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MNCS Morning Navigator

13 Januari 2022

MNCS Morning Navigator January 13, 2022

Global Market Highlights

DJIA rose +0.11% on Wednesday (12/01) followed by S&P 500 (+0.28%) and Nasdaq (+0.23%). The US recorded inflation reaching +7% YoY for the month of Dec-21, which is the highest for almost 40 years. The increase in inflation that had previously worried investors seemed to soften after the Fed's previous statement (11/01) which stated that the inflation rate was high will not make the Fed to be aggressive in raising the benchmark interest rate due to inflation that occurred on Dec-21 according to market expectations/consensus at +7% YoY. In addition, tech stocks rebound after deep losses in the previous days, helping to boost Wall Street. Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless Claims; 2) US Fed Harker Speech; 3) Fed Brainard Speech.

Domestic Update
• Domestic government bond market recorded an outflow as foreign investors holdings in tradable government bonds decreased by IDR3.34 trillion Dec,31-2021 to Jan,11-2022. MNCS Comment: We think the decline in foreign ownership of government bonds was inline with heightened external pressures as UST yield rose from 1.51% last year to >1.70% in the first week of Jan-22. Along with the outflows and UST trend, the 10-year Indo GB yield rose from 6.35% to 6.45%.
• Furthermore, the second dose of vaccination rate nationally has reached 56.5% or equivalent to 117.65 million people.

Company News
1. AKRA IJ targets 20%-25% YoY revenue growth, 12%-15% YoY gross profit increase, and EPS growth by 15%-18% YoY in FY22E (Bisnis Indonesia). MNCS Comment: Due to the target for the distribution segment of fuel and basic chemicals exceeded in FY21, we assess that the company is optimistic to achieve a better performance this year along with the global economic recovery which will lead to an increase in mobility. In addition, the revenue contribution from JIIPE is also expected to be a driver of performance growth in FY22E. AKRA is trading at the level of 15.49x/1.82x PER/PBV.
2. TINS IJ spent IDR56.40 billion for exploration activities in 4Q21, with IDR44.01 billion for operational activities and IDR12.39 billion for investment (IQPlus). MNCS Comment: In 1Q22, the company will continue its exploration activities from the previous year with prospecting and detailed drilling in Bangka and Kundur waters, also tin drilling in Bangka and Belitung islands. With this exploration activity, it is hoped that TINS can find more reserves in the future to increase tin production and sales. TINS is trading at the level of 11.50x/1.68x PER/PBV.
3. LPKR IJ recorded IDR4.96 trillion of marketing sales, or equal to +86% YoY, and 18% above the target set at IDR4.2 trillion in FY21. This achievement was driven by the sales of landed house products as the main contribution of 63% in 4Q21. MNCS Comment: We see this success has prompted the company to increase its total marketing sales target by around 5% YoY to IDR5.2 trillion in FY22E. On the one hand, the extension of 0% down payment incentive might increase property demand this year. LPKR is trading at the level of 0.56x PBV.

IHSG Updates
JCI weakened -0.01% to 6,647.07 on Wednesday (12/01) followed by net foreign buy reaching IDR482.76 billion. The technology sector is still the laggard of the JCI movement since the last 3 days with a weakened of -2.17% followed by the financial sector (-1.02%). On the other hand, the raw materials sector strengthened +1.05% followed by the energy sector which rebounded (+1.04%). JCI had rebounded in session 1 of trading but declined in session 2 and closed in the red zone. In addition, the Ministry of Health's projected spike in cases of the Omicron variant that will fall in February later add to the list of negative sentiments for the JCI. On the other hand, Rupiah closed higher at IDR14,318/USD level. We estimate that the JCI will move in the range of 6,600-6,650. Today's recommendations: AALI, BBRI, EXCL, MYOR.

Corporate Action
RUPS: PZZA, UNIQ, MGNA

Disclaimer On

AALI BBRI EXCL MYOR AKRA TINS LPKR

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