Global Market Highlights
DJIA rose by +0.98% on Monday (27/12) followed by S&P 500 (+1.38%) and Nasdaq (+1.39%). The santa claus rally became the driving force for the US indices in the days leading up to the end of the year, it also made the S&P 500 hit an all-time high yesterday. Investors also tend to ignore the surge in Covid-19 cases that occurred in Europe due to the massive transmission of the Omicron variant, this is due to research studies conducted in South Africa, England and Scotland which say that the Omicron variant is no more dangerous than the Delta. Today, the market will be looking toward several data releases such as: 1) US House Price Index MoM; 2) Japan Unemployment Rate; 3) Japan Industrial Production YoY Prel.
Domestic Update
• Indonesia’s Tax Directorate General reported a net tax revenue of IDR1,231.87 trillion as of December 26th, exceeding the annual target of IDR1,229.6 trillion or achieving 100.2% of the APBN 2021. MNCS Comment: We believe with the recent development of government revenue and spending, the budget deficit could be brought down to -5.17% GDP, lower than the target of -5.70% GDP.
• Furthermore, the second dose of vaccination rate nationally has reached 53.1% or equivalent to 110.66 million people.
Company News
1. ANTM IJ through its subsidiary, PT Emas Antam Indonesia (EAI) signed a Production and Sales Cooperation Agreement for Gold Products with PT Hartadinata Abadi Tbk (HRTA). Through this collaboration, EAI and Hartadinata will further develop EmasKITA pure gold bullion (Emas Kecil Investasi Terpercaya dan Aman) and Kencana pure gold jewelry (Keindahan Terpercaya dan Bermakna) in Indonesia domestic market (Kontan). MNCS Comment: We see that this cooperation agreement will maintain ANTM’s strong sales going forward, amidst the relatively stable gold price due to the economic recovery. ANTM is trading at the level of 24.24x/2.72x PER/PBV.
2. TINS IJ is currently focusing on developing the strategic Ausmelt Furnace smelter project which is estimated to be operational in 2Q22F. This project has a budgeted capex of IDR1.2 trillion or 63.16% of the 2021 capex budget of IDR1.9 trillion (Emitennews). MNCS Comment: The smelter targeted to operate by the end of this year, has been delayed due to the PPKM policy in 7M21. Nevertheless, TINS is optimistic that in the future, by increasing the capacity from 30,000-35,000 to 40,000, it can improve the quality of higher grades. Currently, TINS is trading at level 13.51x/1.97x PER/PBV.
3. ASSA IJ targets revenue growth of up to +30% YoY or IDR5.12 trillion in FY22E (vs target of IDR3.94 trillion in FY21E). As of 9M21, ASSA recorded IDR3.48 trillion of revenue or up +61.65% YoY (vs IDR 2.15 trillion in 9M20) (Bisnis Indonesia). MNCS Comment: We assess that to achieve future performance targets, the company is consistent on improving business transformations based on digital technology and utilizing the use of social media. ASSA is optimistic that the prospect of revenue from Anteraja will remain high and become the largest contributor where they have experienced an increase in volume of up to 3 times compared to the volume of shipments in FY20. ASSA trading at the level of 106.41x/5.46x PER/PBV.
IHSG Updates
JCI strengthened +0.19% to 6,575.44 on Monday (27/12) followed by net foreign buy reaching IDR364.87 billion. A number of sectors supported the basic-industry (+1.37%) followed by the infrastructure sector (+0.87%). On the other hand, the tech sector weakened by -0.71% followed by the cyclical sector (-0.63%). JCI ended on the green zone during the closing, even though it briefly touched the negative territory at the level of 6,562.55. The value of trade transactions was relatively low at IDR9.78 trillion, still below the December average per (24/12) which was IDR13.24 trillion, and was indicated by investors who made cash outs ahead of the Christmas and Year End Holidays. On the other hand, Rupiah closed slightly lower at IDR14,227/USD level. We estimate that the JCI will move in the range of 6,529-6,600. Today's recommendations: JPFA, JSMR, KLBF, ARTO.
Corporate Action
Public Expose: FREN, KEEN, LMAS
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