MNCS Morning Navigator

14 Juni 2022

MNCS Morning Navigator June 14, 2022

Global Market Highlights
DJIA weakened -2.79% on Monday (13/06), followed by S&P500 (-3.88%) and Nasdaq (-4.68%). Wall Street continued its correction triggered by the increase in the yield of US T-note 10Y to the level of 3.44% in line with market participants' concerns regarding the aggressiveness of the Fed's monetary tightening which could lead to an economic slowdown, thus to a recession.​​ Today, the market will be looking toward several data releases such as: 1) US PPI MoM; 2) UK Unemployment Rate; 3) Germany Inflation Rate YoY Final.

Domestic Update
The government will conduct an auction for 6 series of SBSN: 1 SPN (new issuance) & 5 PBS (reopening) with an indicative target of IDR9 trillion on Tuesday (14/6/22). MNCS Comment: In the midst of negative external sentiment with the spike in the 10-year UST note yield to the highest level in a decade and the inversion of the yield curve, we expect that investors will tend to wait and see and investor interest in this auction will be limited.
Furthermore, the second dose of vaccination rate nationally has reached 80.7% or equivalent to 168.10 million people.

Company News
1. LPPF IJ planned for an expansion by adding new stalls at Tang City Mall (5,400 m2) on Aug-22. The company targets the addition of 7 new outlets in FY22. Furthermore, the development of outlets also put forward the concept of ESG such as the use of environmentally friendly LED lights and the majority of employee recruitment comes from local sources (Emitennews). MNCS Comment: As of FY21, the number of outlets operated by the company reached 139 outlets, with the target of adding 7 new outlets. It is estimated that in FY22E the company will operate 146 outlets which is expected to improve the company's performance in line with improving mobility and people's purchasing power. Currently, LPPF is trading at 21.50x/25.02x PER/PBV levels.
2. UVCR IJ booked a positive performance with revenue growth in FY21 of +177% YoY to IDR989 billion (vs IDR338 billion in FY20). Net profit also increased +253% YoY to IDR5.57 billion (IQ plus). MNCS Comment: This good performance was supported by an increase in revenue from the shopping voucher segment (+178.54% YoY), leading to an increase in gross profit and operating profit by +127.60% YoY and 129.45% YoY, respectively. It was recorded that GPM was 3.39%, OPM was 0.72% and NPM was 0.59%. Currently, UVCR is trading at 43.07x/3.07x PER/PBV.
3. BVIC IJ plans to conduct a rights issue by issuing 7.04 billion new shares, with the exercise price in the range of IDR140-170 per share. The estimated funding target is IDR985.91 billion to IDR1.20 trillion (IQ Plus). MNCS Comment: The purpose of the rights issue VI is to strengthen the capital structure in order to fulfill the minimum core capital, where in FY22 the minimum core capital set by the OJK was IDR3 trillion. As for 1Q22, the company's equity position was IDR2.99 trillion. BVIC is currently trading at 0.49x PBV.

IHSG Updates
JCI weakened by -1.29% to 6,995.44 on Monday (13/06), followed by net foreign buy which reached IDR376.19 billion. All sectors weakened and weighed on the index, led by the transportation sector (-3.45%) followed by the technology sector (-3.43%). The index's decline was in line with Wall Street and Asian bourses. Negative sentiment came from the release of data on the US inflation rate in May-22 which reached +8.6% YoY, sparking fears of the Fed's aggressive monetary tightening to the outlook for a slowing global economy. On the other hand, the Rupiah exchange rate closed lower at IDR14,681/USD. We estimate that the JCI will move in the price range of 6,870-7,030. Today's recommendation: FREN, ICBP, PTBA, TINS.

Corporate Action
Cum Dividend: HRUM (IDR15.02/share), SMAR (IDR110/share), NELY (IDR10/share)

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