Global Market Highlight
DJIA rose by +0.20% on Tuesday (22/06) followed by S&P 500 (+0.51%), and Nasdaq (+0.79%). The Wall Street was strengthening as gains in the Technology, consumer services and Oil & Gas sectors led shares higher. Meanwhile, Federal Reserve Chair Jerome Powell reaffirmed the U.S. central bank's intent to encourage a "broad and inclusive" recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation. The market will look forward to several data releases today, such as: 1) US Markit Manufacturing PMI Flash; 2) Germany Markit Manufacturing PMI Flash; 3) UK Markit/CIPS Manufacturing PMI Flash.
Domestic Update
• Indonesia money supply (M2) grew 8.1% YoY to IDR 6,994.9 trillion in May. The rate slowed down than previous month with 11.5% YoY increase in April. MNCS comment: The positive growth figure was also supported by Lebaran momentum. Although the rate was slowing down, liquidity remained ample as BI continue to support the economy through accommodative policy. As of 21 May, BI has injected IDR 88.91 trillion of liquidity to banking system through QE.
• Furthermore, there was an addition of 3,221 new Covid-19 cases in Jakarta yesterday.
Company News
1. HOKI IJ posted net sales of IDR240.73 billion in 1Q21, down -46.55% YoY (vs IDR450.42 billion in 1Q20). COGS decreased from IDR209.74 billion in 1Q20 to IDR405.31 billion in 1Q21. HOKI posted a net profit of IDR7.01 billion in 1Q21 which decreased -52.28% YoY (vs IDR14.67 billion in 1Q20) (Kontan). MNCS Comment: Despite experiencing a decline due to the pandemic and social restrictions in various regions, HOKI is still trying to increase the sales contribution of the modern-trade channel, which contributes quite significantly to 51.85% of total sales. In addition, HOKI is also in the testing phase of new product diversification in the consumer goods segment. HOKI is trading at 70.43x/2.95x PE/PBV.
2. PPRE IJ obtained a new contract amounting to IDR2.2 trillion as of 5M21, non-APBN private sector contributed by 91%. PPRE is targeting additional new contracts up to FY21E of IDR1.5 trillion from nickel mining services in North Morowali and Halmahera (IQ Plus). MNCS Comment: We see that new contacts focused on mining services are quite good, by optimally utilizing assets so that they become a stable source of income, and mining services contributing 20% to the revenue target in FY21E. PPRE is currently trading at 29.98x/0.75x PE/PBV levels.
3. IRRA IJ recorded sales of IDR331 billion in 5M21 or grew 366% YoY (IDR71.02 billion in 5M20). In vitro products such as antigen test are still the biggest contributor to sales, followed by other Abbott products such as Reagents and plasma machines, namely Terumo. IRRA targets profit growth in FY21E of 80% - 100% (CNBC Indonesia). MNCS Comment: We see the increase in demand for medical equipment will still be high supported by the increase in Covid-19 cases and the ongoing vaccination program. IRRA will focus on strengthening the retail segment to increase market share, supported by cooperation with PT Kimia Farma Diagnostik, which has a network of 422 clinics. Through this collaboration, IRRA is targeting additional sales of 300,000 Panbio units per month. Currently IRRA is trading at 33.66x/10.70x PE/PBV levels.
IHSG Updates
JCI rose by +1.53% to 6,087.84 on Tuesday (22/06) while net foreign sell reaching IDR472.42 billion. JCI strengthened along with most sector, led by basic-industry (+2.86%), property (+2.18%), and finance (+2.04%). On the other hand, health and transport sector fell. The statement from President Jokowi on herd immunity which is hoped to be achieved on Aug-21 has given some optimism toward the market movement. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,402. We estimate the JCI will move in the range of 5,930-6,134 while waiting for loan growth YoY data release. Today's recommendation: BRPT, ISAT, BANK, ACES.
Corporate Action
Cum Dividend Date: SMAR (IDR160/saham), DVLA (IDR73/saham)
RUPS: PURA
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