Global Market Highlights
DJIA stagnated +0.00% on Monday (07/02), While the S&P 500 weakened -0.37% followed by the Nasdaq (-0.58%). Wall Street was pressured by a slump in technology stocks that weighed on the entire market. The release of economic data, namely credit consumption Dec-21 grew below expectations with USD18.89 billion (vs USD21.90 billion). The good news came from the weekly average of additional Covid-19 cases which fell to its lowest level for almost 2 months on Sunday at 291,998 (vs 802,223 in mid-Jan-22) indicating the Covid-19 development situation had been managed well and successfully pushed up shipping issuer stock prices. Meanwhile, the yield on the US T-note 10y rose +0.7 bp to 1.92%. Today, the market will be looking toward several data releases such as: 1) US Balance of Trade; 2) Canada Balance of Trade; 3) Japan Eco Watchers Survey Current.
Domestic Update
• Government is scheduled to conduct a sharia securities auction on Tuesday (08/02) with the indicative target set at IDR11 trillion. MNCS Comment: We see demand for fixed income instruments to remain high thus we believe the target is achievable. However due to recent rise in yield, demand for shorter maturity assets to increase.
• Furthermore, the second dose of vaccination rate nationally has reached 62.9% or equivalent to 131.09 million people.
Company News
1. SIDO IJ recorded IDR4.02 trillion of sales, up +20.55% YoY in FY21 (vs IDR3.33 trillion in FY20). The pharmaceutical sales segment grew by +26.48% YoY, while sales of herbal medicine as the main contributor rose by +21.27% YoY to Rp2.69 trillion in FY21 (Kontan). MNCS Comment: We see that the company's positive performance is supported by the increasing demand for herbal supplements amid the Covid-19 pandemic. The company's net profit also rose by +35% to IDR1.26 trillion which was in line with the increase in sales in FY21. SIDO is trading at the level of 22.01x/7.99x PER/PBV.
2. LPPF IJ plans to buy back shares of IDR500 billion or equal to 10% of the maximum paid-up capital of 262.61 million shares. The maximum purchase price is set at IDR4,700 per share and will be carried out until 3 May-22 (Bisnis Indonesia). MNCS Comment: The Company estimates that there will be no significant impact on its business activities considering that the company has sufficient working capital. This buyback is expected to maintain the stability of the company's share price in the market. LPPF is trading at the level of 18.32x/10.12x PER/PBV.
3. KINO IJ has received IDR50 billion loan from PT Dutalestari Sentratama (DLS) on 3 Feb-22. This loan in the form of affiliated transactions will be used to maximize the company's operational activities (IQ Plus). MNCS Comment: Through this loan, the company's performance is expected to improve in the future. In 3Q21, the company experienced a decrease in net profit by -56.34% YoY to IDR78.63 billion. KINO is trading at the level of 42.96x/1.85x PER/PBV.
IHSG Updates
JCI rose +1.09% to 6,804.94 on Monday (07/02), followed by net foreign buys which reached Rp1.96 trillion. Majority of sectors experienced strengthening, led by the cyclical sector (+2.83%) followed by the raw materials sector (+1.57%). On the other hand, the health sector weakened -0.16% followed by the technology sector (-0.02%). Investors positively welcomed Indonesia's economic growth in 4Q21 by +1.06% QoQ/+5.02% YoY. Hence, cumulatively in FY21, the Indonesian economy grew +3.69% YoY, indicating the success of the economic process in FY21 after a strong contraction in FY20 by -2.07% YoY due to the outbreak of the Covid-19 pandemic. Meanwhile, the government has again imposed PPKM level 3 including the Jabodetabek area to reduce the spread of the virus. It was recorded that up to (07/02) there were 26,121 additional positive cases. Investor concerns began to subside after the health minister said that the development of the pandemic was relatively under control with a total of 18,966 people being treated, while the total hospital bed capacity nationally was 400,000 of which 120,000 were devoted to Covid-19 cases. On the other hand, the Rupiah weakened at IDR14,397/USD level. We estimate that the JCI will move in the range of 6,750-6,850 while waiting for the national foreign exchange reserve data to be released. Today’s recommendation: BGTG, TINS, ADHI, MEDC.
Corporate Action
IPO: ENAK (IDR850/share)
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