due to: 1) improving public confidence; 2) the domestic economy rebounded from the deepest contraction in economic growth in the 2Q20; 3) consumption activity in Eid is better than last year; 4) the positive public's response to the use of the economic stimulus program.
Furthermore, there was an addition of 1,266 new Covid-19 cases in Jakarta yesterday.

Company News
1. BBCA IJ posted net interest income of IDR14.1 trillion in 1Q21, or an increase of +3.3% YoY. On the other hand, non-interest income decreased to IDR4.9 trillion, or -14.5% YoY. In total, operating income was recorded at IDR19.1 trillion or a decrease of -2.0% YoY. However, BBCA's net profit managed to grow + 7% YoY to IDR7.04 trillion in 1Q21 (vs IDR6.58 trillion in 1Q20) (CNBC Indonesia). MNCS Comment: BBCA's performance in-line with MNCS estimation and consensus which reflects 24% / 23% of FY21E net profit target. We estimate that the economic recovery will begin to show in 2H21E driven by accommodative government regulations and massive distribution of vaccines so that we predict loans will grow 4.96% YoY in FY21E. Currently ASII is trading at 28.24x/4.15x PE/PBV.

2. ADHI IJ booked a new contract of IDR3 trillion in 1Q21. However, the value is still 12.5% ​​of the new contract target set in FY21E. ADHI targets the acquisition of new contracts of around IDR24 - IDR25 trillion in FY21E. This target is up 21.82% YoY (vs realization of new contracts IDR19.7 trillion FY20) (Kontan). MNCS Comment: The new contract gave the construction company hope. Cyclically, new contracts have the potential to increase in 3Q-4Q. ADHI is currently trading at 163.36x/0.571x PE/PBV.

3. BSDE IJ posted marketing sales of IDR2.5 trillion in 1Q21 or increase 38% YoY. So that BSDE has reached 35% of the marketing sales target of IDR7 trillion in FY21E. (Bisnis Indonesia). MNCS Comment: Marketing sales grew by double digits as residential demand recovered, so we are positive on FY21E. BSDE is trading at 86.80/0.81x PE/PBV.


IHSG Updates
JCI was flat by +0.02% to 5,994.18 on Thursday (22/04) followed by net foreign sell reaching IDR145.36 billion. JCI managed to slightly increase, supported by the significant rise on miscellaneous industry, followed by infra, mining and finance sectors while the rest of the sectors fell. It seems that the optimism from Wall Street is not enough to boost the increase on JCI as concerns lingered on the increased Covid-19 cases in India. Meanwhile, the Rupiah exchange rate was strengthening at Rp14,520. We estimate JCI will move in the range of 5,927-6,040 while waiting for the motorbike sales data release. Today's recommendation: ICBP, MEDC, BBTN, DSNG.


Corporate Action
Cum Dividend Date: JPFA (IDR40/share), TPIA (IDR31.6/share), GEMS (IDR186/share)


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