Global Market Highlights
DJIA weakened -1.76% on Tuesday (01/03), followed by S&P 500 (-1.55%) and Nasdaq (+1.59%). Wall Street was pressured due to the negotiations between the two countries foundered after Russia insisted on continuing to invade, causing increased global economic uncertainty amid inflation rates that threatened market participants and soaring global commodities prices. With the investors ignoring the release of positive economic data, the ISM Manufacturing PMI on Feb-22 accelerated to 58.6 points (vs. 57.6 on Jan-22), and Construction Spending Jan-22 rose +1.3% MoM (vs + 0.8% on Dec-21). Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2)UK Nationwide Housing Prices YoY; 3) Germany Unemployment Rate.
Domestic Update
• The Indonesian government has succeeded in issuing SBN worth IDR19 trillion in yesterday's auction, lower than the indicative target of Rp23 trillion. MNCS Comment: The amount won was lower than the indicative target in line with the better outlook for the budget deficit and lower financing needs for this year. In addition, the value of incoming bids was recorded at IDR61.52 trillion, lower than the previous auction of IDR76.77 trillion, as investors' stance remained wait and see amid the heating up of geopolitical tensions between Russia and Ukraine.
• Furthermore, the second dose of vaccination rate nationally has reached 69.4% or equivalent to 144.46 million people.
Company News
1. ITMG IJ recorded total coal sales of 20.1 million tons or decreased by -5.18% YoY in FY21. Meanwhile, total revenue rose +75.18% YoY to USD2.07 billion in FY21 (vs USD1.18 billion in FY20. Net profit was recorded at USD475 million in FY21 or up +373% YoY (vs USD38 million in FY20) (Kontan). MNCS Comment: We see that the improvement in financial performance is driven by an increase in coal average selling price (ASP) to USD103.2 per ton and the company's cost efficiency effort to maximize its profitability. ITMG is trading at the level of 4.57x/1.80x PER/PBV.
2. SMCB IJ recorded a +10.98% YoY revenue increase to IDR11.2 trillion in FY21 (vs IDR10.1 trillion in FY20). This was driven by the increase in cement sales by +10.81% to IDR10.2 trillion in FY21. Net profit was recorded at IDR720.9 billion or up +10.74% YoY in FY21 (vs IDR650.9 billion in FY20) (Bisnis Indonesia). MNCS Comment: We see that the company has the potential to increase its sales this year along with the economic recovery that might encourage the acceleration of infrastructure development. SMCB is trading at the level of 22.08x/1.42x PER/PBV.
3. SMGR IJ recorded a revenue decrease of -0.61% YoY to IDR34.95 trillion in FY21 (vs IDR35.17 trillion in FY20). Cement revenue dropped by -1.65% YoY to IDR28.5 trillion in FY21. Net profit was recorded at IDR2.02 trillion or down -27.61% YoY in FY21 (vs IDR2.79 trillion in FY20) (Bisnis Indonesia). MNCS Comment: The company’s performance drop was due to increased competition along with decreasing demand during the pandemic, also increasing coal price. We see that the company might improve its performance this year, supported by the potential growth in cement consumption along with the economic recovery. SMGR is trading at the level of 20.84x/1.16x PER/PBV.
IHSG Updates
JCI rose +0.48% to 6,921.44 on Tuesday (01/03), followed by net foreign buys which reached IDR1.70 trillion. The sector leading the index strengthening was the technology sector (+3.06%) followed by the energy sector (+1.27%). On the other hand, the health sector weakened by -1.69% followed by the transportation sector (-0.66%). The index appreciated along with other Asian markets in the midst of the ongoing Russia-Ukraine geopolitical crisis, while the catalyst that supported the index's strengthening was the negotiation effort between Russia and Ukraine to find a solution to the ongoing conflict, which managed to quell the concerns of market players. On the other hand, the release of the February-22 Manufacturing PMI economic data, which slowed but remained expansive at 51.2 (vs 53.7 in Jan-22). In addition, the Consumer Price Index (CPI) in Feb-22 recorded 0.02% MoM deflation and 2.02% YoY inflation rate. On the other hand, the Rupiah weakened at IDR14,328/USD level. We estimate that the JCI will move in the range of 6,850-7,000. Today’s recommendation: PGAS, CTRA, BIRD, CPRO.
Corporate Action
Cum Right Issue Date: BJBR (IDR1,355/share)
RUPS: BBTN, BRPT
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