Global Market Highlight
DJIA slipped by -0.44% on Monday (28/06) while S&P 500 rose by +0.23%, followed Nasdaq (+0.98%). Tech rallied strongly led by Facebook. Financials were one of the biggest decliners on the day following a slump in regional banks as falling bond yields soured investor sentiment on the sector. While, the fall US government bond yields boosted demand for consumer staples and utilities, commonly used as a bond proxy given the sector’s steady dividends. The market will look forward to several data releases today, such as: 1) US CB Consumer Confidence; 2) Germany Inflation Rate YoY; 3) Euro Zone Economic Sentiment.
Domestic Update
• Indonesia's International Investment Position (IIP) recorded a declined net liability at the end of Q121 of USD68.6 billions (25.3% of GDP), down from USD281.0 billions (26.5% of GDP) at the end of Q420. MNCS comment: The decline stemmed from a decrease in the Foreign Financial Liabilities (FFL) position coupled with an increase in Foreign Financial Assets (FFA) position. FFL position was 1.0% QoQ lower to USD685.5 billions. The decrease was primarily attributable to the US Dollar appreciation against rupiah. Indonesia's FFA position increased 1.4% QoQ to USD404.5 billions due to rising transactions of reserve assets and other investments. We believe with the latest figure Indonesia's IIP remained solid and supported external resilience.
• Furthermore, there was an addition of 8,348 new Covid-19 cases in Jakarta yesterday.
Company News
1. TLKM IJ posted revenue of IDR33.94 trillion in 1Q21, down -0.73% YoY (vs IDR34.19 trillion in 1Q20). COGS increased from IDR8.25 trillion in 1Q20 to IDR8.45 trillion in 1Q21. TLKM posted a net profit of IDR6.01 trillion in 1Q21 which was up +2.59% YoY (vs IDR5.86 trillion in 1Q20) (CNBC Indonesia). MNCS Comment: The decline in revenue was driven by the legacy segment (-25.4% YoY), while the data and Indihome segments were observed to increase. We estimate that TLKM's data service will continue to grow, in line with the significant growth of data traffic by 60% YoY. Currently TLKM is trading at 13.05x/2.89x PE/PBV levels.
2. JSMR IJ posted revenue of IDR3.49 trillion in 1Q21, down -16.4% YoY (vs IDR4.17 trillion in 1Q20). COGS decreased from IDR2.38 trillion in 1Q20 to IDR1.83 trillion in 1Q21. JSMR posted a net profit of IDR161.84 billion in 1Q21 which decreased -70.57% YoY (vs IDR587.93 billion in 1Q20) (Bisnis Indonesia). MNCS Comment: The unrecovered volume of vehicles and the company's high cost of funds have caused JSMR's profit to decline. JSMR is currently trying to divest some of its assets. Currently JSMR is trading at 37.01x/1.25x PE/PBV levels.
3. WSKT IJ posted net sales of IDR2.67 trillion in 1Q21, down -35.81% YoY (vs IDR4.17 trillion in 1Q20). COGS decreased from IDR3.33 trillion in 1Q20 to IDR2.37 trillion in 1Q21. WSKT posted a net loss of IDR46.09 billion in 1Q21 (vs net profit of IDR42.69 billion in 1Q20) (Kontan). MNCS Comment: The lack of new contracts and the low burn rate have resulted in lower topline. WSKT is currently trying to divest to reduce the company's cost of funds. Currently WSKT is trading at 1.51x PBV levels.
IHSG Updates
JCI slipped by -1.38% to 5,939.47 on Monday (28/06) while net foreign buy reaching IDR68.18 billion. JCI closing was lower along with most sectors, led by basic industry (-2.55%), followed by industrial (-2.50%), and infrastructure (-2.18%). On the other hand, the health sector climbed up by (+2.86%), followed by non-cyclical (+0.05%). JCI weakened due to the negative sentiment in response to Covid-19 cases outbreak especially in Indonesia. While the positive sentiment driving farmation stock increase is related to the Food and Drug Administration (BPOM) which has just announced that it will soon conduct clinical trials on Ivermectin produced by Indofarma as a Covid-19 drug. Meanwhile, the Rupiah exchange rate was weakening at IDR14,445. We estimate the JCI will move in the range of 5,900-6,080 while waiting for inflation rate data MoM release. Today's recommendation: INCO, JPFA, BRPT, ASRI.
Corporate Action
Cum Dividend Date: JRPT (IDR22/share)
RUPS: LPKR, SMMA
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