MNCS Morning Navigator

26 Juli 2021

MNCS Morning Navigator July 26, 2021

Global Market Highlight

DJIA rose by +0.68% on Friday (23/07) followed by S&P 500 (+1.01%), and Nasdaq (+1.04%). All three major U.S. stock indexes closed at record highs on Friday after a rocky week in which investors fretted over the Delta coronavirus variant and cheered an economic recovery. Mega Cap tech stocks and positive corporate earnings helped drive main U.S. indexes up again. The market will look forward to several data releases today, such as: 1) US New Home Sales MoM; 2) Germany Ifo Business Climate; 3) UK BoE Vlieghe Speech.


Domestic Update
• President Joko Widodo decided to extend Public Activity Restriction (PPKM Level 4) for a week from July 26 - August 2, 2021. MNCS Comment: Since PPKM Level 4 was implemented on July 21, the government eased some crucial activities compared to previous social restriction measures known as PPKM Darurat. Covid-19 daily cases fluctuated in line with inconsistent testing, tracing and vaccine inoculation undertaken. Last week MoF announced the PEN budget to be increased from IDR699.43tn to IDR744.95tn. However PEN budget realization stayed slow with 36% from target. In addition, slow regional budget realization which stood at 18.5% from the target of IDR25.46tn could hinder potential economic recovery.
• Furthermore, there was an addition of 5,393 new Covid-19 cases in Jakarta yesterday.

Company News
1. MYOR IJ will distribute FY20 cash dividends of around IDR52/share or reaching IDR1.16 trillion of the total FY20 net profit of IDR2.06 trillion (Bisnis Indonesia). MNCS Comment: MYOR's payout ratio is 55% of FY20 net profit, while the dividend yield offered is 2.32% or an increase compared to FY19 yield of 1.34%. Currently MYOR is trading at 15.22x/4.23x PE/PBV levels.
2. MTDL IJ through its subsidiary PT Mitra Integrasi Informatika (MII) in collaboration with LinkedIn which is known as one of the largest professional networking platforms in the world as LinkedIn Alliance Partner for LinkedIn Talent Solution (LTS) with more than 16,000 online courses with professional teachers (IQ Plus). MNCS Comment: This partnership could potentially expand the solution business segment. MTDL targets revenue growth of 8% YoY and net profit of 10% YoY in FY21E. Currently MTDL is trading at 12.72x/2.52x PE/PBV levels.
3. MLPL IJ plans to buy back shares with a maximum purchase price of IDR720/share with a maximum of 10% of the paid-up and issued capital or 1.46 billion shares. To carry out this share buy back, MLPL has prepared funds of IDR425 billion (IQ Plus). MNCS Comment: We believe the buyback strategy should increase the liquidity as the stock price experienced a decrease 21% from its highest level in June-2021. Currently MLPL is trading at 3.13x PBV levels.

IHSG Updates
JCI fell by -0.58% to 6,101.69 on Friday (23/07) followed by net foreign sell reaching IDR117.22 billion. JCI closing was lower along with most sectors led by the non-cyclical sector -1.82% followed by industrial (-1.00%). On the other hand, the transport sector strengthened by +2.43%, followed by cyclical (+1.27%). The increase in daily Covid-19 cases made investors worried about the cancellation of the easing of the Level 3 and 4 Community Activity Restrictions (PPKM) on July 26. On the other hand, BI projects Indonesia's GDP will be in the range of 3.5%-4.3% lower than the previous estimate of 4.1-5.1%. Meanwhile the Rupiah exchange rate was weakening at Rp14,493. We estimate the JCI will move in the range of 6,050-6,150 while waiting for inflation rate YoY. Today's recommendation: EXCL, IMAS, INDY, BSDE.

Corporate Action

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