MNCS Morning Navigator 4 January 2021

Global Market Highlight

DJIA rose by +0.65% on Thursday (31/12) followed by S&P 500 (+0.64%) and Nasdaq (+0.14%). Wall Street  closed 2020 with a top record. This performance is quite surprising considering that the US economy is experiencing a recession this year due to the pandemic in late March, which caused the market quickly reversed its course from economic depression concerns after the US Central Bank's The Federal Reserves and the White House rolled out stimulus packages. Performance continues to lift until the summer. However, in the fall, the market was volatile again ahead of the US presidential election and with the increase in the number of positive cases. At the end of the year, the Wall Street got some fresh air from sentiment over the discovery of vaccine that raised hopes of an economic recovery in 2021. Moreover, the market will look forward to several data releases today, such as: 1) US PMI Markit Manufacturing; 2) China Caixin PMI Manufacturing; 3) UK PMI Manufacturing Final.

Domestic Update

• The government extends the time for providing the electricity sector stimulus until March 2021. The estimation of PLN customers who receive the benefits of the stimulus extension is as many as 33.7 million customers. The total budget requirement from the government for the program is IDR4.57 trillion.
• Furthermore, there is an additional of 1.657 new Covid-19 cases in Jakarta yesterday.

Company News

1. KLBF IJ through its subsidiary PT Kalbe-Genexine Biologics has received approval for the implementation of clinical trials from the Indonesian Food and Drug Administration (BPOM). The agreement is to carry out a phase-2 clinical trial of the drug GX-17, an immunotherapeutic drug that will be developed as a treatment for COVID-19 patients. This phase 2 clinical trial is estimated to take 6 months (Market Bisnis). MNCS Comment: We see this as a good progress from KLBF to develop the Covid-19 vaccine which will be a long term catalyst. KLBF is currently traded at 25.66x/4.07x PE/PBV.
2.  WIKA IJ targets three projects to be completed in 2021, namely: 1) MRT Station Sanying Line Taiwan which has a contract value of IDR226.74 billion. WIKA targets this project to be completed in May 2021; 2) Then Construction & Commissioning (EPCC) TSL Furnace Ausmelt is a project owned by PT Timah Tbk (TINS) with a value a contract of IDR796 billion. This project is targeted for completion in August 2021; 3) the EPC of the Ammonium Nitrate Project is a project owned by PT Kaltim Ammonium Nitrate with a contract value of IDR467.8 billion. This project is targeted for completion in June 2021 (Kontan). MNCS Comment: We see that in FY21E, WIKA will be focused to complete their infra projects that has been delayed in FY20. WIKA is currently traded at 266.06x/1.32x PE/PBV.
3. JPFA IJ recorded an export value reaching IDR508.6 billion in FY20. The exported goods include processed chicken products, carcass, day old chicken, vaccines, livestock medicine, and aquaculture products. Export has been done to te US, Japan, Taiwan, Timor, Singapore, Philippines, Myanmar, Vietnam and Malaysia (Investor Daily). MNCS Comment: Despite the pandemic, JPFA still prioritize their quality to compete globally. JPFA is currently traded at 50.10x/1.61x PE/PBV.

IHSG Updates

JCI dropped by -0.95% to 5,979.07 on Wednesday (30/12) although followed by net foreign buy reaching IDR76.07 billion. JCI continued it's decline which was caused by profit taking at the last trading day. All sectors fell but agriculture and trade sectors remain strong. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,050. We estimate JCI will move in the range of 6,000 – 6,140 while waiting for PMI Markit Manufacturing data release. Today's recommendation: KLBF, BTPS, PGAS, JSMR.

Corporate Action

IPO: FAPA (IDR1,840/share)

RUPS: MAYA, TRIL

Disclaimer On

KLBF, BTPS, PGAS, JSMR, FAPA, MAYA, TRIL