MNCS Morning Navigator

26 April 2022

MNCS Morning Navigator April 26, 2022

Global Market Highlights
DJIA rose +0.70% on Monday (25/04), followed by the S&P 500 (+0.57%) and the Nasdaq (+1.29%). Wall Street appreciated in line with the decline in the yield of US T-note 10Y to 2.76%, while the decline in expectations of the inflation rate also contributed to the strengthening of Wall Street. Today, the market will be looking toward several data releases such as: 1) US Durable Goods Orders MoM; 2) US CB Consumer Confidence; 3) UK Public Sector Net Borrowing.

Domestic Update
• The government has issued bonds worth IDR306.4 trillion until April 13, 2022, which consists of: 1) IDR228 trillion denominated in rupiah and IDR18.4 trillion denominated in foreign currencies. MNCS Comment: We see the prospect of issuance of government bonds this year will be lower in line with the government's policy to use SAL and commitment to reduce issuance by IDR100 trillion.
• Furthermore, the second dose of vaccination rate nationally has reached 78.7% or equivalent to 163.96 million people.

Company News
1. TLKM IJ prepared a capex of 25% of the revenue target in FY22E, where the company targets 4%-6% YoY revenue growth in FY22E. Capex will be used to build digital platforms such as data centers, cloud services, connectivity development, construction of Telkomsel BTS, and for the construction of Mitratel (Bisnis Indonesia) towers. MNCS Comment: As a result, TLKM's capex is estimated to be around IDR37 trillion for FY22E. It is hoped that the capex will realize the company's efforts to transform into a digital telco. Up to today, TLKM has 27 data centers with 22 domestic data centers and 5 overseas data centers. Currently, TLKM is trading at the level of 18.84x/3.84x PER/PBV.
2. BBRI IJ recorded net interest income of IDR30.68 trillion in 1Q22 or up +11.23% YoY (vs IDR27.59 trillion in 1Q21). Net profit increased by +78.24% YoY to IDR12.17 trillion in 1Q22 (vs IDR6.83 trillion in 1Q21) (CNBC Indonesia). MNCS Comment: BBRI's significant net profit increase was supported by the pro forma profit from the acquisition of PT Pegadaian and PNM of IDR12.22 trillion, up +57.64% YoY (vs IDR7.75 trillion in 1Q21). Currently, BBRI is trading at 15.07x/2.69x PER/PBV.
3. BSDE IJ recorded revenue amounting to IDR2.5 trillion in 1Q22 or up 32% YoY. This achievement is equivalent to 32% of the company's target in FY22E of IDR7.7 trillion (Bisnis Indonesia). MNCS Comment: The biggest contribution came from sales of the residential segment of 64% of total marketing sales. The company is optimistic that it can achieve the target in FY22E, supported by the stimulus by the Government, and capacity development carried out by BSDE as a developer. Currently, BSDE is trading at 14.48x/1.99x PER/PBV levels.

IHSG Updates
JCI weakened -0.13% to 7,215.98 on Monday (25/04), followed by net foreign buys which reached IDR3.50 trillion. The majority of sectors weakened and weighed on the index, led by the transportation sector (-2.24%) followed by the energy sector (-1.29%). On the other hand, the sector that experienced strengthening was the infrastructure sector (+0.33%) followed by the financial sector (+0.29%). The weakening of the index is in line with the movement of Asian markets. Negative sentiment came from the government's decision to impose a ban on exports of CPO and cooking oil products, which has the potential to hamper state revenues and trigger a current account deficit. On the other hand, the Rupiah exchange rate closed low at IDR14,458/USD. We estimate that the JCI will move in the price range of 7,200-7,260. Today’s recommendation: EXCL, BBRI, ADRO, KLBF.

Corporate Action
Cum Dividend: TPIA (IDR7.3/share), WTON (IDR1.9/share)

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