MNCS Morning Navigator

17 Juni 2022

MNCS Morning Navigator June 17, 2022

Global Market Highlights
DJIA weakened by -2.42% on Thursday (16/06), followed by S&P500 (-3.25%) and Nasdaq (-4.08%). Wall Street's weakness was triggered by investors' fears of a potential economic recession, as reflected by the release of housing starts data for May-22 which fell to 1.55 million (-14.4% MoM) and was below the consensus of 1.70. million. Today, the market will be looking toward several data releases such as: 1) US Industrial Production YoY; 2) US CB Leading Index MoM; 3) Japan BoJ Interest Rate Decision.

Domestic Update
Indonesia's external debt ratio reached 32.5% of GDP in Apr-22, lower than the previous month's ratio of 33.8% in Mar-22. MNCS Comment: The decline in external debt was caused by a decline in the government's external debt position (-7.3% YoY), in line with the maturity of several series of government securities.
Furthermore, the national Covid-19 daily rate had increased by 1,173 active cases (16/06).

Company News
1. MEDC IJ booked revenue of USD489.34 million or grew +62.06% YoY in 1Q22. Net profit also increased to USD90.04 million or grew +1,659% YoY (Kontan). MNCS Comment: This great performance was due to the increase in oil and gas contract revenue by +64.10% YoY to USD454.55 million. Total oil and gas production in 1Q22 also increased to 184 mboepd (vs 101 mboepd in 1Q21). Meanwhile, the production cost was successfully maintained at USD 8 per boe in accordance with the company's guidance at < USD 10 per boe. MEDC is currently trading at 3.16x/1.01x PER/PBV levels.
2. WSKT IJ posted an increase in new contracts of IDR 8.13 trillion or grew +321.43% YoY up to 5M22. Moreover, the FY22E contract acquisition target is IDR30 trillion, which will be supported by IKN projects, water infrastructure projects and overseas projects (Kontan). MNCS Comment: The contract acquisition target increased from the FY21 realization of IDR20.1 trillion. WSKT is currently trading at -4.51x/1.39x PER/PBV.
3. PALM IJ recorded a 1Q22 net profit of IDR886.01 (vs a net loss of IDR363.49 billion in 1Q21) amid no revenue or IDR0. The profit was supported by other net income of Rp891.04 billion (Business Market). MNCS Comment: The absence of income was caused by the plan to change business activities to investment business, after previously selling all ownership in PT Mutiara Agam who was the only source of income. Currently, PALM is trading at 1.55x/0.86x PER/PBV levels.

IHSG Updates
JCI strengthened by +0.62% to 7,050.33 on Thursday (16/06), followed by net foreign buy which reached IDR397.60 billion. Almost all sectors experienced a strengthening and pushed the index rate, led by the energy sector (+2.25%) followed by the industrial sector (+1.24%). On the other hand, the sector that experienced weakness was the technology sector (-1.25%). The index managed to rebound in line with the strengthening of Wall Street. We see that the market had already priced-in in response to the Fed's interest rate hike (FFR) which rose +75 bps to 1.50%-1.75%, and opened the opportunity for the index to strengthen. On the other hand, the Rupiah exchange rate closed lower at IDR14,768/USD. We estimate that the JCI will move in the price range of 6,960-7,100 pending the release of Motorbike Sales YoY MAY data. Today's recommendation: AGII, BBCA, ELSA, INDF.

Corporate Action
Cum Dividend: HMSP (IDR63.3/share), TMAS (IDR65.79/share), TEBE (IDR45/share)

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