Global Market Highlights
DJIA rose +1.65% on Friday (28/01) followed by S&P 500 (+2.43%) and Nasdaq (+3.13%). Wall Street's strengthening was driven by the issuer's financial reports that recorded positive financial performance exceeding the consensus predicted by the market. The weakening of the 10Y T-note yield by -2.6 bps to 1.77% served as a catalyst for the index's strengthening. The rebound that occurred in the index was in line with the actions of investors who took advantage of the weakening of prices and were supported by the company's good performance in FY21. Today, the market will be looking toward several data releases such as: 1) Germany Inflation Rate YoY Prel; 2) Eurozone GDP Growth Rate QoQ Flash; 3) Japan Consumer Confidence.
Domestic Update
• There has been an increase in the Covid-19 daily cases, where on (30/01), the Covid-19 cases had reached 12,422 cases or higher than the day before (vs. 11,588 cases). DKI Jakarta has the highest cases with 6,613 cases, followed by West Java with 2,584 cases and Banten with 1,740 cases. MNCS Comment: We see that this condition might become a concern for the potential stagnant economy recovery. If the cases keep increasing, there is a possibility of mobility restriction.
• Furthermore, the second dose of vaccination rate nationally has reached 61.4% or equivalent to 127.92 million people.
Company News
1. ASLC IJ targets 50,000 units of car sales in FY22E. After acquiring JBA Bidwin Indonesia in FY19, the company became the number 1 auction house in Indonesia with 40% market share. In FY21, the company achieved Gross Traded Value (GTV) of around IDR5.5 trillion (Kontan). MNCS Comment: We see that the company is optimistic that it might achieve its target and expand its market share through innovation in developing used vehicle marketplace through Caroline.id and the automotive auction business through JBA Bidwin Indonesia. ASLC is trading at the level of 21.95x PBV.
2. WTON IJ prepared capex IDR292.5 billion of capex in FY22E which will be allocated for mobile power plant development and plant optimization. In 3Q21, the company's net profit decreased -12.3% YoY to IDR16 billion while revenue grew +12.1% YoY to IDR1.22 trillion (Bisnis Indonesia). MNCS Comment: We view that the company has the potential to improve its performance this year in line with the economic recovery that might encourage the acceleration of infrastructure development which can increase its contract acquisition. WTON is currently trading at 26.38/0.57x PER/PBV.
3. ADHI IJ collaborates with PT Telkom Indonesia Tbk in building technology digitalization and telecommunication services in the working environment of ADHI and its subsidiaries. The initial step of the collaboration will be applied to the Transit Oriented Development (TOD) based area of ADCP (Kontan). MNCS Comment: We see that through this collaboration, ADHI might give an added value in its property area, thus potentially increasing its property sales in the future. ADHI is trading at the level of 0.52x PBV.
IHSG Updates
JCI rose +0.52% to 6,645.51 on Friday (27/01) followed by net foreign buy which reached Rp214.79 billion. The sector leading the index strengthening was the transportation sector (+4.34%) followed by the technology sector (+2.19%). On the other hand, the health sector weakened -0.29% followed by the non-cyclical sector (-0.12%). Investors responded positively to the increase in the index due to the government's readiness in handling the current spike in cases amid the increasing spread of the Omicron variant. The DKI Jakarta government is trying to maintain the bed occupancy rate (BOR) limit and is not exceeding 60%. As of (27/01), the BOR for the Jakarta area has been filled at 45% while the intensive care unit (ICU) has reached 14%. In addition, with the growing sentiment regarding the increase in US interest rates on Mar-22, Lembaga Penjamin Simpanan (LPS) is optimistic that the increase in interest rates will not have too much effect on the domestic financial market. This is in line with the statement of Bank Indonesia (BI) and the economic recovery will keep going. On the other hand, the Rupiah weakened at IDR14,388/USD level. We estimate that the JCI will move in the range of 6,570-6,650. Today's recommendations: JPFA, SRTG, BIRD, WIFI.
Corporate Action
RUPS: PBRX
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