MNCS Morning Navigator

11 Januari 2022

MNCS Morning Navigator January 11, 2022

Global Market Highlights

DJIA weakened -0.45% on Monday (10/01) followed by S&P 500 (-0.14%), while Nasdaq advanced +0.05%. The weakness that occurred over the past few days has begun to be used by investors to return on buying (bargain hunting) as seen from the relatively limited S&P 500 and the Nasdaq which were closed in the green zone. DJIA continued to be corrected after Goldman Sachs on Sunday (09/01) released an estimate of a 4x increase in the benchmark interest rate in 2022. Furthermore, the movement of the index will be determined by the release of the issuer's financial statements and the development of the Covid-19 case. Today, the market will be looking toward several data releases such as: 1) US Fed George Speech; 2) US Fed Chair Powell Testimony; 3) Japan Coincident Index Prel.

Domestic Update
• Bank Indonesia (BI) reported Consumer Confidence Index (CCI) fell 2 points to 118.3 in Dec-21 (vs 118.5 in Nov-21). Three out of six sub-indices weakened (economic outlook, income expectations for the next six months and job availability expectation. MNCS Comment: So far consumer sentiments remain optimistic. However, the weakening of consumer future’s expectation may depict the risk from Covid-19 Omicron spread that will likely hinder the economy from fully recovering.
• Furthermore, the second dose of vaccination rate nationally has reached 56.1% or equivalent to 116.83 million people.

Company News
1. UNTR IJ has budgeted USD750 million capex in FY22E (vs USD290 million in FY21). 75% will be allocated for mining contractor business, coal mining, and heavy equipment replacement, 18% for gold mining exploration purposes, and the rest will be used for heavy equipment distribution business needs (Bisnis Indonesia). MNCS Comment: We see the company's optimism has driven the company to target 3,700 units sales of heavy equipment or an increase by +23.3% YoY (vs 3,000 units in FY2021). Currently UNTR is trading at the level of 7.80x/1.23x PER/PBV levels.
2. MTEL IJ targets IDR7.4 trillion revenue in FY22E with a net profit of IDR1.6 trillion. In 1H21, MTEL revenue was IDR3.23 trillion with a net profit of IDR700.74 billion (Bisnis Indonesia). MNCS Comment: We see the company’s target higher than the previous year which was in line with the strategy plans to develop organic and inorganic businesses, including increasing built to suit services, adding collocations for operators, consolidating with other tower companies and providing new services. Currently MTEL is trading at the level of 3.02x/0.31x PER/PBV.
3. WIKA IJ recorded IDR11.64 trillion revenue in 3Q21 or equivalent to +12.13% increased YoY and a net profit of IDR104.94 billion or rose by +109.08% YoY (Kontan). MNCS Comment: We see the increase in top line was driven by revenue growth in the Energy and Industrial Plant segment as the main contributors which were worth IDR1.5 trillion in 3Q21 or up +181.8%YoY. Currently WIKA is trading at the level of 0.77x PBV.

IHSG Updates
JCI weakened -0.15% to 6,691.12 on Monday (10/01) followed by net foreign buy reaching IDR249.49 billion. A number of sectors that weighed on the index were the technology sector (-3.52%) followed by the cyclical sector (-1.29%). On the other hand, the health sector strengthened +1.78% followed by the financial sector (+1.11%). The release of Bank Indonesia data regarding the Consumer Confidence Index which stood at 118.3 for the month of Dec-21 (vs 118.5 Nov-21) illustrates the consumer's condition towards a relatively stable economic condition that has not been able to match the market's fears of the spread of Covid-19 cases. 19 variants of Omicron as well as US monetary tightening that threatens stock markets around the world have an impact on the JCI. With the existing negative catalysts, investors tend to shift the composition of their portfolios to sectors in finance and health, another sector that can be monitored is the energy sector, especially coal, triggered by the opening of export options for coal considering the need for PLN which is starting to be fulfilled. On the other hand, Rupiah closed lower at IDR14,308/USD level. We estimate that the JCI will move in the range of 6,593-6,750. Today's recommendations: BBYB, BUKA, TKIM, ACES.

Corporate Action
Cum Dividend Date: MLPT (IDR450/share)
Stocksplit: AKRA (1:5)

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