MNCS Morning Navigator

08 April 2022

MNCS Morning Navigator April 8, 2022

Global Market Highlights

DJIA rose +0.25% on Thursday (07/04), followed by the S&P 500 (+0.43%) and the Nasdaq (+0.06%). Wall Street managed to close higher amid the Fed's more aggressive monetary tightening plan that overshadowed the market. While positive catalysts came from: 1) initial jobless claims as of 2-Apr which fell to 166 thousand 2) consumer credit in Feb-22 which rose to USD41.82 billion (highest for 20 years). Today, the market will be looking toward several data releases such as: 1) US Wholesale Inventories MoM; 2) Japan Consumer Confidence; 3) Japan Eco Watchers Survey Outlook.

Domestic Update
• Bank Indonesia reported FX reserves position stood at USD139.1 billion as at end Mar-22 or declining USD2.3 billion from previous month. MNCS Comment: The decline in FX reserves was attributable to government external debt payment. However, FX reserves remained high equal to 7.2 months imports or 7.0 months import and external debt payment, therefore supporting indonesia’s external stability.
• Furthermore, the second dose of vaccination rate nationally has reached 77.2% or equivalent to 160.81 million people.

Company News
1. SSMS IJ recorded sales of IDR5.2 trillion in FY21 or an increase of +29.71% YoY (vs IDR4.01 trillion in FY20). Net profit rose +162% YoY to IDR1.51 trillion in FY21 (vs IDR576.63 billion in FY20) (Investor Daily). MNCS Comment: Performance growth was driven by the increase in CPO sales by +21.51% YoY to IDR4.41 trillion in FY21. This was followed by the company's success in controlling selling expenses and finance expenses, which fell -0.49% YoY and -4.59% YoY in FY21, respectively. SSMS is trading at the level of 7.07x/1.76x PER/PBV.
2. KRAS IJ recorded a monthly record high, with steel export sales of 116.41 thousand tons on Mar-22 where KRAS exports Hot Rolled Coil (HRC) steel and Rolled Pickled Oil (HRPO) to several countries such as Pakistan, Vietnam, Turkey, Greece, and Italy (Bisnis Indonesia). MNCS Comment: The company was able to break the record for steel export sales throughout the history of the company. Previously, the largest export sales were recorded at 63.73 thousand tons on Jan-22. It is hoped that the company can improve its performance in FY22E, amidst growing demand. KRAS is trading at the level of 7.84x/0.72x PER/PBV.
3. LPKR IJ booked a revenue of IDR16.53 trillion in FY21 or an increase of +38% YoY (vs IDR11.97 trillion in FY20). Net loss recorded improvement to IDR1.60 trillion in FY21 (vs net loss of IDR8.89 trillion in FY20) (Bisnis Indonesia). MNCS Comment: The increase in top line was supported by marketing sales which exceeded the target of IDR4.2 trillion, to IDR4.9 trillion in FY21. On the other hand, COGS, which increased +37.88% YoY to IDR10.59 trillion, was one of the weighting factors for bottom line performance. LPKR is trading at the level of 0.49x PBV.

IHSG Updates
JCI rose +0.33% to 7,127.37 on Thursday (07/04), followed by net foreign buy which reached IDR538.71 billion. The majority of sectors strengthened and pushed the index rate, led by the financial sector (+0.72%) followed by the raw materials sector (+0.69%). On the other hand, the weakening sector was led by the technology sector (-1.17%) followed by the transportation sector (-1.15%). The performance of the index outperformed with Asian markets closing lower, investors responded positively to the Mar-22 Foreign Exchange Reserves (Cadev) which remained solid. On the other hand, the Rupiah exchange rate closed low at IDR14,359/USD. We estimate that the JCI will move in the price range of 7,100-7,150 while waiting for the release of Consumer Confidence MAR data. Today’s recommendation: BGTG, BEBS, UNTR, RALS.

Corporate Action
Cum Dividend: GOOD (IDR6/share), SMGR (IDR172.64/share)
IPO: SICO (IDR230/share)

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