MNCS Morning Navigator

14 April 2022

MNCS Morning Navigator April 14, 2022

Global Market Highlights
DJIA rose +1.01% on Wednesday (13/04), followed by the S&P 500 (+1.12%) and Nasdaq (+2.03%). Wall Street appreciated along with the decline in the yield of US T-note 10Y to 2.69% which boosted stocks of tech, helped by a positive catalyst in the form of the release of data on the producer price index (PPI) Mar-22 which rose +1.4% MoM/ +11.2% YoY. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM; 2) US Michigan Consumer Sentiment Prel; 3) US Business Inventories MoM.

Domestic Update
• The Ministry of Finance reported that state revenues reached IDR302.42 trillion; state spending of IDR282.71 trillion as of Feb-21. APBN surplus of IDR19.71 trillion or +0.11%. MNCS Comment: We view positively that the budget was having a surplus until Feb-22. It is likely that the budget deficit in 2022 will be lower than last year and the 2022 target. However, budget-related risks come from a potential increase in the subsidy burden amid rising prices for domestic goods and services.
• Furthermore, the second dose of vaccination rate nationally has reached 77.7% or equivalent to 161.77 million people.

Company News
1. ASII IJ recorded car sales of 142,044 units in 1Q22 or an increase of +43.69% YoY (vs 98,853 units in 1Q21). This figure is above pre-pandemic levels (vs 134,287 units in 1Q19) (Bisnis Indonesia). MNCS Comment: We assess that domestic car sales have recovered, in line with the success of the Government in carrying out economic recovery through several policies such as PPnBM borne by the Government. In Mar-22, ASII car sales increased +21.3% MoM. ASII is trading at the level of 13.98x/1.64x PER/PBV.
2. AALI IJ will distribute dividends of IDR887 billion in FY21 or equivalent to IDR461/share. However, previously AALI had distributed an interim dividend on Oct-21 of IDR102/share, hence the cash dividend to be distributed will be IDR359/share with the cum dividend date on 26 April 2022 (Emitennews). MNCS Comment: Dividend Payout Ratio of 45% of FY21 net profit of IDR1.97 trillion. Dividend yield cash of 2.80%. AALI is trading at the level of 12.52x/1.20x PER/PBV.
3. WIKA IJ has obtained a new contract of IDR9.28 trillion as of Mar-22, or has reached 21.79% of the FY22E target (IDR42.57 trillion), where the company targets new contracts of 67% from the company, and the remaining 33% from subsidiaries. (Emitennews). MNCS Comment: The company is optimistic to achieve the target this year in line with the sloping Covid-19 case, accelerated vaccination, and the government's PEN program with the new contract target increased by +58.78 YoY (vs the realization of IDR26.81 trillion in FY21). WIKA is trading at the level of 71.66x/0.65x PE/PBV.

IHSG Updates
JCI rose +0.67% to 7,262.78 on Wednesday (13/04), followed by net foreign buys which reached IDR1.18 trillion. A number of sectors strengthened and supported the index, led by the energy sector (+3.46%) followed by the infrastructure sector (+2.05%). On the other hand, the weaker sector was led by the non-cyclical sector (-0.66%) followed by raw materials (-0.11%). The re-escalation of geopolitical tensions between Russia and Ukraine after the peace talks ended at a stalemate, triggering an increase in commodity prices which had a positive impact on the domestic market. On the other hand, the Rupiah exchange rate closed low at IDR14,363/USD. We estimate that the JCI will move in the price range of 7,200-7,300. Today’s recommendation: BBCA, BTPS, CTRA, TBIG.

Corporate Action
Cum Dividend: JPFA (IDR60/share)

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