MNCS Morning Navigator

25 Maret 2021

MNCS Morning Navigator 25 March 2021

Global Market Highlight
DJIA was flat by by -0.01% on Wednesday (24/03) followed the weakening of S&P 500 (-0.55%) and Nasdaq (-2.01%). Wall Street continued the fall as tech stocks failed to take advantage of falling bond yields. The wild swings in the stocks are expected to continue as markets search for direction. Mostly weaker economic data following underwhelming durable goods orders and marketing activity data were lowering optimism of the recovery. Moreover, the market will look forward to several data releases today, such as: 1) US GDP Growth Rate; 2) US Initial Jobless Claims; 3) Germany GfK Consumer Confidence.


Domestic Update
The Ministry of Finance stated that tobacco or cigarette excise tax revenues by the end of February 2021 grew by 50.6% YoY, or had accumulated by IDR27.44 trillion. Overall, cigarette excise revenue in the first two months of 2021 is equivalent to 15.79% of the year-end target of IDR173.78 trillion.
OJK stated that the development of the Covid-19 restructuring was getting slower. As of March 8, 2021, the amount of bank credit restructuring reached IDR999.7 trillion from 7.97 million debtors. It consists of the Micro, Small and Medium Enterprises (MSMEs) segment totaling 6.17 million debtors with a total credit of IDR392.2 trillion and non-MSMEs 1.8 million debtors with a credit value of IDR607.5 trillion.
Furthermore, there was an addition of 890 new Covid-19 cases in Jakarta yesterday.

Company News
1. ARNA IJ posted revenue of IDR2.21 trillion in FY20, which increased 2.7% YoY (vs IDR2.15 trillion in FY19). However, COGS also decreased from IDR1.58 trillion in FY19 to IDR1.5 trillion in FY20. Thus, ARNA posted a net profit of IDR323.57 billion in FY20 which increased 49.8% YoY (vs IDR215.53 billion in FY19). In FY21E ARNA targets sales growth of up to 10% YoY and to maintain profit growth, ARNA seeks to reduce COGS by 1.3% YoY in FY21E. ( MNCS Comment: We believe ARNA is able to maintain its performance in FY21E with earnings growing at 30% YoY. Efficiency in the use of raw materials, gas costs and fixed costs will be a strong support for the margin. Currently ARNA is trading at 17.05x/4.29x PE/PBV.

2. MIKA IJ posted revenue of IDR3.41 trillion in FY20, which increased 6.6% YoY(vs IDR3.2 trillion in FY19). While, Cost of revenue also increased from IDR1.67 trillion in FY19 to IDR1.72 trillion in FY20. However, MIKA still managed to post a net profit of IDR841.67 billion in FY20 which increased 15.2% YoY (vs IDR730 billion in FY19) ( MNCS Comment: This achievement was due to improved occupancy in 3Q20-4Q20, this caused MIKA's Earning to grow double digits in FY20. MIKA is currently trading at 47.05x/8.05x PE/PBV.

3. ADHI IJ posts new contracts amounting to IDR1.5 trillion until February 2021 or up 37% MoM (vs IDR1.1 trillion in January 2021). New contracts obtained from the construction and energy sectors were still the largest contribution with 91%, while the property sector contributed 8% and the rest came from other business lines. However, the new contract when compared to January-February 2020 was recorded at IDR1.8 trillion or decreased -16.67% YoY (Kontan). MNCS Comment: ADHI's new contract is quite good, supported by the government's program to build infrastructure to improve the economy as a whole. ADHI is trading at 214.39x/0.79x PE/PBV.


IHSG Updates
JCI dropped by -1.54% to 6,156.14 on Wednesday (24/03) followed by net foreign buy reaching IDR23.72 billion. JCI fell significantly due to the weakening in the global indices which was caused by: 1) New lockdowns on Europe that last until Easter or mid-April; 2) Heightened tensions between European Union, UK, US and Canada towards China regarding human rights violation. Furthermore, all sectors tumbled with mining and agriculture fell the deepest. Meanwhile, the Rupiah exchange rate was weakening at IDR14,425. We estimate JCI will move in the range of 6,100-6,240 while waiting for Markit Manufacturing PMI data release. Today's recommendation: ELSA, BMRI, INDF, TINS.


Corporate Action


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