MNCS Morning Navigator 28 May 2020

Global Market Highlight

DJIA rose by +2.21% on Wednesday (27/05) followed by the increase of S&P500 (+1.48%) and Nasdaq (+0.77%). The increase was still caused by the europhoria of the new normal life in some countries and the vaccine development. Turns out there are 114 vaccine developer that are still in the preclinical stage other than Moderna and Novavax, AstraZenecca also hit the spotlight lately while cooperating with Oxford university.The market will look forward to several data releases today, such as:1) US Durable Goods Order per Apr-2020; 2) US GDP Growth Rate Estimation per 2Q20; 3) German Inflation Rate per Apr-2020.

Domestic Updates

The government will issue a debt of IDR990.1 trillion to cover the 2020 State Budget (APBN) deficit which is predicted to reach IDR1,028.5 trillion or equivalent to 6.27% of gross domestic product (GDP). Up to 20 May 2020 the realization of SBN reached IDR420.8 trillion. The remaining SBN nurseries worth IDR990.1 trillion will be fulfilled through auctions on the domestic market, private placement and special scheme SBN with Bank Indonesia (BI). Meanwhile, the issuance of retail SBN amounting to IDR40 trillion-IDR50 trillion and the issuance of foreign currency SBN around USD4 billion to USD7 billion.

Company News

1. BBCA posted a consolidated Net Profit of IDR6.6 trillion (+8.60% YoY) in 1Q20 with NIM at 6.1%. Loan grew by 12.3% YoY to IDR612.2 trillion and was mainly supported by corporate loans which grew 25.4% YoY while commercial and SME loans increased 5.0% YoY followed by Consumer loans moderate growth of 3.0% YoY. LDR stood at 77.6% (-340bps YoY) while Gross NPL is at 1.6%. Furthermore, provision went up by 5,840 bps to 229.8% in line with the implementation of IFRS 9. BBCA is currently traded at 3.52x PBV (Analyst Meeting)
2. TLKM booked revenue of IDR135.57 trillion in FY19, which increased by 3.70% YoY from IDR130.78 trillion in FY18. Telkomsel digital business revenue grew significantly by 2.1% YoY and contribute 64% to revenue. IndiHome also recorded a 28.10% YoY revenue growth in FY19 and a 37.20% YoY growth in customer. Net profit stood at IDR18.66 trillion or went up by 3.50% YoY.   TLKM is currently traded at 16.83x/3.15x PE/PBV. (Investor.id)
3. PZZA expected its revenue to decline by around 25% due to operational restrictions following the Large-Scale Social Restrictions (PSBB) policy implemented by the government to overcome the COVID-19 pandemic. During the implementation of the policy, a number of PZZA restaurants outlets only provide take-out/delivery services. Management stated that the operational restrictions are applied in its restaurants in all regions that applied PSBB, for example, Jakarta, West Java, Pekan Baru, and East Java. However, laying off employees or cutting salaries have not been done, and holiday allowances were paid to all of its employees. PZZA is currently traded at 11.06x/1.65x PE/PBV. (IDN Financials)

IHSG Updates

JCI increased by +0.32% to 4,626.80 on Wednesday (27/05) although followed by a net foreign sell reaching IDR274.26 billion. The flat movement was still affected by the lockdown easing in several countries as well as in Indonesia. Although the Covid-19 case in Indonesia has not subsided, as of yesterday, 686 cases increased making the total cases reached 23,851 nationwide with 25%/6% recoveries and mortality rate. Meanwhile, the Rupiah exchange rate against the USD was appreciated at IDR14,710. We estimate JCI will move in the range of 4,600-4,650 while waiting for the Money Supply data of Apr-2020. Today's recommendation: ITMG, EXCL, PWON, BBRI.

Corporate Action

Cum Dividend Date: PGAS

Ex Dividend Date: AMRT, SSIA

Disclaimer On

BBCA, TLKM, PZZA, ITMG, EXCL, PWON, BBRI