MNCS Morning Navigator

18 April 2022

MNCS Morning Navigator April 18, 2022

Global Market Highlights
DJIA closed on Friday (15/04) to celebrate Good Friday, last trade on Thursday (14/04) DJIA weakened -0,33% followed by S&P 500 (-1.21%) and Nasdaq (-2.14%). Wall Street was under pressure as: 1) US T-note 10 Y yield rose to 2.83%; 2) increase in initial jobless claims as of 9-Apr by 185,000; 3) The Fed's hawkish note hinting at a +50 bps rate hike sees inflation rates worsen. Today, the market will be looking toward several data releases such as: 1) US NAHB Housing Market Index; 2) US 3-month Bill Auction; 3) US 6-month Bill Auction.

Domestic Update
• Indonesia's trade balance is projected to have a surplus of USD2.89 billion in Mar-22, supported by higher exports than imports (exports : +23.8% YoY; imports : +18.3% YoY). MNCS Comment: Export performance remained solid, supported by persistently high global commodity prices. The continued surplus in the trade balance served as a positive catalyst for Rupiah stability and inflows of foreign funds, especially to the domestic stock market.
• Furthermore, the second dose of vaccination rate nationally has reached 78.1% or equivalent to 162.75 million people.

Company News
1. ERAA IJ recorded net sales of IDR43.46 trillion in FY21 or up +27.41% YoY (vs IDR34.11 trillion in FY20). Net profit increased by +65.41% YoY to IDR1.01 trillion in FY21 (vs IDR612 billion in FY20) (Bisnis Indonesia). MNCS Comment: The increase in ERAA's performance was driven by sales of cellular phones and tablets, which increased +31.96% YoY to IDR34.35 trillion. Meanwhile gross profit margin increased to 11.05% in FY21 (vs 9.99% in FY20). ERAA is trading at the level of 8.51x/1.40x PER/PBV.
2. CTRA IJ posted revenue of IDR9.72 trillion in FY21 or up +20.55% YoY (vs IDR8.07 trillion in FY20). Net profit increased +32.34% YoY to IDR1.73 trillion in FY21 (vs IDR1.31 trillion in FY20) (Bisnis Indonesia). MNCS Comment: The largest contribution to CTRA's revenue came from sales of land lots, residential houses and shop houses of IDR5.62 trillion, up +11.29% YoY. Meanwhile COGS also increased +23.86% YoY. CTRA is trading at the level of 10.32x/1.06x PER/PBV.
3. ELSA IJ targets net profit in FY22E to increase +85% YoY to IDR200 billion (vs IDR108 billion in FY21). Up to 1Q22, the company has achieved 37.5% of the net profit target of IDR75 billion (Emitennews). MNCS Comment: The company's optimism is followed by diversification, from upstream (establishment of Upstream Sub Holding) to downstream oil and gas, such as infrastructure development, digitization, upstream chemical support opportunities, and green energy services. This year, the company has budgeted a capex of IDR700 billion. ELSA is trading at the level of 19.33x/0.55x PE/PBV.

IHSG Updates
JCI closed on Friday (15/04) to celebrate Good Friday, last trade on Thursday (14/04) JCI weakened -0,38% to 7,235.53 followed by net foreign buys which reached IDR80.13 billion. A number of sectors weakened and weighed on the index, led by the raw materials sector (-0.68%) followed by the non-cyclical sector (-0.48%). On the other hand, the sector that experienced strengthening was led by the health sector (+1.79%) followed by the transportation sector (+1.34%). The index depreciated in line with investors' concerns regarding the negative economic outlook due to the impact of the Russia-Ukraine conflict which was starting to be felt, marked by an increase in some raw material prices and reinforced by data on Mar-22 inflation which rose +0.66% MoM/+2.64% YoY. 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 7,200-7,260 while waiting for the release of Balance of Trade MAR, Exports YoY MAR and Imports YoY MAR data. Today’s recommendation: ZINC, AVIA, CPIN, INCO.

Corporate Action
Cum Dividend: EAST (IDR1.52/share), PRDA (IDR397.84/share)

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