Global Market Highlight
DJIA fell by -0.36% on Wednesday (28/07) followed by S&P 500 (-0.02%), while Nasdaq rose by +0.70%. Wall street closing was mixed after the Fed in the Federal Open Market Committee (FOMC) meeting decided to hold the interest rate or the Fed Fund Rate in the range of 0%-0.25%. Subsequently, The Fed still maintains bond allocation purchasement at USD120 billion per month until there is substantial improvement in employment and inflation. The market will look forward to several data releases today, such as: 1) US GDP Growth Rate QoQ; 2) US Fed Interest Rate Decision; 3) Germany Unemployment Rate.
Domestic Update
• In the latest flagship report of World Economic Outlook July 2021, International Monetary Fund (IMF) revised growth outlook for Indonesia in FY21 to 3.9% from previously at 4.3% in April 2021. MNCS Comment: The recent downgrade projection of Indonesia GDP growth by the IMF is in line with Bank Indonesia (BI) expectation and our estimate. BI expects domestic economic output to grow 3.5-4.3% in 2021 (vs 4.1-5.1% previously), meanwhile we estimate the real GDP figure to expand 3.76% after considering stricter social and healthcare intervention measures. We see Covid-19 cases surge remain the biggest risk that could derail economic recovery and prospects. According to an IMF report, due to lagging vaccination, India and Indonesia would suffer the most among G20 economies.
• Furthermore, there was an addition of 5,525 new Covid-19 cases in Jakarta yesterday.
Company News
1. INCO IJ posted USD414.94 million revenue in 1H21 increased +15.14% YoY (vs USD360.37 million in 1H20). COGS increased from USD319.80 million in 1H20 to USD329.14 million in 1H21. INCO recorded a net profit of USD58.78 million in 1H21 or up +15.14% YoY (vs USD53.12 million in 1H20) (Bisnis Indonesia). MNCS Comment: INCO's top line/bottom line result was lower than our estimation, which only reached 48.22%/42.80%. We believe this is due to the increase in cost as well as lower production volume. Currently INCO is trading at 31.05x/1.78x PE/PBV levels.
2. BBTN IJ recorded the outstanding of credit and financing of IDR265.9 trillion in 1H21 or up +5.59% YoY (vs IDR251.83 trillion in 1H20). Deposits increased from IDR226.32 trillion in 1H20 to IDR298.38 trillion in 1H21. On the other hand, NII grew 28.18% YoY, NPL was 4.10% better than 1H20 at 4.71%. BBTN recorded IDR920 billion net profit in 1H21 or up +19.87% YoY (vs IDR768 billion in 1H20) (CNBC Indonesia). MNCS Comment: BBTN's net profit is quite in-line with MNCS estimates reflecting 49.56% of the FY21E target. The loan growth target from management was revised at the level of 6%-7% from the previous projection of around 9%, driven by the increase in Covid-19 cases in 2Q21. Currently BBTN is trading at 5.55x/0.73x PE/PBV levels.
3. AALI IJ posted revenue of IDR10.83 trillion in 1H21 or up +19.27% YoY (vs IDR9.08 trillion in 1H20). COGS increased from IDR7.78 trillion in 1H20 to IDR8.62 trillion in 1H21. AALI recorded a net profit of IDR649.34 billion in 1H21 or up +65.69% YoY (vs IDR391.90 billion in 1H20) (IQ Plus). MNCS Comment: AALI's 1H21 performance is excellent, beyond our estimate reaching 51%/58% for the top and bottom line as it was well below our estimate in the 1Q21. We believe the tremendous quarterly increase is supported by higher CPO price. We hope that 3Q21 performance will be even better as the government lower the export levy. Currently AALI is trading at 12.12x/0.81x PE/PBV levels.
IHSG Updates
JCI fell by -0.14% to 6,088.52 on Wednesday (28/07) followed by net foreign sell reaching IDR329.51 billion. JCI closing was lower along with most sectors led by infrastructure (-1.48%) followed by transport (-0.88%). On the other hand, the cyclical sector strengthened by +0.66%, followed by finance (+0.16%). JCI weakened as investors await for the FOMC meeting result regarding the reduction of asset purchases in the market. Meanwhile the Rupiah exchange rate was strengthening at Rp14,488. We estimate the JCI will move in the range of 6,050-6,120 while waiting for inflation rate. Today's recommendation: ICBP, ANTM, IRRA, ERAA.
Corporate Action
Cum Dividend Date: ELSA (IDR10. 24/share)
Stock Split: Heal (1:5)
RUPS : KRAS
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