Global Market Highlights
Wall Street is closed to commemorate Washington's birthday (21/02). The Fed Governor, Michelle Bowman stated that the open option to raise interest rates in Mar-22 later by more than 25 bps given the already worrying inflation rate (7.5% YoY in Jan-22), but some other elite officials said that a 25 bps rate hike was deemed sufficient and the increase in the following months would depend on the economic situation. This makes market confidence to be more inclined to a 25 bps rate hike compared to 50 bps with a probability of reaching 83.3%. Meanwhile, European markets which opened higher in early trading had to close into the red zone due to Putin's statement signing a decree containing the recognition of two pro-Russian regions in Ukraine (Donetsk and Luhansk) and the mobilization of troops to other Ukrainian regions. This is directly signaling the start of the invasion. Today, the market will be looking toward several data releases such as: 1) US Markit Manufacturing PMI Flash; 2) US CB Consumer Confidence; 3) Germany Ifo Business Climate.
Domestic Update
• Government successfully issued ORI021 with the record of the lowest coupon and the highest retail investor participation. MNCS Comment: We believe this is good news that the strengthening of the domestic investor base could help the government finance its budget while at the same time could support the domestic market to become more stable.
• Furthermore, the second dose of vaccination rate nationally has reached 67.4% or equivalent to 140.31 million people.
Company News
1. EXCL IJ recorded a +3% YoY increase in revenue to IDR26.8 trillion in FY21. Meanwhile, net profit skyrocketed by +246% YoY to IDR1.3 trillion supported by a significant reduction in depreciation expense (Kontan). MNCS Comment: We see that this growth is also supported by the company's revenue from the data segment as the largest contributor which rose +6.11% YoY to IDR22.69 trillion in FY21. This was in line with the increasing demand for data along with the digitalization acceleration. EXCL is trading at the level of 23.98x/1.54x PER/PBV.
2. BNGA IJ recorded a consolidated net profit of IDR4.1 trillion, up +103.8% in FY21. This performance growth was driven by credit growth and operating income, also discipline in cost management. The company disbursed loans was IDR181.6 trillion in FY21, the main contributor came from the consumer banking business which grew 9.2% YoY (Bisnis Indonesia). MNCS Comment: We see that the company managed to record positive achievements in FY21, especially from credit growth. This encourages the company's optimism to achieve a greater performance in FY22E along with the economic recovery and business activities in various sectors. BNGA is trading at the level of 6.25x/5.29x PER/PBV.
3. HOKI IJ prepares IDR10 billion - IDR15 billion of capex in FY22E. The budget will be allocated to add dryer machines and husker machines at the Subang factory, West Java, and investment in new product diversification. The Company in 1H22 also seeks to expand the sales area in Samarinda, Balikpapan, Medan, and Banjarmasin (Emiten News). MNCS Comment: We see that the company has the potential to improve its performance this year, supported by its expansion strategy and economic recovery that might increase people’s consumption rate. The company also expects to achieve 10% - 15% revenue growth in FY22E. HOKI is trading at the level of 2.30xPBV.
IHSG Updates
JCI rose +0.15% to 6,902.96 on Monday (21/02), followed by net foreign buys which reached IDR609.34 billion. Although the majority of sectors moved into the red zone, several sectors were driving the index, led by the technology sector (+2.05%) and followed by the financial sector (+0.83%). On the other hand, the sectors that led the decline were the transportation sector (-1.05%) followed by the industrial sector (-0.84%). The movement of the index tends to be opposite to other Asian indices which have weakened. The catalyst that supports the movement of the index is the planned meeting of the US and Russian presidents regarding the Russia-Ukraine conflict which is expected to find an ideal solution to resolve the geopolitical crisis of the two countries. In addition, the strengthening of metal commodity prices such as Tin (+0.68%) and Nickel (+1.08%) allegedly pushed the stock exchange to an all time high level along with foreign inflows which were still consistently recorded. Positive news also came from the development of the Covid-19 situation where the addition of positive cases continued to decline, namely on (21/02) at 34,418 (vs 48,484 on 20/02). On the other hand, the Rupiah weakened at IDR14,328/USD level. We estimate that the JCI will move in the range of 6,820-6,930 while waiting for the loan growth data to be released. Today’s recommendation: PPRO, BBRI, INCO, UNTR.
Corporate Action
Cum Right Issue Date: BGTG (IDR200/share)
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