Global Market Highlight
DJIA rose by +1.30% on Friday (09/07) followed by S&P 500 (+1.13%), and Nasdaq (+0.98%). The Wall Street closing was higher as investors welcomed the upcoming financial reporting season (earnings season). The consensus compiled by Refinitiv estimates that the net profit of listed companies in the S&P 500 will grow an average of 65.8% YoY. The market will look forward to several data releases today, such as: 1) US Consumer Inflation Expectations; 2) Euro Zone Eurogroup Meeting; 3) Japan PPI MoM.
Domestic Update
• Government officially announced the extension of Emergency Public Activity Restriction (PPKM Darurat) in 15 cities outside Java & Bali from (12-20 July 2021) as a part of pandemic curb measures amid rising Covid-19 cases. MNCS comment: Recently jumping infection cases are serious threat for healthcare & economy. We estimated that Covid-19 cumulative cases will be 3.9 for base case scenario and 5.4 mn cases for upper case scenario by mid September-21 if Indonesia follows India trajectory. Implementing restriction outside Java & Bali will have consequences on FY21 economic performance. We revised down our FY21 GDP projection from 4.46% to 4.01-4.18%. Meanwhile average inflation will likely to below central banks lower bound target at 2%. However if prolong social restriction occur, FY21 Indonesia economic output will likely to fall below 4%.
• Furthermore, there was an addition of 13,133 new Covid-19 cases in Jakarta yesterday.
Company News
1. SMRA IJ recorded marketing sales of IDR2.83 trillion in 1H21 or had realized 71% of the FY21E marketing sales target of IDR4 trillion, which had been increased from the previous IDR3.5 trillion. Based on product segmentation, landed house sales were the main contributor to SMRA's marketing sales of 62% or equivalent to IDR1.76 trillion. Then followed by 16% commercial land, 13% land plots, 9% apartments, and 1% offices (Kontan). MNCS Comment: Residential sales and incentives are still the driving force for growing marketing sales in 1H21. Currently SMRA is trading at 79.53x/1.73x PE/PBV levels.
2. TINS IJ has spent around IDR40.92 billion for exploration activities in 2Q21. Exploration focuses on tin commodities in the form of drilling activities in the waters of Bangka and Kundur waters by using 6 units of Drill Vessels with a total drill of 20,009 meters. Then for onshore exploration activities in 2Q21 including Mapping, Geomagnetism, core logging, core sampling, grid drill measurements and tin drilling on the islands of Bangka and Belitung with a total drill of 7,846 meters (IQ Plus). MNCS Comment: TINS capex for FY21E is budgeted at IDR1.9 trillion which went up by 26.67% YoY from IDR1.5 trillion. We hope that the increase in capex and operational activities can improve TINS financial performance this year.Currently TINS is trading at 293.43x/2.41x PE/PBV levels.
3. MPPA IJ launched 31 virtual stores in collaboration with Gojek through GoMart throughout Jabodetabek. This collaboration will make it easier for customers to buy fresh products, groceries, and household needs and support fast delivery with the Gojek fleet. Currently MPPA has 6,200 products, including 885 fresh products on the GoMart platform (Emitennews). MNCS Comment: We believe the growth of e-groceries will be high amid the pandemic. In FY21E, MPPA focused on adding virtual stores and O2O (online to offline) partnerships through other e-commerce platforms such as Tokopedia. Currently MPPA is trading at 49.33x PBV levels.
IHSG Updates
JCI closing was slightly lower by -0.00% to 6,039.84 on Friday (09/07) while net foreign buy reaching IDR23.11 billion. The market mover in last Friday's trade was the cyclical sector weakening by -0.97%, followed by the financials -0.67%. On the other hand, the infrastructure sector strengthened (+1.86%), followed by the transportation sector (+1.32%). The JCI stagnated as the selling action hit global markets amid the increasing cases of Covid-19 in various developed countries until the death toll from the pandemic worldwide broke the new psychological figure of 4 million people. Meanwhile the Rupiah exchange rate was weakening at IDR14,528. We estimate the JCI will move in the range of 5,985-6,134 while waiting for balance of trade. Today's recommendation: ICBP, PTBA, TLKM, TINS.
Corporate Action
Right Issue: SAME (IDR478/share), ASSA (IDR1,200/share)
Public Expose: RISE
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