Global Market Highlights
DJIA rose by +0.25% on Wednesday (29/12) followed by S&P 500 (+0.14%) while the Nasdaq slipped by -10%. The positive catalyst comes from the Omicron variant which triggers antibodies to be stronger against the Delta variant. In addition, the CDC disease control and prevention center has revised the isolation policy for Covid-19 patients, which originally had to be isolated for 10 days, currently trimmed to 5 days only. As long as this new variant does not require medical treatment in hospital, investors will still respond positively, though the airline industry is again affected by it. Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless Claims; 2) US Initial Jobless Claims; 3) UK Nationwide Housing Prices YoY.
Domestic Update
• The Indonesian Ministry of Health yesterday announced an additional of 21 cases resulting in total of 68, with the majority coming from Middle Eastern countries. MNCS Comment: Recent research and publications have shown that the Omicron variant has lower risk of hospitalization compared to Delta. However with the fast spreading of the virus variant and now found in more than 100 countries only in a month, it remains the downside risk to the economic recovery.
• Furthermore, the second dose of vaccination rate nationally has reached 53.7% or equivalent to 111.91 million people.
Company News
1. KAEF IJ targets the performance growth of top line and bottom line in FY22E by +20% YoY. Meanwhile, capex is around IDR1 trillion which will be used for business and product development in compliance with regulations for the pharmaceutical and health industry (Bisnis Indonesia). MNCS Comment: We see that the company’s performance in the future will be projected to grow along with the new variant of the Covid-19 Omicron and public awareness of health. In addition, the company is optimistic that it may achieve its target in the next year given the economic recovery. KAEF is trading at the level of 33.66x/1.90x PER/PBV.
2. SIDO IJ cooperates with Watson Indonesia outlet managed by PT Duta Intidaya Tbk (DAYA) to expand their market share. Later, SIDO products will be available at all Watson global outlets (Emitennews). MNCS Comment: We assess this collaboration as a positive catalyst that will drive SIDO’s sales performance in the future and also support Indonesia products to expand globally. At the moment, Watson has 15,000 outlets around the world. Currently, SIDO is trading at level 22.75x/8.57x PER/PBV.
3. FREN IJ budgeted capex of around USD200 million in FY22E which will be allocated for network development. In line with the company’s target to obtain double-digit revenue growth above +10% YoY in next year (Kontan). MNCS Comment: As of 9M21, the number of FREN customers increased by +18% YoY from 27.5 million to 32.5 million spread across 200 cities. We see that the company is optimistic that it will potentially continue to grow and reach a wider number of customers by expanding its network to another eastern Indonesia area. FREN is trading at the level of 2.12x PBV.
IHSG Updates
JCI rose +0.03% to 6,600.67 on Wednesday (29/12) followed by net foreign sell reaching IDR98.76 billion. The sector that led the JCI strengthening was the cyclical consumer sector (+1.56%) followed by the tech sector (+1.21%). On the other hand, the energy sector, which supported the index in the previous trade, weakened by -0.32% followed by the property sector (-0.23%). Investors responded to the good news, namely regarding a research study which stated that the Omicron variant can build immunity by 4.4 times within 14 days after being infected with the Omicron variant for people who have been vaccinated. On the other hand, Rupiah closed slightly lower at IDR14,253/USD level. We estimate that the JCI will move in the range of 6,555-6,620. Today's recommendations: BRPT, MYOR, PGAS, ADRO.
Corporate Action
Stock Split: MTDL (1:5)
RUPS: GPSO, AKSI
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