MNCS Morning Navigator 23 November 2020

Global Market Highlight

DJIA slipped by -0.75% on Friday (20/11) followed by S&P 500 (-0.68%) and Nasdaq (-0.42%). Indices dropped with a surge in Covid-19 cases reaching 12 million cases in the US, threatening to derail a fragile economic recovery, even as plans were announced for ending several of the Federal Reserve's economic support programs. Hopes of a fiscal stimulus package were revived after U.S. Senate Democratic leader Chuck Schumer and Republican Majority Leader Mitch McConnell decided to resume relief talks on Thursday. Major banks have upgraded their stock market forecasts for 2021 following recent promising data from vaccine trials. Moreover, the market will look forward to several data releases today, such as: 1) US Markit Manufacturing PMI; 2) Eurozone Markit Manufacturing PMI; 3) UK Markit Manufacturing PMI.

Domestic Update

Indonesia recorded a surplus in balance of payment (NPI) of USD2.1 billion in 3Q20 (vs USD9.2 billion in 2Q20). In line with that, the foreign exchange reserves increased to USD135.2 billion. Moreover, the current account balance booked a surplus of USD1 billion (0.4% of GDP), compared to last year’s deficit of USD7.5 billion. The capital and financial transaction also recorded a surplus of USD1 billion (0.4% of GDP). Meanwhile, the portfolio investment reported a net outflow of USD1.9 billion, in line with development of balance of payment surplus.

Company News

1.       IPCM IJ booked a revenue increase of 3.76% YoY to IDR510.15 billion in 3Q20. Both revenue from ship-delay service segment and scouting service increased by 2.35% YoY and 76.02% YoY respectively. Hence, the net profit of the company increased 1.34% YoY to IDR69.74 billion. To boost its performance, the company planned to buy tugs and 3 more vessels in 2021 (Market Bisnis). MNCS Comment: It's quite decent that IPCM managed to maintain their performance amid the pandemic stricken economy. IPCM also plan to expand by enlarging it's services. IPCM is currently traded at 13.07x/1.11x PE/PBV.
2.        IMAS IJrevenue fell -23.42% YoY to IDR11.28 trillion in 3Q20. The COGS decreased by -26.97% YoY, followed by decreased in sales and administration expenses of 4.6% and 5.3% YoY respectively, finance expense -3.41% YoY and other income -4.98% YoY. Hence, the company booked a net loss of IDR328.31 billion (Kontan). MNCS Comment: Despite the efficency strategy implemented, the drop on car sales seem to affect the bottom line badly. But we hope on a recovery in the future car sales while the current trend is slowly inclining monthly. IMAS is currently traded at 0.45x PBV.
3.        INAF IJ recorded revenue of IDR749.25 billion which rose by 28.4% YoY in 9M20. INAF's revenue is still dominated by ethical drug sales in the local market by 58.82% but it decreased slightly by -5.14% YoY. Meanwhile, the sales segment of medical, diagnostic and other devices in the country increased rapidly by 182.04% YoY accompanied by ethical drug export which skyrocketed 385.84% YoY. INAF also succeeded in reducing sales expenses by -4.12% YoY as well as general and administrative expenses by -8.62% YoY. Thus a smaller net loss recorded from IDR34.84 billion in the previous period to IDR18.88 billion in 9M20 (Market Bisnis). MNCS Comment: Pharmaceutical is usually affected by the foreign exchange taking into account that most of their materials are imported. But the significant increase in export and medical devices has help reduce the bottom line loss. INAF is currently traded at  20.79x PBV.

IHSG Updates

JCI fell by -0.40% to 5,571.66 on Friday (20/11) followed by net foreign sell reaching IDR322.02 billion. JCI finally tumbled following the weakening global indices with the rising Covid-19 cases. Furthermore, investors seem to done a profit taking after a four-day incline on JCI, though infra, basic industry and miscellaneous industry managed to stay green. Meanwhile, the Rupiah exchange rate was weakening at IDR14,165.We estimate JCI will move in the range of 5,381 – 5,600 while waiting for motorbike sales data release. Today's recommendation: AALI, RALS, TLKM, BBTN.

Disclaimer On

AALI, RALS, TLKM, BBTN, INAF, IMAS, IPCM