MNCS Morning Navigator

21 April 2022

MNCS Morning Navigator April 21, 2022

Global Market Highlights
DJIA rose +1.17% on Wednesday (20/04), While the S&P 500 weakened (-0.06%) followed by the Nasdaq (-1.22%). Wall Street closed mixed, positive catalyst came from the weakening US T-note yield of 10Y -9.6 bps to 2.84%. Meanwhile, the negative sentiment came from the hawkish tone of the Fed, which expressed the uncertainty of the world outlook in line with the Russia-Ukraine geopolitical tensions. Today, the market will be looking toward several data releases such as: 1) US Philadelphia Fed Manufacturing Index; 2) US CB Leading Index MoM; 3) France Business Confidence.

Domestic Update
• Up to 1Q22, the tax revenue has reached IDR322.36 trillion or grew 41.36% YoY. With this amount, 25.49% of the 2022 State Budget target has been achieved. MNCS Comment: We see that the government is quite optimistic that the tax revenue target in FY22E can be achieved in line with the trend of economic recovery.
• Furthermore, the second dose of vaccination rate nationally has reached 78.3% or equivalent to 163.08 million people.

Company News
1. DSNG IJ will distribute cash dividends of IDR212 billion or equivalent to IDR20 per share. Dividend payout ratio of 29% from the FY21 net profit of IDR727 billion (Bisnis Indonesia). MNCS Comment: Therefore, DSNG will offer a dividend yield of 3.17% or greater than the FY20 yield of 1.60%. DNSG is currently trading at 9.18x/0.97x PER/PBV levels.
2. ROTI IJ plans to buyback shares with the prepared funds reaching IDR227.27 billion, while the maximum number of shares that will be absorbed is 133,691,299 shares (iQ plus). MNCS Comment: The target share absorbed is equivalent to 1.84% of the issued capital, while the buyback action can suppress fluctuations in stock price movements which can create stability. Currently ROTI is trading at 29.47x/2.91x PER/PBV.
3. ASII IJ set a capital expenditure allocation (Capex) for FY22F of around IDR18-20 trillion, close to the allocation that existed before the pandemic (Kontan). MNCS Comment: We hoped that higher capex allocation can support the company's expansion steps in the future, in line with the momentum of the post-pandemic economic recovery. Currently HRUM is trading at 13.83x/1.62x PER/PBV.

IHSG Updates
JCI rose +0.39% to 7,227.36 on Wednesday (20/04), followed by net foreign buy which reached IDR833.05 billion. The majority of sectors strengthened and supported the index's pace, led by the infrastructure sector (+2.77%) followed by the financial sector (+2.03%). On the other hand, the weaker sector was led by the energy sector (-1.25%) followed by the transportation sector (-1.05%). The movement of the index was in line with Wall Street, the continued net buying of foreign investors also contributed to the strengthening of the index. On the other hand, the Rupiah exchange rate closed low at IDR14,356/USD. We estimate that the JCI will move in the price range of 7,170-7,260. Today’s recommendation: BBRI, FREN, TOWR, UNTR.

Corporate Action
Cum Dividend: ROTI (IDR60.2/share), AUTO (IDR40/share)

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