MNCS Morning Navigator

07 Januari 2022

MNCS Morning Navigator January 07, 2022

Global Market Highlights

DJIA weakened (-0.47%) on Thursday (06/01) followed by S&P 500 (-0.10%) and Nasdaq (-0.13%). Investors are still overshadowed by negative sentiment from the Fed which plans to accelerate monetary tightening. However, the weakening was relatively slow supported by the release of US labor market data where the weekly initial jobless claims (Initial Jobless Claims 01/01) reached 207,000 (vs 197,000 from consensus) and the continuous jobless claims (Continuing Jobless Claims 25/12) reached 1.75 million (vs 1.69 million by consensus). These two data from the labor market are considered to be a consideration for revisiting the plan to accelerate monetary tightening. Today, the market will be looking toward several data releases such as: 1) US Unemployment Rate; 2) US Non Farm Payrolls; 3) Eurozone Core Inflation Rate YoY Flash.

Domestic Update
• The IDR value has depreciated by 0.83% since the start of 2022. The IDR value closed at IDR14,396/USD (JISDOR) yesterday. MNCS Comment: We think that IDR depreciation against USD was due to Fed's hawkish stance to quicken tapering process, plan to reduce bond holdings in the balance sheet and earlier than expected rate hikes in 2022 to fight persistently high inflation.
• Furthermore, the second dose of vaccination rate nationally has reached 55.3% or equivalent to 115.08 million people.

Company News
1. ASSA IJ has budgeted IDR1.5 trillion capex in 2022 resourced by the company's internal cash. The majority of capex will be allocated to buy new cars for the company's rental business (Bisnis Indonesia). MNCS Comment: The company is optimistic that it might maintain its good performance by targeting a revenue growth of 30% for FY22E. On the one hand, we see the logistics sector potentially grow along with the increase of e-commerce transactions. ASSA is currently trading at the level of 115.06x/5.90x PER/PBV.
2. PTPP IJ budgeted a capex of IDR8.37 trillion in 2022 or an increase by +35% YoY (vs IDR6.2 trillion in 2021). This capex will be used for developing infrastructure investment projects, particularly toll roads and drinking water supply systems (Emiten News). MNCS Comment: The company's optimism has driven the company to target new contracts of IDR31 trillion in 2022 or an increase by +26% (vs IDR24.6 trillion in 2021). Moreover, PTPP targets projects from the Philippines and Timor Leste for infrastructure development such as railways and airports. Currently PTPP is trading at the level of 36.83x/0.59x PER/PBV.
3. WSKT IJ recorded a new contract value of IDR20.51 trillion at the end of December 2021 and has succeeded to reach 100% of the target which was IDR20 trillion. Several major projects obtained include Kayu Agung - Palembang - Betung toll road project phase 2 worth IDR5.01 trillion, Kamal - Teluk Naga - Rajeg toll road project phase 1 worth IDR1.05 trillion and Musi - Kramasan bridge worth IDR1 trillion. (Kontan). MNCS Comment: We see this achievement can improve the company's financial fundamentals and operational performance in the future. Currently WSKT is trading at the level of 25.16x/1.08x PER/PBV.

IHSG Updates
JCI weakened by -0.13% to 6,653.35 on Thursday (06/01) followed by net foreign buy reaching IDR645.18 billion. The cyclical sector was a laggard which dropped by -1.29%, followed by the tech sector (-1.08%). On the other hand, the health sector strengthened by +0.48%, followed by the transportation sector (+0.25%). The weakening that occurred on Wall Street (05/01) had its effect on the JCI, where the negative catalyst came from the Fed's plan to accelerate interest rate hikes triggered by high US inflation data (6.8% yoy Nov-21) followed by the release Dec-21 US employment data hits 807,000 (vs 400,000 by consensus). On the other hand, Rupiah closed lower at IDR14,393/USD level. We estimate that the JCI will move in the range of 6,575-6,700 while waiting for the released data foreign exchange reserve. Today's recommendations: AGII, PGAS, MPPA, BNBA.

Corporate Action
Cum Dividend Date: LTLS (IDR20/share)
Cum Right Issue Date: BBHI (IDR478/share)

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