26 Juni 2020
MNCS Morning Navigator 26 June 2020
Global Market Highlight
DJIA rose by +1.18% on Thursday (25/06) followed by S&P 500 (+1.10%) and Nasdaq (+1.09%). These increases were supported by a catalyst from several data releases such as: 1) The number of US unemployment benefit claims for the week ended June 20 which reached 1.48 million, fell by 60,000 from the previous week; 2) Orders for durable goods, which in May 2020 jumped by 15.8% MoM being the highest record since July 2014; 3) Orders for core capital goods (non-defense and non-aircraft) grew by 2.3% MoM in May 2020, being the highest growth since January 2016. This is also followed by rises on banking stocks namely Bank of America, JPMorgan Chase, Citigroup and Wells Fargo which rose at least 3%, while Goldman Sachs and Morgan Stanley grew by 4,6%/3,9%. On the other hand, International Monetary Fund (IMF) revision of the global economic forecast which initially contracted at the range of -3% to -4.9% does not seem to affect the market. Moreover, the market will look forward to several data releases today, such as: 1) US PCE Price Index; 2) US Consumer Sentiment; 3) France Consumer Confidence.
Domestic Updates
World Bank: Indonesia needs to increase its expenditure ratio by 4.6% of GDP. The intended development targets, as stated in the National Medium Term Development Plan (RPJMN) for 2020-2024. In the RPJMN, the government is targeting seven development agendas.
Company News
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PPRE IJ revenue was recorded at IDR552.14 billion in 1Q20, decreased by 36.3% YoY compared to IDR867.26 billion in 1Q19. Revenues from the construction segment were recorded at IDR428.70 billion (-38.10% YoY) followed by equipment rental and ready mix at IDR74.11 billion and IDR49.32 billion, respectively. Thus, PPRE managed to book a net profit of IDR14.02 billion, fell by 77% from IDR110.41 billion in 1Q19. (IDN Financials) MNCS Comment: During Covid-19 pandemic, construction became one of the most impacted sectors. PPRE is currently traded at 6.19x/0.80x PE/PBV.
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BAJA IJ recorded a net sales of IDR348.68 billion in 1Q20 by 20% YoY compared to IDR290.51 billion in 1Q19. Cost of goods sold also increased by 17.43% YoY to IDR339.02 billion. Due to a loss on foreign exchange rate amounting to IDR102.07 billion, BAJA posted a net loss of IDR99.38 billion in 1Q20. (IDN Financials) MNCS Comment: This company is not within our universe coverage. BAJA is currently traded at 1.38x PBV.
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JRPT IJ will do a buyback with the total budget IDR50 billion. The total share buyback of 100 million shares or 0.727% of the total amount of issued and paid-up capital in the company. The repurchase period will be done within three months after the date of disclosure. (Emiten News) MNCS Comment: This company is not within our universe coverage. JRPT is currently traded at 5.63x/0.78x PE/PBV.
IHSG Updates
JCI decreased by -1.37% to 4,896.73 on Thursday (25/06), although followed by a net foreign sell reaching IDR225.73 billion. The decline was due to a revision of economic growth from IMF in which Indonesia’s growth dropped to -0.3% from previously 0.5% followed by a profit taking from investors as foreign investors keep on recording a net sell over the week. Meanwhile, the Rupiah exchange rate against the USD was weakening at IDR14,175. We estimate JCI will move in the range of 4,880-5,020 while waiting for Motorbike Sales as of May 2020. Today's recommendation: JPFA, BSDE, BBNI, JSMR.
Corporate Action
Cum Dividend Date: PZZA, SRTG
RUPS: MEDC
Disclaimer On
JPFA,
BSDE,
BBNI,
JSMR,
PPRE,
BAJA,
JRPT
