MNCS Morning Navigator

01 Desember 2021

MNCS Morning Navigator December 01, 2021

Global Market Highlights

DJIA fell by -1.86% on Tuesday (30/11) followed by S&P 500 (-1.90%) and Nasdaq (-1.55%). Wall Street ended lower after The Fed stated that they would consider speeding up its withdrawal of bond purchases as inflation risks increase. Meanwhile, Germany’s Unemployment Rate declined to 5.3% in November-21 as businesses added staff to work off a backlog in orders. In addition, Europe’s Inflation Rate reached its highest rate at 4.9% in November-21 as a result of the economic recovery from the coronavirus pandemic and blockages in supply chains. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI; 2) Germany Retail Sales YoY; 3) UK Nationwide Housing Prices YoY.

Domestic Update
• Indonesia manufacturing PMI decreased to 53.9 points in Nov-21 from 57.2 in Oct-21 according to IHS Markit. MNCS Comment: Despite the decline, manufacturing activities in Indonesia remained in expansionary mode and reported to reach above 50 points for 3 consecutive months since Sep-21. The drop in Covid-19 daily cases was the key driver behind improving manufacturing activities.
• Furthermore, the second dose of vaccination rate nationally has reached 45.6% or equivalent to 95.07 million people.

Company News
1. INDF IJ recorded IDR72.81 trillion net sales in 9M21 increased by +23.87% YoY (vs IDR58.78 trillion in 9M20). COGS increased from IDR39.95 trillion in 9M20 to IDR48.75 trillion in 9M21. INDF recorded IDR5.41 trillion net profit in 9M21 or rose by +44.16% YoY (vs net profit of IDR3.75 trillion in 9M20) (IQPlus). MNCS Comment: INDF’s top-line and bottom-line growth were boosted by the pent-up sales of consumer-branded products segment to external customers recorded IDR42.06 trillion in 9M21 or up by +25.57% YoY (vs IDR33.49 trillion in 9M20). In the midst of economic recovery and rising commodity prices, INDF managed to create a strong performance with a robust business model as a total food solutions company and strengthen partnerships with SMEs. INDF is trading at the level of 8.06x/1.21x PER/PBV.
2. ICBP IJ recorded IDR42.62 trillion net sales in 9M21 increased by +25.74% YoY (vs IDR33.90 trillion in 9M20). COGS increased from IDR21.57 trillion in 9M20 to IDR27.09 trillion in 9M21. ICBP recorded IDR4.97 trillion net profit in 9M21 or rose by +25.41% YoY (vs net profit of IDR3.96 trillion in 9M20) (IQPlus). MNCS Comment: The increased performance of ICBP was largely contributed from the sales of the instant noodle segment, which rose by +34.30% YoY or worth IDR30.75 trillion and contributed 72.15% of total revenue. ICBP is optimistic that future performance will be even better driven by an integrated business model. Currently, ICBP is trading at level 15.30x/3.00x PER/PBV.
3. HMSP IJ announced the realization of an investment with a total value of approximately USD166.1 million for the construction of a smokeless tobacco production facility in Karawang, West Java. The production facility is scheduled to be operating in 4Q22E to fulfill domestic market demand and focus on export markets in the Asia Pacific (Emitennews). MNCS Comment: We see the realization of investment in the construction of new production facilities is expected to increase the multiplier effect through the creation of added value, absorption of tobacco leaves from local farmers, expanding employment, and increasing investor confidence in the investment climate in Indonesia. HMSP trading at the level of 15.63x/4.22x PER/PBV.

IHSG Updates
JCI weakened by -1.13% to 6,533.93 on Tuesday (30/11) followed by net foreign sell reaching IDR973.79 billion. JCI closed lower, with the decline led by the industrial sector (-2.22%), followed by the technology sector (-1.91%). On the other hand, the transportation sector strengthened by +3.31%, followed by the energy sector (+1.08%). The weakening of the JCI is still driven by market concerns about the Omicron Covid-19 variant which is increasingly spreading and the latest developments from Moderna's CEO who doubts the effectiveness of the existing vaccine against the new variant. In addition, negative sentiment also came from the increase in the PPKM level in Jakarta to level 2. On the other hand, the Rupiah was flat at IDR14,323 level in the spot market. We estimate the JCI will move in the range of 6,530-6,650 while waiting for the released data of PMI and inflation rate YoY. Today's recommendations: LPKR, BWPT,MPPA, EXCL.

Corporate Action
Cum dividend date: TOTO (IDR5/share), TURI (IDR29/share)
Cum right issue date: NOBU (IDR1,205/share)

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