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MNCS Morning Navigator

20 April 2022

MNCS Morning Navigator April 20, 2022

Global Market Highlights
DJIA rose +1.45% on Tuesday (19/04), followed by the S&P 500 (+1.61%) and the Nasdaq (+2.15%). Wall Street strengthened along with the release of the issuer's performance in 1Q22 which showed positive results. In addition, the release of Housing Starts Mar-22 data which grew +0.3% MoM to 1.79 million (vs consensus at 1.74 million) also served as a positive catalyst for Wall Street. Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2) US Existing Home Sales MoM; 3) Japan Tertiary Industry Index MoM.

Domestic Update
• Bank credit grew 6.65% YoY on Mar-22, which was higher than the previous 6.33% YoY. BI expects the credit to grow 6-8% this year. MNCS Comment: We view that 6-8% credit growth can still be achieved in line with improvement in supply & demand. On the other hand, adequate banking liquidity and gradually recovering demand have been the main drivers of positive credit growth this year.
• Furthermore, the second dose of vaccination rate nationally has reached 78.2% or equivalent to 162.95 million people.

Company News
1. TOWR IJ booked revenue of IDR8.64 trillion in FY21 or grew +15.98% YoY, which also boosted net profit growth of +20.85% YoY to IDR3.43 trillion (Kontan). MNCS Comment: The positive performance that TOWR has maintained in FY21 indicates a 5Y CAGR on revenue of +14.2% and EBITDA of +13.9%. With a tower portfolio of >28,000 units (tenancy ratio 1.88x) after the acquisition of STP, it is expected that it might drive the company's business growth in the future. Furthermore, the prospect of the domestic tower industry which is more attractive than foreign competitors, as seen through the ROI and the EBITDA margin, may attract foreign investment to encourage the expansion of tower issuers even further. TOWR is currently trading at 15.11x/4.30x PER/PBV.
2. WEGE IJ recorded a New Contract Value (NKB) up to 1Q22 reaching IDR2.64 trillion, which was obtained among others through the construction of PT Bio Farma facilities, the Revitalization of Halim Perdanakusuma Airport, to the construction of Kediri Airport phase 2 (Market Bisnis). MNCS Comment: Total acquisition of new contracts in 1Q22 is equivalent to 37.18% of the total contract value targeted in 2022 of IDR 7.10 trillion (+68.25% YoY). Furthermore, the nominal value of new contracts per 1Q22 almost matched the realization in FY21 of IDR2.76 trillion (96%). With this achievement, it is expected to encourage the company's future revenue performance. WEGE is currently trading at 8.06x/0.73x PER/PBV.
3. HRUM IJ plans to do a stock split with a ratio of 1:5, which will be scheduled at the RUPSLB on May-22 later (Investor.id). MNCS Comment: The stock price movement has strengthened by +33.17% year-to-date. In our view, the strengthening of prices is also supported by good company fundamentals, where in FY21 the company managed to record an increase in its top-bottom line reaching +113% YoY/+25.6% YoY. The stock split plan is expected to increase stock trading liquidity. HRUM is currently trading at 35.14x/5.56x PER/PBV.

IHSG Updates
JCI weakened -1.05% to 7,199.23 on Tuesday (19/04), followed by net foreign buy which reached IDR427.47 billion. Almost all sectors weakened and weighed on the index, led by the transportation sector (-2.44%) followed by the cyclical sector (-1.53%). On the other hand, the sector that experienced strengthening was the infrastructure sector (+0.66%). The index was depressed following the steps of Bank Indonesia (BI) which cut its projection for Indonesia's economic growth in 2022 to 4.5%-5.3% from 4.7%-5.5%. This consideration was taken as the outlook for export performance was held back due to low global economic growth as a result of the Russia-Ukraine conflict. On the other hand, the Rupiah exchange rate closed low at IDR14,344/USD. We estimate that the JCI will move in the price range of 7,170-7,230. Today’s recommendation: INKP, INDF, PGAS, SAME.

Corporate Action
IPO: MTMH (IDR1,280/share)
RUPS: DSNG, ASII

Disclaimer On

TOWR WEGE HRUM INKP INDF PGAS SAME

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