MNCS Morning Navigator

02 Desember 2021

MNCS Morning Navigator December 02, 2021

Global Market Highlights

DJIA fell by -1.34% on Wednesday (01/12) followed by S&P 500 (-1.18%) and Nasdaq (-1.83%). Wall Street ended lower after the US Centers for Disease Control said the country had detected its first case of the Omicron variant. Meanwhile, the US Markit Manufacturing PMI slightly fell to 58.3 in November-21 as labor and supply bottlenecks continued to hit production. In addition, Germany Retail Sales decreased by -2.9% YoY on October-21 from previous at -0.9% YoY amid surging price pressures and supply bottlenecks. Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless ClaimsI; 2) Eurozone Unemployment RateY; 3) Japan Consumer Confidence.

Domestic Update
• Indonesia's hotel room occupancy rate was reported at 45.62% in Oct-21, hitting the highest figure in 2021. MNCS Comment: The uptrend in domestic hotel room occupancy rate has started since Aug-21 along with rising public mobility in recreation areas as the government gradually eases PPKM. However, the occupancy rate remained below pre-pandemic level and is expected to last throughout this year.
• Furthermore, the second dose of vaccination rate nationally has reached 45.8% or equivalent to 95.48 million people.

Company News
1. ADRO IJ recorded USD2.57 billion net sales in 9M21 increased by +31.44% YoY (vs USD1.95 billion in 9M20). COGS increased from USD1.49 billion in 9M20 to USD1.60 billion in 9M21. ADRO recorded USD420.90 million net profit in 9M21 or rose by +284.81% YoY (vs net profit of USD109.38 million in 9M20) (Bisnis Indonesia). MNCS Comment: ADRO’s top-line growth was driven by the increase of coal export sales which recorded USD1.96 billion in 9M21 or up by +40.57% YoY (vs USD1.40 billion in 9M20). The performance was in line with the rising coal price and demand amidst the energy crisis in 3Q21. Meanwhile, the significant increase in the bottom line was supported by COGS efficiency. ADRO is trading at the level of 6.99x/0.97x PER/PBV.
2. LSIP IJ recorded IDR3.34 trillion net sales in 9M21 increased by +46.61% YoY (vs IDR2.28 trillion in 9M20). COGS increased from IDR1.79 trillion in 9M20 to IDR2.18 trillion in 9M21. LSIP recorded IDR752.30 billion net profit in 9M21 or rose by +171.53% YoY (vs net profit of IDR277.06 billion in 9M20) (IQPlus). MNCS Comment: The increased top line and bottom line performance of LSIP was largely contributed from the sales of CPO, which rose by +46.30% YoY or worth USD2.64 trillion and contributed 79.04% of total revenue. The pent-up in 9M21 sales was in line with the increase in ASP CPO and sales volume which increased by +30% YoY and +57% YoY, respectively. Currently, LSIP is trading at level 7.99x/0.81x PER/PBV.
3. TKIM IJ recorded USD744.44 million net sales in 9M21 increased by +14.49% YoY (vs USD650.21 million in 9M20). COGS increased from USD565.49 million in 9M20 to USD640.77 million in 9M21. TKIM recorded USD175.65 million net profit in 9M21 or rose by +4.39% YoY (vs net profit of USD168.26 million in 9M20) (Emitennews). MNCS Comment: The main contributor of TKIM’s revenue and net sales was obtained by cultural paper sales recorded at USD517.88 million in 9M21 or grew by +5.12% YoY (vs USD492.63 million in 9M20). TKIM is optimistic that future performance will be even better driven by increasing demand for pulp and paper products. TKIM trading at the level of 7.13x/0.99x PER/PBV.

IHSG Updates
JCI weakened by -0.40% to 6,507.68 on Wednesday (01/12) followed by net foreign sell reaching IDR621.65 billion. JCI closed lower, with the decline led by the technology sector (-1.80%), followed by the property sector (-1.57%). On the other hand, the industrial sector strengthened by +0.57%, followed by the energy sector (+0.13%). The weakening of the JCI was driven by market trends that were still observing the development of the Omicron Covid-19 variant. Meanwhile, other sentiments came from the release of Indonesia's manufacturing PMI data which recorded a decline to 53.9 in November-21 (vs 57.2 in October-21) and the highest recorded inflation this year at 1.75% YoY in November-21. On the other hand, the Rupiah weakened at IDR14,343 level in the spot market. We estimate the JCI will move in the range of 6,500-6,570 while waiting for the released data of motorbike sales YoY. Today's recommendations: MLPL, JSMR, BBTN, AKRA.

Corporate Action
Cum dividend date: IPCM (IDR3.44/share), CLEO (IDR2.5/share)

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