24 Juni 2020
MNCS Morning Navigator 24 June 2020
Global Market Highlight
DJIA rose slightly by +0.50% on Tuesday (23/06) followed by S&P 500 (+0.43%) and Nasdaq (+0.74%). These increases were due to a statement from Navarro which revealed that the US-China trade peace agreement was completed. In mid-January 2020, the US-China signed a phase I trade agreement in Washington. But with Navarro's statement, it looks like there won't be any subsequent phases. On the other hand, the Democratic Party in the House of Representatives submitted an infrastructure stimulus proposal worth USD1.5 trillion or equals to IDR21,214.75 trillion. This stimulus includes the construction of roads, bridges, ports, energy, schools and various other projects. Moreover, the market will look forward to several data releases today, such as: 1) US House Price Index; 2) Germany Business Climate; 3) Japan Final Coincident Index.
Domestic Updates
The Ministry of Energy and Mineral Resources (ESDM) expenditure budget for 2020 is cut by IDR3.5 trillion. This cut is allocated to Covid-19 budgetary needs. Meanwhile, the initial budget ceiling for the Ministry of Energy and Mineral Resources in the 2020 APBN is IDR9.66 trillion and deducted by IDR3.54 trillion in deductions plus a reward for the ministry's performance in 2019 IDR80 billion.
Company News
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SMRA IJ recorded a drop in revenue of 1.89% YoY to IDR1.04 trillion in 1Q20. The decline in revenue was caused by a decrease in the property development segment by 7.48% YoY to IDR502.91 billion because SMRA does not record any office sales. While apartment sales fell by 50.6% YoY to IDR49.7 billion. Land sales also fell 97.59% to IDR3.18 billion. Thus, net profit decreased by 12.31% YoY to IDR37.04 billion in 1Q20. (Kontan) MNCS Comment: During Covid-19 pandemic, Property became one of the most impacted sectors. SMRA is currently traded at 62.50x/1.26x PE/PBV.
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CTRA IJ will carry out a private placement of 1.85 billion shares or 9.99% of the issued and fully paid capital. The plan is to issue the nominal value of the new shares at IDR250 per share which equals to IDR463.39 billion. Funds will be used to strengthen the capital structure in the context of business development. To get approval from shareholders, CTRA will hold a RUPS on Thursday, 30 July 2020. (Kontan) MNCS Comment: Private placement will strengthen Capital structure CTRA in this situation. CTRA is currently traded at 16.97x/0.81x PE/PBV.
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LINK IJ recorded revenue of IDR958.99 billion in in 1Q20, increased by 7.57% YoY compared to IDR891.47 billion in 1Q19. This revenue consisted of subscription fee revenue from broadband internet and network services of IDR562.51 billion, subscription fees from cable television services of IDR350.69 billion, and other income of IDR45.78 billion. However, at the same time the company's cost of revenue has increased by 34.48% YoY. As a result, net profit shrank by 25.20% YoY to IDR197.70 billion in 1Q20. (Market Bisnis) MNCS Comment: The higher cost of revenue hurts their bottom line. LINK is currently traded at 8.55x/1.49x PE/PBV.
IHSG Updates
JCI decrease slightly by -0.81% to 4,879.13 on Tuesday (23/06), followed by a net foreign sell reaching IDR527.90 billion. The decrease occurred in the midst of the strengthening of the global and regional Asia. This is due to the profit taking done by the investors as the foreign investor still recorded a consecutive net sales followed by the statement regarding the recession that drop the optimism in the market. Meanwhile, the Rupiah exchange rate against the USD was weakening at IDR14,162. We estimate JCI will move in the range of 4,860-5,020 while waiting for Loan Growth Data as of May 2020. Today's recommendation: CTRA, PTBA, BBRI, LSIP.
Corporate Action
Cum Dividend Date: ASII
RUPS: BNBR, BRMS
Disclaimer On
CTRA,
PTBA,
BBRI,
LSIP,
SMRA,
CTRA,
LINK
