MNCS Morning Navigator

05 Juli 2022

MNCS Morning Navigator July 5, 2022

Global Market Highlights
DJIA was closed commemorating US independence day on Monday (04/07). With growing fears of an economic recession, investors would be closely watching employment data, where data on Jun-22 nonfarm payrolls declined according to consensus at 270,000 (vs 390,000 in May-22), while the unemployment rate stagnated at 3.6%. Today, the market will be looking toward several data releases such as: 1) UK S&P Global/CIPS UK Services PMI Final; 2) Germany S&P Global Services PMI Final; 3) France S&P Global Services PMI Final.

Domestic Update
The government will conduct an auction of 7 series of SUN with an indicative target of IDR15-22.5 trillion. MNCS Comment: The government lowered the indicative target from the previous IDR20-30 trillion in line with lower issuance needs and declining market appetite amid the global monetary tightening cycle.
Furthermore, the national Covid-19 daily rate had increased by 1,434 active cases (04/07).

Company News
1. GGRM IJ would distribute cash dividends of IDR4.33 trillion, equivalent to IDR2,250 per share, with cum date on 8-Jul 22 for both the regular and negotiation markets (CNBC). MNCS Comment: Thus, GGRM offers a dividend yield of 7.13% and a payout ratio of 77.25% of net profit for the FY21 fiscal year of IDR5.60 trillion. The amount of dividend per share decreased after the company maintained its DPS of IDR2,600 since FY16 and did not distribute dividends in FY20 due to the increasing cigarette excise taxes that weighed on financial performance. It was recorded that the FY20 net profit fell -26.71% YoY. GGRM is currently trading at 14.10x/1.01x PER/PBV.
2. ASII IJ would acquire a 49.56% stake in PT Bank Jasa Jakarta through the corporate entity PT Sedaya Multi Investama (Astra Financial) with a transaction value of IDR3.87 trillion. This indicated Astra to re-enter the banking business after previously selling Permata Bank (Kontan). MNCS Comment: PT Bank Jasa Jakarta is a conventional bank that serves general banking products such as deposits, loans, services and other services. As of FY21, Bank Jasa Jakarta has a total equity of IDR2.08 trillion, LDR 48.60%, NPL 0.58%, NIM 2.98% and ROE 4.79%. It is hoped that this acquisition will improve Astra Financial's performance where revenue in FY21 grew +22.56% YoY and contributed 10.70% of ASII's total revenue. ASII is currently traded at 9.59x/1.47x PER/PBV.
3. MTDL IJ targeted revenue and net profit growth for FY22E of +15% YoY/+20% YoY, respectively (Kontan). MNCS Comment: The continuing increasing recovery in mobility and the gradually fading restrictions would make the company's dealers easier to expand and potentially boost its financial performance through marketing the company's products and services. One of them is through BI Fast development services, system integration and the development of super apps in line with the rapid growth of domestic digitalization. MTDL is currently traded at 11.00x/2.47x PER/PBV.

IHSG Updates
JCI weakened by -2.28% to 6,639.17 on Monday (04/07), followed by net foreign sell which reached IDR1.11 trillion. All sectors weakened and weighed on the index, led by the technology sector (-4.00%) followed by the transportation sector (-3.57%). The weakening of the index occurred in line with investors' concerns about the potential for a global economic recession, where the release of the US ISM Manufacturing PMI data in Jun-22 fell to a level of 53 (vs 56.1 in May-22) and the US GDP 2Q22 which was expected to contract again. The decline in a number of Indonesia’s flagship commodity prices, such as CPO -7.56%, also attracted investors' attention. On the other hand, the Rupiah exchange rate closed lower at IDR14,968/USD. We estimate that the JCI will move in the price range of 6,600-6,700. Today's recommendation: BBTN, BMRI, ENRG, LSIP.

Corporate Action
Cum Dividend: WIIM (IDR21.6/share)

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