Global Market Highlights
DJIA weakened -0.49% on Monday (28/02), followed by S&P 500 (-0.24%) while Nasdaq (+0.41%). Wall Street closed mixed with the escalation of geopolitical tensions between Russia and Ukraine, with market participants considering a slowdown in the global economy due to the economic sanctions imposed on Russia. In addition, restrictive measures that have an impact on disrupting the supply of energy and metals can trigger higher inflation. From the situation of the development of Cov-19, the weekly average of new cases added reached 65,933, the lowest in the last 7 months. Today, the market will be looking toward several data releases such as: 1) US Markit Manufacturing PMI Final; 2) US ISM Manufacturing PMI; 3) Germany Inflation Rate YoY Prel.
Domestic Update
• Indonesia's manufacturing PMI in Feb-22 stood at 51.2 or decreased 2.5 points from Jan-22. MNCS Comment: Although recorded lower, manufacturing activities in Indonesia remained at an expansionary level amid rising Covid-19 cases due to spread of the Omicron variant triggering the 3rd wave.
• Furthermore, the second dose of vaccination rate nationally has reached 69.0% or equivalent to 143.78 million people.
Company News
1. ASII IJ recorded total car sales of 489,000 units, up +81% YoY in FY21 which led to an increase in net income by +33% YoY to IDR233.48 trillion. Net profit of IDR20.19 trillion or up +26% YoY in FY21 (vs IDR16.16 trillion) (Emiten News). MNCS Comment: We see that the company can maintain its performance along with the extension of PPnBM DTP incentives and economic recovery that might increase people's purchasing power. ASII is trading at the level of 1.76x/1.41x PER/PBV.
2. UNTR IJ posted a net profit of IDR10.28 trillion in FY21, up +88% YoY (vs IDR5.63 trillion in FY20). This increase was supported by revenue growth of +32% YoY to IDR79.46 trillion (Emiten News). MNCS Comment: We see that the improvement in company's performance was supported by an increase in heavy equipment demand, where company’s revenue in the machinery segment rose by +70% YoY to IDR22.8 trillion in FY21 (vs IDR13.4 trillion in FY20). UNTR is trading at the level of 9.04x/1.35x PER/PBV.
3. HRUM IJ targets coal production growth of +35% YoY in FY22E of 4.72 tons (vs 3.5 million tons in FY21). This year, the company has allocated USD25 million of capex (vs USD16 million in FY21) (Kontan). MNCS Comment: We see that the company's optimism is supported by the potential for global coal prices amid the limited supply. In addition, the company is also expansive in diversifying into the nickel sector which is expected to improve the company's performance in the future. HRUM is trading at the level of 46.35x/5.40x PER/PBV.
IHSG Updates
JCI rose +1.03% to 6,888.17 on Friday (25/02), followed by net foreign buys which reached Rp1.08 trillion. A number of sectors supported the index movement, including the transportation sector (+3.61%) followed by the financial sector (+1.84%). On the other hand, the sector that held back the index rate was the non-cyclical sector (-0.53%) followed by the energy sector (-0.48%). The strengthening of the index is in line with the strengthening of Wall Street (24/01) amid the heating up of geopolitical tensions between Russia and Ukraine. Meanwhile, the current US move along with its allies is the imposition of sanctions on Russia which triggered an increase in a number of commodity prices that had a positive impact on the domestic market, marked by a rebound of JCI, followed by the high and consistent inflow of foreign investors that was recorded in line with the optimism for the improvement in the domestic economy. On the other hand, the Rupiah weakened at IDR14,328/USD level. We estimate that the JCI will move in the range of 6,800-6,910 while waiting for the Markit Manufacturing PMI and Inflation Rate data to be released. Today’s recommendation: ASII, MLIA, PMMP, BSDE.
Corporate Action
RUPS: MIRA, BBRI, SUPR
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