Global Market Highlight
DJIA slipped by -0.30% on Monday (09/08) followed by the S&P 500 (-0.09%), while Nasdaq rose by +0.16%. Wall Street closing was mixed along with worries of crude oil demand along with rising Covid-19 cases and the restrictions potential, particularly in China, raised concern about the fuel demand outlook. While investors focus on US inflation readings this week for hints about the Federal Reserve policy. Today the market may be watching several data releases such as: 1) Germany ZEW Economic Sentiment Index; 2) Eurozone ZEW Economic Sentiment Index; 3) Japan Bank Lending YoY.
Domestic Update
• Indonesia's consumer confidence index plunged 27.2 points to 80.2 in July-21 according to Bank Indonesia (BI). It was the weakest reading since October-20. MNCS Comment: Consumers turned pessimistic amid stricter social and public health measures to contain the spread of the Covid-19 in some regions. All of the 6 sub-indices deteriorated with current economic conditions (-23.2 points), economic outlook (-31.2 points), the assessment of current income (-25.4 points), income expectations for the next six months (-24.9 points), job availability compared to six months ago (-30.3 points), and job availability expectations (-30.2 points). Government has decided to continue its tight social restriction or PPKM level 4 for some regions up until August 16, 2021. We believe that in the short term the domestic economy will remain under pressure.
• Furthermore, there was an addition of 727 new Covid-19 cases in Jakarta yesterday.
Company News
1. SIDO IJ will distribute an interim dividend of IDR15.30/share based on the financial statements of 1H21. The cum dividend date is on August 13, 2021 (Kontan). MNCS Comment: The total dividend amounts to IDR459 billion which equals 91% payout ratio from SIDO’s 1H21 net profit of IDR502 billion. The dividend yield stood at 1.89%. Currently SIDO is trading at 24.20x/7.68x PE/PBV levels.
2. MIKA IJ posted revenue of IDR2.38 trillion in 1H21 or up +65.28% YoY (vs IDR1.44 trillion in 1H20). COGS increased from IDR789.32 billion in 1H20 to IDR1.12 trillion in 1H21. MIKA recorded a net profit of IDR615.87 billion in 1H21 or up +113.30% YoY (vs IDR288.74 billion in 1H20) (Kontan). MNCS Comment: This achievement indicates 58% of MNCS' revenue target in FY21E. Growth is supported by increased inpatient care due to Covid-19. Meanwhile net income is equivalent to 63% of the MNCS target in FY21E. Currently MIKA is trading at 27.64x/6.12x PE/PBV levels.
3. BKSW IJ recorded a net interest income of IDR160.28 billion in 1H21 or up +40% YoY (vs IDR140.57 billion in 1H20). Operating Expenses increased from IDR730.24 billion in 1H20 to IDR766.03 billion in 1H21. BKSW recorded a net loss of IDR578.46 billion in 1H21 or an increasing loss (vs a net loss of IDR537.94 billion in 1H20) (IQ Plus). MNCS Comment: We see that the decline in net income is largely driven by high provision costs and compensation from credit recovery. Credit disbursement was also observed to weaken by 12.9% YoY. Currently BKSW is trading at 1.88x PBV levels.
IHSG Updates
JCI fell by -1.22% to 6,127.46 on Monday (09/08) followed by net foreign sell reaching IDR670.15 billion. Almost all sectors were weakened, led by basic industry (-2.02%) followed by the health sector (-1.57%). On the other hand, the transport sector strengthened by 2.24% followed by cyclical (+0.71%). JCI closed lower as investors were still waiting for a decision for PPKM continuity. Daily cases of Covid-19 outbreak are still high of 20,000-30,000 people per day, with mortality rate above 1,000 cases per day. Meanwhile the Rupiah exchange rate was weakening at IDR14,363. We estimate the JCI will move in the range of 6,100-6,200 while waiting for the retail sales data release. Today's recommendation: SIMP, HMSP, ICBP, IPCM.
Corporate Action
Cum Dividend Date: SMSM (IDR20/share), PANS (IDR100/share), SOHO (IDR197/share)
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