Global Market Highlights
DJIA weakened -0.49% on Monday (14/02), followed by the S&P 500 (-0.38%) while the Nasdaq was flat (-0.00%). Wall Street is still contracting after the hawkish tone that the Fed said to be more aggressive regarding monetary tightening, pushed up the yield on the US T-note 10y. Sentiment in the form of Russian-Ukrainian geopolitical tensions seemed to subside after the Russian president gave a signal to continue diplomacy, especially towards western countries. Another sustaining catalyst came from the developments of the Covid-19 pandemic where the weekly average of new positive cases was 173,857, the lowest compared to mid-Jan-22 at 802,223. Today, the market will be looking toward several data releases such as: 1) Germany ZEW Economic Sentiment Index; 2) Eurozone GDP Growth Rate YoY; 3) UK Unemployment Rate.
Domestic Update
• Indonesia retail sales grew +7.8% MoM/+13.8% YoY in Dec-21 and is projected to grow +16.0% YoY in Jan-22 according to Bank Indonesia (BI). MNCS Comment: Retail sales expansion in Dec-21 was attributable to cyclical momentum of year end momentum of Christmas and New Year Holiday that boosted consumption.
• Furthermore, the second dose of vaccination rate nationally has reached 65.2% or equivalent to 135.78 million people.
Company News
1. BSDE IJ recorded IDR7.7 trillion of marketing sales in FY21, up +19% YoY (vs IDR6.5 trillion in FY20). This achievement is 10% higher than the initial target of IDR7 trillion. The residential segment as the largest contributor recorded a transaction value of up to IDR5.2 trillion, or equal to 68% of the total presales (Kontan). MNCS Comment: We see that the company might continue its positive performance this year, supported by the economic recovery, as well as the extension of the DTP VAT incentive. BSDE is trading at the level of 15.52x/0.62x PER/PBV.
2. IRRA IJ allocates around IDR30 billion to IDR50 billion of capex in FY22E resourced by the company’s internal cash and will be allocated for the distribution business development (Kontan). MNCS Comment: We see that the company has the potential to increase the number of its customers along with the addition of distribution network and infrastructure developments with the allocated capex. IRRA is trading at the level of 25.01x/5.57x PER/PBV.
3. ARNA IJ targets net sales to grow +8% YoY, average selling price +1.8% YoY, and sales volume +6.3% YoY in FY22E. Net profit is also projected to grow +30% YoY to IDR610 billion in FY22E (Bisnis Indonesia). MNCS Comment: We see that the company's optimism is supported by the achievement in FY21 where net profit grew +45.78% YoY. In addition, the company plans to be more expansive this year through its investment in the construction of Plant 5C for the production of glazed porcelain in Mojokerto and Palembang, which is expected to start production in 2023. ARNA is trading at the level of 13.39x/4.36x PER/PBV.
IHSG Updates
JCI weakened -1.19% to 6,734.49 on Monday (14/02), followed by net foreign buys which reached Rp402.95 billion. Almost all sectors experienced contraction, led by the transportation sector (-3.07%) followed by the technology sector (-2.59%) while the energy sector was the main barrier to the index's weakening rate with an increase of +1.48%. The JCI weakening was in line with other Asian markets where Nikkei -2.23%, SSE -0.98%, Hang Seng -1.41% and Kospi -1.57% were overshadowed by investor concerns about monetary tightening by the increasingly aggressive Fed in line with the rising US inflation rate of +7.5% YoY. Another negative sentiment also came from the geopolitical tensions between Russia-Ukraine. In addition, the government has extended PPKM level 3 for several regions with a number of adjustments aimed at maintaining economic recovery. On the other hand, the Rupiah slightly weakened at IDR14,353/USD level. We estimate that the JCI will move in the range of 6,700-6,770 while waiting for the balance of trade to be released. Today’s recommendation: MDKA, ARTO, TOBA, INCO.
Corporate Action
Public Expose: BCAP
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