MNCS Morning Navigator 27 November 2020

Global Market Highlight

DJIA was closed on Thursday (26/11) due to Thanksgiving followed by S&P 500 and Nasdaq. Thanksgiving is usually followed by Black Friday in the US which is usually marked with sales at retail stores and becomes a place to shop for Christmas gifts, so we hope that this will encourage retail sales growth and in the future will be an indication of economic recovery. Moreover, the market will look forward to several data releases today, such as: 1) China Industrial Profit; 2) Eurozone Economic Sentiment; 3) Eurozone Consumer Confidence.

Domestic Update

Bank Indonesia will become a standby buyer for Government Securities (SBN) in the initial market as the form of support for the impact of the pandemic. The new RUU Omnibus Law of the financial sector (article 70) will remove the current policy in which BI have an independence in the implementations on its duties from government or other parties’ interference. Other than authorized to fund SBN Repo from corporations / private sector, BI also directed to purchase SBN repo owned by the Deposit Insurance Corporation (LPS). The purchase scheme and mechanism will be determined by a joint decision between Minister of Finance (Menkeu) and Governor of Bank Indonesia.

Company News

1.       MAPI IJ revenue fell by -34.01% YoY to IDR10.17 trillion in 3Q20 due to pressure from various segment. On the flip side other segment that grew by 72.13% YoY to IDR1.08 million, retail sales experienced a significant decrease of 42.47% YoY, while café and restaurant segment decreased by 34.79% YoY, followed by department store segment -25.44% YoY. Even though the company has tried to decrease its COGS and direct expenses which was eroded by 26.01%, the company booked an unavoidable net loss of IDR605.33 billion in 3Q20 (vs  a net income of IDR642.84 billion in the same period last year) (Kontan).MNCS Comment:  Sadly retailers still took a toll from the pandemic which resulted in a poor bottom line. But we believe the recovery and easing from PSBB has already loosen the impact followed by a holiday season that will improve the consumption. MAPI is currently traded at 2.74x PBV.
2.        MAPA IJrecorded an increase in revenue by 67.1% QoQ in 3Q20, but still reported to decrease compared to same period last year (-40.3% YoY to IDR3.2 trillion). The surging sales of e-commerce rose (13% of total revenue) was not enough to offset the physical stores revenue declines. Hence, as the result, the company booked a net loss of IDR113.7 billion in 9M20 (vs a net income of IDR537.4 billion in 9M19) (IDN Financials). MNCS Comment: Like it's holding, MAPA also suffered a loss from the physical store segment, but as ecommerce start to gain momentum, we believe MAPA will utilize this by expanding the revenue segment. MAPA is currently traded at 2.60x PBV.
3.        IFII IJ announced to distribute interim dividends of IDR28.24 billion for 9.41billion shares of the company. Dividend per share is IDR3 with dividend yield of 2.14%. The cum date will be on 02 December 2020 (Kontan). MNCS Comment: Supported by a 23.7% YoY growth on the bottom line as of 9M20, it's no wonder IFII managed to distribute dividend out of many companies that is pandemic stricken. IFII is currently traded at 17.x/1.31x PE/PBV.

IHSG Updates

JCI rose by +1.42% to 5,759.92 on Thursday (26/11) followed by net foreign buy reaching IDR600.97 billion. JCI rebounded boosted by infrastructure sector which is supported by the tower telcos stocks, while the rest of the sector also strengthened, agriculture slipped due to a decrease on CPO price although there is still potential upside from La Nina phenomenon. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,100.We estimate JCI will move in the range of 5,520 – 5,750 while waiting for motorbike sales data release. Today's recommendation: ASII, ICBP, BBNI, ADHI.

Corporate Action

RUPS: KEJU, FORU, BOSS

Disclaimer On

ASII, ICBP, BBNI, ADHI, MAPA, MAPI IFII