MNCS Morning Navigator

13 Mei 2022

MNCS Morning Navigator May 13, 2022

Global Market Highlights
DJIA weakened -0.33% on Thursday (12/05), followed by S&P 500 (-0.13%) which weakened while Nasdaq (+0.06%) strengthened. Wall Street continues its correction in line with negative sentiments in the form of: 1) increase in producer price index (+0.5% MoM/+11% YoY); 2) Initial jobless claims as of 7-May increased to 203,000 (vs 195,000 by consensus). Today, the market will be looking toward several data releases such as: 1) US Michigan Consumer Sentiment Prel; 2) US Import Prices YoY; 3) France Inflation Rate YoY.

Domestic Update
Indonesia's foreign exchange reserves are estimated to decline to USD 138 billion in April-22. MNCS Comment: The decline in Indonesia's foreign exchange reserves is estimated to be influenced by several factors including government foreign debt.
Furthermore, the second dose of vaccination rate nationally has reached 79.7% or equivalent to 165.97 million people.

Company News
1. ASII IJ prepared capex of IDR20 trillion in FY22E, or this figure is almost at pre-pandemic levels (vs IDR21 trillion in FY19). Until 1Q22, the company has used capex of IDR3.8 trillion (Bisnis Indonesia). MNCS Comment: Approximately 60% of capex funds are allocated for the mining heavy equipment business line. The rest is followed by infrastructure, logistics, and other business lines. We consider the strategy to increase the number of mining heavy equipment in line with the increase in commodity prices to be a good call. Where the demand is still high, it has the potential to improve the company's performance in FY22E. Currently, ASII is trading at the level of 10.11x/1.55x PER/PBV.
2. HRUM IJ recorded a net revenue of USD152.18 million in 1Q22 or up +166.60% YoY (vs USD57.08 million in 1Q21). Net profit increased significantly +255.05% YoY to USD62.81 million in 1Q22 (vs USD17.69 in 1Q21) (CNBC Indonesia). MNCS Comment: The largest revenue came from coal exports which reached USD149.39 million in 1Q22 or up +178% YoY. COGS also increased +80.46% YoY to reach USD55.26 million in 1Q22. Thereby, making the company's NPM to increase to 41% in 1Q22 (vs. 31% in 1Q21). Currently, HRUM is trading at the level of 7.50x/3.44x PER/PBV.
3. LPKR IJ recorded revenue of IDR3.34 trillion in 1Q22 or down -12.08% YoY (vs IDR3.79 trillion in 1Q21). The company posted a net loss of IDR 567.55 billion in 1Q22 (vs net profit of IDR 255.85 billion in 1Q21) (Bisnis Indonesia). MNCS Comment: LPKR's top line decline was due to the real estate segment's revenue which fell -13.97% YoY to IDR864.87 billion in 1Q22, followed by the healthcare segment -3.35% YoY to IDR2.22 trillion in 1Q22. On the other hand, COGS and operating expenses that are still quite large become the cause of the decline in LPKR's performance, where COGS was recorded at IDR1.96 trillion in 1Q22, down -9.27% ​​YoY, while operating expenses amounted to IDR1.09 trillion which only slightly decreased -3% YoY. Currently, LPKR is trading at 0.44x PBV levels.

IHSG Updates
JCI weakened -3.17% to 6,599.84 on Thursday (12/05), followed by net foreign sell which reached IDR722.56 billion. All sectors weakened and weighed on the index, led by the technology sector (-4.65%) followed by the raw materials sector (-3.31%). The index continued its correction amid the release of Mar-22 retail sales data which increased to 205.3 (+2.6% MoM/+9.3% YoY). The negative catalyst came from the release of US inflation rate data on Apr-22 which grew +8.3% YoY (vs. +8.1% YoY on the consensus) thus making the market participants worried about the Fed's more aggressive monetary tightening. On the other hand, the Rupiah exchange rate closed low at IDR14,597/USD. We estimate that the JCI will move in the price range of 6,544-6,700 while waiting for the release of Foreign Exchange Reserves APR data. Today’s recommendation: UNVR, ASRI, ISAT, TINS.

Corporate Action
Cum Dividend: TRIS (IDR1.75/share), ADRO (USD0.0094/share)
Cum Rights: JAST (IDR150/share)

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