Global Market Highlight
DJIA fell by -0.42% on Friday (30/07) followed by the S&P 500 (-0.54%) and Nasdaq (-0.71%). Wall Street closed lower as Amazon.com shares dropped after the company forecast lower sales growth. Most techno stocks are weakened, such as Facebook's share price was down -0.56%, Alphabet (Google's holding company) was down -0.77%, followed by Microsoft (-0.55%). Market is still aware about the spike of Covid-19 outbreak in the US . Today the market may be watching several data releases such as: 1) US Markit Manufacturing PMI Final; 2) US ISM Manufacturing PMI; 3) Germany Markit Manufacturing PMI Final.
Domestic Update
• Indonesia Markit Manufacturing PMI slipped into a contraction in July-21. Last month's figure was 40.1 points. July’s reading signaled the first contraction for Indonesia’s manufacturing sector in nine months, with the rate of decline the fastest since June-20. MNCS Comment: Resurging Covid-19 which brought about PPKM Level 4 is the main reason behind the contraction. Today also marks the last day of implementation of PPKM Level 4 in Java and Bali. However the region outside Java which remained to be the red zone to stay under this strict policy. We believe the government will gradually ease PPKM accordingly. Although daily cases seemed to drop recently, high fluctuation indicates that the risk lingers.
• Furthermore, there was an addition of 2,701 new Covid-19 cases in Jakarta yesterday.
Company News
1. INTP IJ posted IDR6.66 trillion revenue in 1H21 or rose by +7.35% YoY (vs IDR6.17 trillion in 1H20). COGS increased from IDR4.29 trillion in 1H20 to IDR4.57 trillion in 1H21. INTP recorded a net profit of IDR586.57 billion in 1H21 or up +20.54% YoY (vs IDR470.03 billion in 1H20) (Kontan). MNCS Comment: The increase of INTP's revenue was in line with cement sales in 1H21 of 7.6 million tons or an increase of 6% YoY, subsequently sales in Jun-21 reached 1.4 million tons. We believe the higher demand on residential property will drive the sector to be better this year. Currently INTP is trading at 27.61x/1.42x PE/PBV levels.
2. HEAL IJ posted IDR3.09 trillion revenue in 1H21 or +78.86% higher YoY (vs IDR1.73 trillion in 1H20). COGS increased from IDR1.01 trillion in 1H20 to IDR1.43 trillion in 1H21. HEAL recorded IDR554.65 billion net profit in 1H21 or up +422.5% YoY (vs IDR104.22 billion in 1H20) (Bisnis Indonesia). MNCS Comment: Hospitalization revenue grew quite significantly by 98% YoY, this was due to the increasing occupancy along with the spread of Covid-19 cases in Indonesia. Currently HEAL is trading at 15.38x/6.27x PE/PBV levels.
3. INAF IJ recorded revenue of IDR849.32 billion in 1H21 or up +90% YoY (vs IDR447.29 billion in 1H20). COGS increased from IDR327.88 billion in 1H20 to IDR552.48 billion in 1H21. INAF recorded a net profit of IDR977 million in 1H21 or an increase (vs net loss of IDR4.67 trillion in 1H20) (Bisnis Indonesia). MNCS Comment: We believe that the pharmaceutical sector will remain solid in line with the high demand for medical devices and drugs, especially during the pandemic. Management targets FY21E sales to reach IDR2.55 trillion driven by the increase in the medical devices and medicine segment. Meanwhile, the allocated capex reached IDR31.4 billion. Currently INAF is trading at 1,128.52x/19.01x PE/PBV levels.
IHSG Updates
JCI slipped by -0.83% to 6,070.04 on Friday (30/07) followed by net foreign sell reaching IDR563.04 billion. JCI closing was lower along with most sectors led by non-cyclical (-2.60%) followed by finance (-1.24%). On the other hand, the industrial sector rose by +0.93%, followed by techno (+0.92%). JCI closing was lower as economic growth is predicted to be lower in line with the social restrictions due to the spike of Covid-19 outbreak. The decline in growth mainly occurred in household consumption even though the government has increased social assistance stimulus, and continued strong export performance. Meanwhile the Rupiah exchange rate was strengthening at IDR14,463. We estimate the JCI will move in the range of 6,020-6,120 while waiting for inflation rate YoY. Today's recommendation: ELSA, LPPF, PTBA, LSIP.
Corporate Action
Cum Dividend Date: LPIN (IDR117/share), MYOR (IDR52/share), PBSA (IDR27/share)
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