MNCS Morning Navigator

10 Januari 2022

MNCS Morning Navigator January 10, 2022

Global Market Highlights

DJIA weakened (-0.01%) on Friday (07/01) followed by S&P 500 (-0.41%) and Nasdaq (-0.96%). The release of US jobs data (Non Farm Payrolls) for Dec-21 is 199,000 (vs 249,000 Nov-21) which is a negative sentiment because the figure is below the market consensus of 400,000. On the other hand, there is a positive catalyst from the unemployment rate which fell to 3.9% Dec-21 (vs 4.2% Nov-21). A number of positive data released at the beginning of the year has not been able to offset market anxiety about monetary tightening by the Fed which is accelerating beyond market expectations. Today, the market will be looking toward several data releases such as: 1) US Wholesale Inventories MoM; 2) US Consumer Inflation Expectations; 3) Eurozone Unemployment Rate.

Domestic Update
• KSEI reported there were 7.49mn domestic investors including mutual funds, C-Best and government securities as of Dec-21. The total domestic investors have increased 92.99% YoY. MNCS Comment: Increasing domestic investors is expected to help cushion the financial market during foreign outflows. We believe this milestone is likely to help maintain domestic financial market stability.
• Furthermore, the second dose of vaccination rate nationally has reached 56% or equivalent to 116.72 million people.

Company News
1. CSRA IJ has budgeted IDR175 billion-IDR200 billion for capex in 2022, resourced by the company’s internal fund and bank credit facilities. Majority of the capex will be allocated for the construction of the second Palm Oil Factory in South Tapanuli (Kontan). MNCS Comment: We see the company's optimism to expand its business might increase the production and sales growth of palm oil in 2022 along with the CPO price still highest. Currently, CSRA is trading at the level of 5.33x/1.69x PER/PBV.
2. KRAS IJ shipped 27,000 tons of Hot Rolled Coil (HRC) steel products to Pakistan in early January 2022, which is the new export destination country in 2022. The company targets sales in FY22E of IDR37.3 trillion or an increase of around +19.9% YoY (vs target of IDR31.1 trillion in FY21E) (Bisnis Indonesia). MNCS Comment: We see that this strategy will increase the company's total of sales in the future. This is supported by the opportunity to market steel products to countries whose production activities were disrupted due to the pandemic. KRAS is currently trading the level of 28.69x/1.45x PER/PBV.
3. JSMR IJ won the tender for the concession of 206.65 km Gedebage-Tasikmalaya-Cilacap toll roads with a total investment value of IDR56.2 trillion. After signing the Toll Road Concession Agreement, the company will have a total concession of 1,809 km (Bisnis Indonesia). MNCS Comment: We consider this concession is able to maintain the company's position as a market leader in the toll road industry and will strengthen the company's financial position going forward. JSMR is currently trading at 36.83x/0.59x PER/PBV.

IHSG Updates
JCI rose +0.72% to 6,701.32 on Friday (07/01) followed by net foreign buy which reached IDR944.72 billion. The sector leading the index strengthening was the energy sector (+2.01%) followed by the industrial sector (+1.22%). On the other hand, the cyclical sector weakened -0.95% followed by the technology sector (-0.44%). The release of data on foreign exchange reserves (cadev) for Dec-21 is USD144.9 billion (vs. USD145.9 billion Nov-21). Despite the decline, investors remain optimistic, since the decline is influenced by the need for payment of government external debt and the relatively strong nominal of the exchange reserves (equivalent to financing 8.0 months of imports or 7.8 months of imports). On the other hand, Rupiah closed lower at IDR14,393/USD level. We estimate that the JCI will move in the range of 6,593-6,750. Today's recommendations: BWPT, PTPP, INKP, JPFA.

Corporate Action
Cum Dividend Date: UNIC (IDR450/share), BSSR (IDR348.92/share), PPGL (IDR6/share).

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