Global Market Highlights
DJIA grew by +0.60% on Friday (10/12) followed by S&P 500 (+0.95%) and Nasdaq (+0.73%). Wall Street ended higher due to easing concerns regarding the Omicron variant despite of high inflation rate. The US inflation rate grew by +6.8% YoY in Nov-21 from previous at +4.6% YoY due to strong consumer demand for goods and supply chain bottlenecks. In addition, US Michigan Consumer Sentiment Prel recovered from a 10-year decline to 70.4 in Dec-21 driven by expectations of improving incomes in the year ahead. Today, the market will be looking toward several data releases such as: 1) Japan Machinery Orders YoY; 2) Japan Tankan Large Manufacturing Outlook; 3) Germany Wholesale Prices MoM.
Domestic Update
• Bank Indonesia (BI) expects retail sales to increase by +10.1% YoY in Nov-21 after recording a growth of 6.5% YoY in Oct-21. MNCS Comment: Retail sales started to flip out to positive territory since Oct-21 and expected to continue the trend until the end of 2021. This is a positive sign that we expect to boost economic growth in 4Q21 as domestic consumption is recovering.
• Furthermore, the second dose of vaccination rate nationally has reached 49.3% or equivalent to 102.76 million people.
Company News
1. HEAL IJ targets 3 units of hospital expansion until FY22E. The company targets capital expenditure to reach IDR1 trillion for FY22E. Furthermore, in 2022, the Hermina Hospital group will add 3 new hospitals namely Soreang, Tasikmalaya, and Banda Aceh (Bisnis Indonesia). MNCS Comment: We see that the company is quite optimistic with the expansion carried out to add additional hospitals, HEAL is targeting a fairly high capex compared to the average capex for the last 3 years which amounted to IDR750 billion. HEAL is trading at the level of 14.37x/4.74x PER/PBV.
2. MIKA IJ targets the addition of two new hospitals and plans to acquire one new hospital in FY22E. Two new hospitals are currently undergoing construction and are planned to be operational in FY22E located in Deltamas, West Java and Pamulang, South Tangerang (Bisnis Indonesia). MNCS Comment: We see from the construction of hospitals and the acquisition plan carried out by MIKA, it is projected to increase the company’s revenue and net profit in the future. Currently, MIKA is trading at level 29.29x/6.69 PER/PBV.
3. BUMI IJ targets coal production in FY22E to reach 85-90 million tons, higher than the FY21E production target of 82 million tons (CNBC Indonesia). MNCS Comment: We see that the company’s optimism can be realized by being followed by global economic growth after the pandemic, in addition to the policies of some largest coal importing countries such as China and India will have an effect on demand in FY22E. BUMI trading at the level of 4.23x PER.
IHSG Updates
JCI strengthened by +0.14% to 6,652.92 on Friday (10/12) followed by net foreign buy reaching IDR721.50 billion. JCI closed higher, led by the cyclical consumer sector (+2.17%), followed by the transportation sector (+1.59%). On the other hand, the property sector weakened by -0.33%, followed by the financial sector (-0.24%). The slight strengthening of the JCI was driven by a wait and see by the investors regarding the released data of the US inflation, where the upward trend in the US inflation potentially makes the Fed to accelerate the tapering process and to increase the benchmark interest rate. On the other hand, the Rupiah weakened to IDR14,373 level in the spot market. We estimate the JCI will move in the range of 6,580-6,700. Today's recommendations: PNBS, BRMS, BIRD, LPKR.
Corporate Action
IPO: NASI (IDR155/share)
Public expose: TMAS
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