Global Market Highlight
DJIA slipped by -0.19% on Thursday (19/08) while the S&P 500 strengthened by +0.13%, followed by Nasdaq (+0.11%). Wall Street closing was mixed as the data showed that the index of Leading Economic Indicators (LEI) rose by 0.9% last month to 116, where consensus expects an increase of 0.8%. The US economy continued to expand from the recession caused by Covid-19 pandemic even in the face of a resurgence in cases fueled by the Delta variant. Today the market will looking forward to several data releases such as: 1) US The Fed Kaplan Speech; 2) UK Retail Sales YoY; 3) Japan Inflation Rate YoY.
Domestic Update
• Indonesia's loans grew 0.5% YoY in July-21 according to Bank Indonesia (BI). This was a positive growth of two consecutive months after an 8-months streak of contraction. MNCS Comment: A positive loan growth was attributable to rising loan disbursement to consumer and mortgage segment which grew 6.79% YoY. MSME loan also booked a positive growth of 1.93% YoY last month. However credit growth remained limited amid ample liquidity in the banking system.
• Furthermore, there was an addition of 731 new Covid-19 cases in Jakarta yesterday.
Company News
1. UNTR IJ revised up Komatsu's sales target this year, from 2,500-2,600 units to around 3,000 units. This optimism was driven by the increased in sales of UNTR heavy equipment in 1H21 to 1,361 units rose by +167.91% YoY (vs 508 units in 1H20) (Kontan). MNCS Comment: We see that UNTR is quite optimistic to increase their heavy equipment sales in the 2H21E as the 1H21 sales already reach beyond 50% of their previous target. Currently UNTR is trading at 7.97x/1.11x PE/PBV levels.
2. PZZA IJ posted IDR1.69 trillion revenue in 1H21 weakened by -7.14% YoY (vs IDR1.82 trillion in 1H20). COGS decreased from IDR634.66 billion in 1H20 to IDR566.97 billion in 1H21. PZZA recorded IDR31.52 billion net profit in 1H21 or a significant increased by +200.76% YoY (vs IDR10.48 billion in 1H20) (Bisnis Indonesia). MNCS Comment: Despite the sales contraction, thanks to the efficiency on COGS and administrative expenses was able to increase the 1H21 net profit. We estimate that sales will still be depressed in 3Q21 in line with the implementation of the emergency PPKM. Currently PZZA is trading at 32.83x/1.84x PE/PBV levels.
3. HRUM IJ will offer the treasury shares previously collected by the buyback of 133.38 million shares. Until 6M21, the number of treasury shares owned by the company was 177.35 million shares or 6.56% of the total ownership. HRUM plans to release a maximum of 136.98 million treasury shares or will obtain funds of around IDR705.45 billion with an execution time of Sep-21 to Aug-22. (CNBC Indonesia). MNCS Comment: We see that HRUM's current treasury stock value was at IDR1,664.93/share. Assuming that HRUM sold 136.98 million stocks at the last closing price of IDR4,860/share then HRUM potentially took a profit by IDR437.70 billion. Currently HRUM is trading at 43.77x/2.43x PE/PBV levels.
IHSG Updates
JCI fell by -2.06% to 5,992.32 on Thursday (19/08) while net foreign buy reached IDR312.14 billion. JCI closed lower along with all sectors, led by the finance sector (-2.45%) followed by energy (-2.42%). Most of Asia indices closed at the red zone followed by JCI as the negative sentiment of the Fed indicated the possibility that the Fed would reduce US Treasury purchases by USD10 billion. Currently the value of Quantitative Easing is USD120 billion per month, USD80 billion for Treasury purchases and USD40 billion for mortgage asset-backed securities. On the other hand, Bank Indonesia maintains the BI 7 Day Reverse Repo rate at 3.5%. Lending Facility at 4.25% and Deposit Facility at 3.75%. Those numbers are in line with our estimation and market conventions. Meanwhile, the Rupiah exchange rate was weakening at IDR14,403. We estimate the JCI will move in the range of 5,947-6,040 while waiting for the inflation rate MoM. Today's recommendation: BTPS, IMAS, BSDE, CPIN.
Corporate Action
Public Expose: PRAS
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