Global Market Highlights
DJIA fell -1.23% on Monday (17/12) followed by S&P 500 (-1.14%) and Nasdaq (-1.24%). Wall Street closing was lower as investors were worried about the Omicron Covid-19 variant potentially undercutting the economic rebound. Currently, the new variant has been identified in 43 out of 50 US states. Subsequently, the US senator Joe Manchin said on Sunday he would not support Biden's USD1.75 trillion infrastructure bill that had an unfavorable impact on the market's response to stock trading Monday. Today, the market will be looking toward several data releases such as: 1) US Current Account (Q3); 2) Germany GfK Consumer Confidence; 3) Consumer Confidence Flash.
Domestic Update
• Government will issue a bond with the value of IDR157 trillion at the end of 2021 that will be bought by Bank Indonesia (BI) under SKB III. In 2022, BI will still buy a government bond worth IDR224 trillion under SKB III. MNCS Comment: We believe the implementation of SKB III will help the government to reduce the value of domestic securities issuance, therefore also reducing supply risk.
• Furthermore, the second dose of vaccination rate nationally has reached 51.4% or equivalent to 107.08 million people.
Company News
1. MEDC IJ recorded USD955.92 million net sales in 9M21 increased by +16.46% YoY (vs USD846.90 million in 9M20). COGS decreased from USD582.38 million in 9M20 to USD580.11 million in 9M21. MEDC recorded USD57.15 million net profit in 9M21 (vs net loss of USD180.82 million in 9M20) (Kontan). MNCS Comment: The company’s performance improvement was driven by revenue from contracts with customers reaching USD926.63 million in 9M21 or up +12.92% YoY (vs USD820.58 million in 9M20). On the other hand, the company managed to make exploration expenses and financial expenses efficient, which fell -65.62% YoY and -16.55% YoY, respectively. MEDC is trading at the level of 11.07x/0.77x PER/PBV.
2. MLPL IJ recorded IDR7.42 trillion net revenue in 9M21 or decreased by -2.07% YoY (vs IDR7.58 trillion in 9M20). COGS decreased from IDR6.09 trillion in 9M20 to IDR6.01 trillion in 9M21. MLPL recorded IDR156.09 billion net profit (vs net loss of IDR503.59 trillion in 9M20) (Bisnis Indonesia). MNCS Comment: We see the decline in top line was due to the decrease in retail and distribution sales as the largest contribution worth IDR5.16 trillion or down -2.56% YoY (vs IDR5.30 trillion in 9M20). On the other hand, the increase in profit was driven by the company's success in managing expenses such as operating expenses and other expenses efficiently, which fell -14.22% YoY and -49.04% YoY, respectively. Going forward, MLPL will transform its focus on corporate investment in the digital sector. Currently, MLPL is trading at level 26.73x/1.33x PER/PBV.
3. ACES IJ will add new outlets located at Living Plaza Medan, North Sumatra and Cirendeu Plaza, Tangerang on December 22, 2021. The outlets in Medan have an area of 1,900 square meters while in Tangerang with an area of 1,000 square meters. The opening of the new stores will be the eleventh and twelfth outlets for this year (Emitennews). MNCS Comment: We see the opening of these stores has exceeded the target set of 10 outlets in FY21E, and expected to improve the company’s performance in the future. Cumulatively, the total outlets owned by ACES have reached 217 outlets. ACES trading at the level of 51.39/4.44x PER/PBV.
IHSG Updates
JCI corrected by -0.83% to 6,547.11 on Monday (20/12) followed by net foreign buy reaching IDR543.77 billion. By sector, the industrial sector led the highest decline of -1.52% followed by the cyclical sector (-1.48%). On the other hand, the tech sector strengthened by +0.95%, followed by the healthcare sector (+0.13%). The weakening of the JCI was in line with the weakening of other Asian regional indices as the impact of transmission of the Omicron variant which was recorded more than 50% increased globally in the past 3 days. On the other hand, the Rupiah weakened at IDR14,378/USD in the spot market. We estimate the JCI will move in the range of 6,525-6,560. Today's recommendations: PMMP, MLPL, BBRI, BMHS.
Corporate Action
RUPS: MDRN, SMGR, CNKO
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