MNCS Morning Navigator

29 April 2021

MNCS Morning Navigator 29 April 2021

Global Market Highlight

DJIA slipped by -0.48% on Wednesday (28/04) followed by S&P 500 (-0.08%) and Nasdaq (-0.28%). Wall Street weakened again as the Fed decided to keep interest rates stable at the level of 0% -0.25%. The Fed stated that amid advances in vaccination and strong policy support, indicators of economic activity and employment have strengthened, while sectors most affected by the pandemic are still weak but have shown improvement. The central bank's unchanged decision weighed on bond yields, which helped the tech stocks to gain. Moreover, the market will look forward to several data releases today, such as: 1) US Fed Interest Rate Decision; 2) US GDP Growth Rate; 3) US Initial Jobless Claims.


Domestic Update

• ADB estimates that Indonesia's economic growth this year will be 4.5%, then it will increase to 5% in 2022. In addition, ADB stated household expenditure in Indonesia is expected to increase in 2021. This is in line with the vaccination program and the increase in economic sectors that are back in operation. Then for inflation which reached an average of 1.6% last year, it is estimated that it will increase to 2.4% in 2021, then inflation will increase again to 2.8% in 2022. 

• Furthermore, there was an addition of 639 new Covid-19 cases in Jakarta yesterday.


Company News

1. HMSP IJ posted revenue of IDR23.56 trillion in 1Q21, which is down -0.57% YoY (vs IDR23.68 trillion in 1QFY20). However, the cost of revenue also increased from IDR17.82 trillion in 1Q20 to IDR18.52 trillion in 1Q21. HMSP posted a net profit of IDR2.59 trillion in 1Q21 which decreased by -21.99% YoY (vs IDR3.32 trillion in 1Q20) (IQPLUS). MNCS Comment: The decline in performance was due to a decrease in the volume of the cigarette industry and a change in consumer preferences for cigarettes to more affordable products. We estimate that social distancing activities will still be the main challenge in reducing people's purchasing power. Currently HMSP is trading at 14.90x/4.69x PE/PBV.

2. DMAS IJ posted revenue of IDR523.60 billion in 1Q21, an increase of + 395.77% YoY (vs IDR107.63 billion in 1Q20). However, cost of revenue also increased from IDR34.57 billion in 1Q20 to IDR227.51 billion in 1Q21. DMAS posted a net profit of IDR270.73 billion in 1Q21 which increased 407% YoY (vs IDR53.36 billion in 1Q20) (Kontan). MNCS Comment: This extraordinary performance was due to the optimal absorption of industrial land due to government relaxation through the omnibus law, thus attracting foreign companies in Indonesia. DMAS is currently trading at 10.95x/2.05x PE/PBV.

3. KAEF IJ will distribute FY20 cash dividends of IDR1.27 /share or IDR7.05 billion of FY20's total net profit of IDR17.63 billion (Bisnis Indonesia). MNCS Comment:  KAEF dividend payout ratio of 40% of FY20 net profit or an increase compared to the average of the last 3 years which reached 16.63% while the dividend yield offered is 0.05%, this value is better than FY19 where the company does not distribute dividends for the financial year FY19. KAEF is trading at 837.56/2.11x PE/PBV.


IHSG Updates

JCI rose by +0.25% to 5,974.48 on Wednesday (28/04) followed by net foreign sell reaching IDR476.61 billion. JCI was backed by the rise in the basic industry, consumer and mining sectors which offset the significant decrease in miscellaneous industry. Meanwhile, the Rupiah exchange rate was weakening at Rp14,500. We estimate JCI will move in the range of 5,930-6,030 while waiting for the PMI Markit Manufacturing data release. Today's recommendation: ISAT, INCO, INKP, BRIS.


Corporate Action

Cum Dividend Date: CITA (IDR475/share), BTPS (IDR3/share)



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