MNCS Morning Navigator

06 Januari 2022

MNCS Morning Navigator January 06, 2022

Global Market Highlights

DJIA weakened (-1.07%) on Wednesday (05/01) followed by S&P 500 (-1.94%) and Nasdaq (-3.34%). The US employment data (ADP Employment Change) for Dec-21 was released to be 807,000, higher than the market consensus of 400,000. This is indicated as a negative catalyst considering that when they are combined with the US inflation rate data for Nov-21 (6.8% yoy), these tend to be a concern for investors, because it will tend to make the Fed more hawkish and accelerate monetary tightening. Today, the market will be looking toward several data releases such as: 1) US ISM Non-Manufacturing PMI; 2) Germany Inflation Rate YoY Prel; 3) Canada Balance of Trade (Nov).

Domestic Update
• Foreign investors booked a total net sell of IDR85 trillion throughout 2021 in the government securities market, making foreign ownership in tradable government securities dropped from 25.23% to 19.05%. MNCS Comment: Outflows from government securities started in Sep-21 and continue through Dec-21. We think that rising global inflation, quicker tapering process as well as the likelihood to raise interest rates aggressively in 2022 have triggered outflows from Indonesia's government securities. Despite the massive outflows, government bond yield change was relatively limited and still offer attractive valuation compared to peers.
• Furthermore, the second dose of vaccination rate nationally has reached 55.1% or equivalent to 114.69 million people.

Company News
1. SAMF IJ targets sales increase by +30% YoY or IDR2.4 Trillion in FY22E. This optimism is driven by the company's plan to increase production capacity in its subsidiary, PT Dupan Anugerah Lestari, which will start operating at the end of 2Q22 (Kontan). MNCS Comment: We consider this action to be supported by the increase in demand for fertilizers in line with the increase in demand for CPO commodities. Until now, the company has 5 factories with a production capacity of 600 thousand tons per year. SAMF is trading at the level of 46.81x/7.76x PER/PBV.
2. EXCL IJ managed to record a +38% YoY increase in data traffic during the year-end. The highest increase occurred on Christmas by 7% and New Year by 15% compared to normal days, which was dominated by increased traffic for streaming services (IQPlus). MNCS Comment: We see this increase in traffic has the potential to improve the company's top line performance in FY21. On the one hand, the company is also continuously improving the stability, network capacity and quality of data services. EXCL is trading at the level of 24.45x/1.67x PER/PBV.
3. UNIC IJ will distribute interim dividends for the 2021 financial year of IDR172.49 billion or IDR450 per share. Cum dividend on January 10, 2022 (Bisnis Indonesia). MNCS Comment: Dividend payout ratio UNIC is around 27.75% of 9M21 net profit and offers a dividend yield of 3.21%. UNIC is trading at the level of 6.47x/1.64x PER/PBV.

IHSG Updates
JCI weakened -0.49% to 6,662.30 on Wednesday (05/01) followed by net foreign buy which reached IDR802.04 billion. The majority of sectors experienced weakness, led by the technology sector (-1.91%) followed by the property sector (-1.77%). Meanwhile, the only sector that experienced strengthening was the financial sector (+0.19%). The relatively significant index rally in the previous 2 trades made investors tend to take profit as US technology stocks weakened due to the increase in the US 10 years treasury yields to reach 1.65% on (04/01). This was also the factor in the weakening of several Regional indices including JCI such as SSE (-1.02%), Kospi (-1.18%) and Hang Seng (-1.64%). In addition, the potential for US monetary tightening had also become a negative sentiment in the last trading day. On the other hand, Rupiah closed lower at IDR14,358/USD level. We estimate that the JCI will move in the range of 6,575-6,750. Today's recommendations: BBNI, MAPI, INTP, PTBA.

Corporate Action
Cum Dividend date: GEMS (IDR265.9/share), TMAS (IDR21,85/share)

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