Global Market Highlight
DJIA rose by +0.04% on Friday (13/08) followed by the S&P 500 (+0.16%), and Nasdaq (+0.04%). Wall Street closing was slightly higher, boosted by company earnings that exceeded forecasts. On the other hand, the producer price index as of July-21 (which excludes components of food, trade services and energy) was at 0.9% MoM or slightly higher than economists consensus at 0.5%. Today the market may be watching several data releases such as: 1) Canada BoC Senior Loan Officer Survey; 2) China Industrial Production YoY; 3) Japan GDP Growth Annualized Prel.
Domestic Update
• Indonesia through MoF decided to set the tariff for testing the validity of the Rapid Diagnostic Test Antigen at IDR694,000/test and with non-tax state revenue (PNBP) of IDR0/test or 0%. MNCS Comment: This policy is aimed to provide a valid rapid diagnostic for society which we believe can increase confident and depicting more accurate figure of outbreak dynamics. However this government also needs to take a serious action on boosting testing and tracing as recent number test performed remain inconsistent that could lead to a vast number of unreported cases and misinterpretation about Covid-19 infection development. Besides that, we urge government to be more aggressive in healthcare budget disbursement under PEN considering the realization as of the end July-21 only stood at IDR65.5tn from IDR214.95tn or 30.4% from the target. With the current run rate and without any concrete actions, economic recovery could be slower than expected.
• Furthermore, there was an addition of 1,182 new Covid-19 cases in Jakarta yesterday.
Company News
1. ASII IJ recorded 32,968 units of car sales per July-2021,an increase of 225.03% YoY (vs 10,140 units in July-2020). The largest Astra’s car sales were contributed by Toyota of 21,826 units (Kontan). MNCS Comment: We see that ASII car sales increased by +225.03% YoY, while the amount decreased by 19.41% MoM (vs 40,910 units in June-2021). This is due to tighter social restrictions in July-2021, until the end of July-2021 there is an improvement in car sales compared to at the beginning of the pandemic. Currently ASII is trading at 11.52x/1.25x PE/PBV levels.
2. WIKA IJ posted IDR11.8 trillion new contracts as of July 2021. This realization is equivalent to 29.41% of the new FY21E contract target of IDR40.12 trillion. The biggest contribution of the company's new contracts was from the infrastructure, building sector, and the industrial sector (Bisnis Indonesia). MNCS Comment: WIKA is trying to optimize tenders in 2H21, several contract tenders have entered the pipeline worth IDR27 trillion. However, we assess that the spread of Covid-19 is still high, causing limited projects to be carried out. Currently WIKA is trading at 25.39x/0.51x PE/PBV levels.
3. LSIP IJ recorded IDR2.18 trillion revenue in 1H21 rose by +38.85% YoY (vs IDR1.57 trillion in 1H20). COGS increased from IDR1.29 trillion in 1H20 to IDR1.42 trillion in 1H21. LSIP posted IDR501.22 billion net profit in 1H21 increased by +444.86% YoY (vs IDR91.99 billion in 1H20) (Emitennews). MNCS Comment: LSIP's 1H21 performance is slightly lower than our consensus, reaching by 46%. However, the 2Q21 performance is much improved than the 1Q21. The 25% YoY increase on CPO ASP accompanied by several cost efficiencies has promoted LSIP's profit to staggeringly increase. Currently LSIP is trading at 7.73x/0.79x PE/PBV levels.
IHSG Updates
JCI was flat by -0.00% to 6139.49 on Friday (13/08) while net foreign buy reaching IDR447.51 billion. JCI closing was flat while several sectors fell, led by the cyclical sector (-1.66%) followed by the tech sector (-1.55%). On the other hand, the industrial sector strengthened by +0.71% followed by non-cyclical (+0.65%). JCI was flat due to profit taking on the weekend followed by the upcoming Independence Day. Meanwhile, the Rupiah exchange rate was weakening at IDR14,388. We estimate the JCI will move in the range of 6,050-6,150 while waiting for the balance of trade data release. Today's recommendation: AALI, BBRI, PGAS, MAIN.
Corporate Action
Cum Dividend Date: GEMS (IDR146.29/share), KKGI (IDR5.5/share), SRSN (IDR1/share).
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