MNCS Morning Navigator

21 Juni 2022

MNCS Morning Navigator June 21, 2022

Global Market Highlights
Wall Street was closed in commemorating the emancipation day on Monday (20/06), while the European markets rose after previously being depressed last week with the investors welcoming the ECB central bank's move to overcome the debt crisis. Today's market attention will focus on the release of data on home sales (existing home sales) for May-22 which is estimated to decline. Today, the market will be looking toward several data releases such as: 1) US Chicago Fed National Activity Index; 2) US Existing Home Sales MoM; 3) US Fed Barkin Speech.

Domestic Update
Sales of SBR011 reached IDR13.91 trillion, oversubscribed 2.78x from the initial target of IDR5.0 trillion with the number of investors who invested reaching 47,673. MNCS Comment: SBR011 recorded the largest nominal sales and number of investors in the history of non-tradable retail SBN issuance which reflected the high interest in APBN financing participation in line with the improving public investment literacy.
Furthermore, the national Covid-19 daily rate had increased by 1,180 active cases (20/06).

Company News
1. MTEL IJ targets revenue growth of +11% YoY to IDR7.6 trillion in FY22E, while net profit and EBITDA are expected to grow +22% YoY and +13% YoY, respectively (CNBC Indonesia). MNCS Comment: We are optimistic that the company can meet this target, supported by: 1) tower portfolio reaching >28,000; 2) plans for tower expansion organically and inorganically; 3) the company's efficiency efforts to use solar panels in tower locations that are not reached by a power source; 4) allocation of capex of IDR9.9 trillion in FY22E. Currently, MTEL is trading at 32.50x/1.75x PER/PBV.
2. SILO IJ had just opened the International Medical Center (IMC) in Labuan Bajo. It is hoped that the existence of these facilities can improve health services, especially for the local community and encourage foreign tourist visits (Investor ID). MNCS Comment: The addition of these facilities will support the operation of the Labuan Bajo hospital which has existed since FY16, and is expected to improve the company's performance in the future. As of 1Q22, the company has operated 41 hospitals with 3,941 beds. Currently, SILO is trading at 32.75x/1.98x PER/PBV.
3. BRMS IJ targets the construction of the gold factory in Palu to be completed in 3Q22 with the capacity of the plant can produce 4,000 tons of ore per day (CNBC Indonesia). MNCS Comment: With the completion of the construction of factory II, the company's total capacity to produce gold ore can reach 4,500 per day, with a production capacity of 500 gold ore contributed by factory I. The capacity increase is in line with the increase in gold production in 1Q22 which reached 41Kg (vs 24Kg in 1Q21). BRMS is currently trading at 393.06x/2.42x PER/PBV.

IHSG Updates
JCI strengthened by +0.57% to 6,976.38 on Monday (20/06), followed by net foreign sell which reached IDR828.08 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the non-cyclical sector (+1.83%) followed by the health sector (+1.16%). On the other hand, the sector that experienced weakness was the transportation sector (-1.73%) followed by the energy sector (-0.89%). The index managed to rebound with the investors watching the decision of the Chinese central bank (PBOC) to maintain the benchmark lending rate at 1Y (3.7%) and 5Y (4.45%) which is expected to provide a stimulus for the economy. On the other hand, the Rupiah exchange rate closed lower at IDR14,833/USD. We estimate that the JCI will move in the price range of 6,850-7,100. Today's recommendation: ERAA, MDKA, MEDC, PTPP.

Corporate Action
Cum Stock Split: PBSA (1:2)

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