Global Market Highlight
DJIA rose by +1.35% on Wednesday (24/02) followed by S&P 500 (+1.14%) and the Nasdaq (+0.99%).Wall Street closed higher as value sectors like energy and industrials continued to strengthen amid expectations that another round of stimulus and the ongoing vaccine roll out will spur a stronger economic recovery. Positive vaccine news also added to the bullish bets on stocks as the Food and Drug Administration said Johnson & Johnson single shot Covid-19 vaccine was safe and effective. Moreover, the market will look forward to several data releases today, such as: 1) US GDP Growth Rate QoQ 2nd Est; 2) US Durable Goods Orders; 3) US Initial Jobless Claims.
Domestic Update
• The Ministry of Finance increased the budget ceiling for the 2021 national economic recovery program (PEN) by IDR699.43 trillion, an increase of 11.38% from the ceiling as of February 9, 2021, which amounted to IDR627.96 trillion.
• The Ministry of Finance also conveyed that corporate income tax (PPh) revenue in January 2021 was around IDR3.16 trillion, a decrease of 54.44% YoY.
• Meanwhile, the Ministry of Finance noted that the realization of export duty as the basis for export taxes grew by 923% YoY to a level of IDR1.11 trillion in January 2021. This is in line with the increase in commodity exports in early 2021.
• Furthermore, there was an addition of 782 new Covid-19 cases in Jakarta yesterday.
Company News
1. AALI IJ posted a total net income of IDR18.8 trillion, or +8.05% YoY (vs IDR17.45 trillion FY19) while cost of revenue was recorded at IDR15.84 trillion or +3.26% YoY ( vs IDR15.3 trillion FY19). So that the net profit was recorded at IDR833.09 billion in FY20 or +294.78% YoY (vs IDR211.11 billion FY19) (Emitennews). MNCS Comment: AALI gains advantage from the ever increasing CPO price which hit the highest in 8 years, due to the La Nina phenomenon. We believe this would still be beneficial for AALI until 1H21 when the weather subsides. Currently AALI is trading at 28.06x/1.15x PE/PBV.
2. CPIN IJ exports processed meat for the first time in the Middle East country, Qatar. CPIN has signed a cooperation agreement with KWIQ Supermarket with a minimum export of 21,600 kg of processed meat for FY21E. In the initial stage, 1 container or approximately 3,618 kilograms worth IDR220 million (Bisnis Indonesia) MNCS Comment: We estimate that CPIN will focus on expanding the export market to several countries with a target of 170 tons of processed meat. The culling program which is run by the government will also add to positive sentiment in maintaining price stability in the market. CPIN is currently trading at 32.62x/4.50x PE/PBV.
3. ADHI IJ got the tender for the preservation project for the Non-Toll Road Crossing in Riau Province with a value of IDR525 billion with a length of 43 kilometers. In addition, through its subsidiary, PT JAA is also building Jalintim in Palembang along 29.87 kilometers with a concession period of 15 years and 3 years for the construction period starting from 2021 to 2023 (Bisnis Indonesia). MNCS Comment: The achievement of these new contracts is quite good accompanied by the government project to build infrastructure. ADHI as one of the public transportation construction companies is expected to be able to gradually improve in FY21E. ADHI is trading at 245.64x/0.91x PE/PBV.
IHSG Updates
JCI dropped by -0.35% to 6,251.05 on Wednesday (24/02) followed by net foreign buy reaching IDR302.20 billion. JCI finally fell after 3 days of rally, but on the other side finance and agriculture sector strengthened as CPO price increased quite significantly. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,085. We estimate JCI will move in the range of 6,173-6,315 while waiting for Loan growth data release. Today's recommendation: INDF, SSMS, MAPI, BBRI.
Corporate Action
RUPS: ENRG, WSBP, EPMT
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