Global Market Highlights
DJIA rose +2.00% on Wednesday (09/03), followed by the S&P 500 (+2.57%) and Nasdaq (+3.60%). Wall Street managed to rebound following the European markets after investor optimism would ease Russia-Ukraine geopolitical concerns after Ukrainian President Zelensky would hold discussions with Russia to be neutral. Investors' concerns over inflation eased after the fall in oil prices following the statement. Today, the market will be looking toward several data releases such as: 1) US Inflation Rate YoY; 2) US Jobless Claims; 3) Japan Foreign Bond Investment.
Domestic Update
• Indonesia's consumer confidence index (CCI) dropped 6.5 points to 113.1 in Feb-22 from 119.6 in the previous month, which was the highest reading in 2 years. MNCS Comment: CCI level in Feb-22 marked the lowest figure in five months, attributed to another wave of COVID-19 cases, with all of the six main sub-indices softening. However, the decline in consumer sentiment is still positive and CCI was consistently above 100 points since Oct-21 indicating that Indonesia's economy remains strong.
• Furthermore, the second dose of vaccination rate nationally has reached 71.5% or equivalent to 148.99 million people.
Company News
1. SMBR IJ recorded +1% YoY increase in sales volume and +2% YoY increase in revenue to IDR1.75 trillion in FY21. Meanwhile, net profit rose +372% YoY to IDR51.82 billion in FY21 (Kontan). MNCS Comment: We see that the significant growth in net profit is driven by a decrease in expense to IDR180.4 billion. The Company has the potential to increase its cement sales in FY22E along with the economic recovery which will encourage the growth of the construction sector. SMBR is trading at the level of 1.58x PBV.
2. ARNA IJ targets revenue growth of +8.2% YoY or IDR2.76 trillion in FY22E. Net profit is targeted to grow +30% YoY or IDR612 billion in FY22E (Bisnis Indonesia). MNCS Comment: We see that the company has the potential to achieve its target in FY22E through its expansion plan by increasing production at Plant 5C and Plant 4C. In addition, the company's net profit was recorded at IDR470.9 billion, up +45.78% YoY in FY21. ARNA is trading at the level of 13.33x/4.05x PER/PBV.
3. PPRE IJ obtained a new contract for the Empu Nala Road Improvement Work (PEN) in Mojokerto City, East Java, worth IDR101 billion. The acquisition of the new contract adds to the total achievement of new PPRE contracts to date of IDR 577.7 billion (IQ Plus). MNCS Comment: We see the company has the potential to improve its performance this year, in line with the economic recovery which will drive the construction sector growth in FY22E. PPRE is trading at the level of 21.86x/0.74x PER/PBV.
IHSG Updates
JCI rose +0.74% to 6,864.44 on Wednesday (09/03), followed by net foreign sell which reached IDR11.32 trillion. The majority of sectors driving the index were led by the property sector (+3.89%) followed by the transportation sector (+3.13%). On the other hand, the sector that experienced weakness was led by the basic materials sector (-1.04%) followed by the healthcare sector (-0.56%). Investors welcomed the truce made by Russia and Ukraine to evacuate civilians in their geopolitical crisis, which can certainly dampen the concerns of market participants. In addition, the possibility of continued strengthening of commodity and energy prices after the US officially imposed an embargo on oil and gas imports from Russia is suspected to be the catalyst for the strengthening of the index. On the other hand, the Rupiah weakened at IDR14,388/USD level. We estimate that the JCI will move in the range of 6,758-6,940 while waiting for Retail Sales YoY JAN data. Today’s recommendation: AKRA, MAPA, BBKP, ADHI.
Corporate Action
Cum Dividend: BBRI (IDR174.23/share)
IPO: NANO (IDR100/share), STAA (IDR600/share)
Disclaimer On
