MNCS Morning Navigator

22 Juli 2021

MNCS Morning Navigator July 22, 2021

Global Market Highlight

DJIA rose by +0.83% on Wednesday (21/07) followed by S&P 500 (+0.82%), and Nasdaq (+0.92%). Bullish on Wall Street was partly due to the positive reaction to news of quarterly financial reports from several big caps companies. By sector, gains were supported by the energy sector as crude oil prices continued to recover from the sharp decline on Monday. The market will look forward to several data releases today, such as: 1) US Chicago Fed National Activity Index; 2) Eurozone ECB Interest Rate Decision; 3) Eurozone ECB Press Conference.


Domestic Update
• Government successfully raised IDR34 tn from yesterday's (21/07/21) debt securities auction for 7 series including SPN12211021 (new issuance), SPN12220331 (reopening), FR0090 (reopening), FR0091 (reopening), FR0088 (reopening), FR0092 (reopening), FR0089 (reopening). MNCS Comment: The total amount awarded in the last auction was higher than the indicative target set by government at IDR33 tn. Total incoming bids were IDR95.5 tn indicating high investors appetite amid recently downtrend of 10-year U.S Treasury yield and high investor liquidity along with maturing of government bond series FR0053 last week.
• Furthermore, there was an addition of 5,904 new Covid-19 cases in Jakarta yesterday.


Company News
1. HMSP IJ recorded cigarette sales volume of 20.1 billion cigarettes in 2Q21 or an increase of +11.5% YoY (vs 38.5 billion in 2Q20). Where total cigarette sales in the industry also increased 12.4% YoY from 63.6 billion cigarettes in 2Q20 to 71.7 billion cigarettes in 2Q21 (Kontan). MNCS Comment: Although sales volume improved in 2Q21, margins are predicted to remain depressed due to higher cigarette excise tax this year. Meanwhile, a prolonged pandemic also has the potential to weaken consumer purchasing power. Currently HMSP is trading at 12.48x/3.93x PE/PBV levels.
2. BSDE IJ recorded marketing sales of IDR4.5 trillion in 2Q21 or up 56% YoY (vs IDR2.9 trillion in 2Q20). Where this achievement has met 65% of the FY21E target of IDR7 trillion (CNBC Indonesia). MNCS Comment: Residential sales and incentives are still the driving force for marketing sales to grow in 1Q21. Currently BSDE is trading at 8.55x/0.66x PE/PBV levels.
3. ELSA IJ will distribute FY20 cash dividends of around IDR10.24/share or reaching IDR74 trillion from the total FY20 net profit of IDR249 billion (Bisnis Indonesia). MNCS Comment: ELSA's dividend payout ratio is 30% of FY20 net profit, while the dividend yield offered is 3.88% or down compared to FY19 yield of 5.00%. Currently ELSA is trading at 299.75x/0.52x PE/ PBV levels.


IHSG Updates
JCI rose by +0.21% to 6,029.98 on Wednesday (21/07) followed by net foreign buy reaching IDR138.76 billion. JCI closing was higher along with most sectors led by the industrial sector +1.33% followed by cyclical (+1.16%). On the other hand, the transport sector weakened by -1.88%, followed by health (-1.65%). JCI closing was higher as positive sentiment after President Jokowi stated that the gradual opening of public activities could be carried out on July 26. If the trend of covid daily cases continually decline. Meanwhile the Rupiah exchange rate was weakening at Rp14,543. We estimate the JCI will move in the range of 5,970-6,080 while waiting for the interest rate decision. Today's recommendation: ASII, WIIM, BBRI, ERAA.


Corporate Action


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