MNCS Morning Navigator

17 Mei 2022

MNCS Morning Navigator May 17, 2022

Global Market Highlights
DJIA rose +0.08% on Monday (16/05), while the S&P 500 (-0.39%) and Nasdaq (-1.20%) strengthened. Wall Street closed mixed with the decline in US T-note 10Y yield to 2.88% became a positive catalyst. Meanwhile, investors are worried about the slowdown in global economic growth in line with the release of China's industrial production data on Apr-22 which fell -2.9% YoY. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM; 2) US Industrial Production YoY; 3) UK Unemployment Rate.

Domestic Update
Indonesia's exports are estimated to grow +34.97% YoY and imports to rise +35.97% YoY in Apr-22. Indonesia's trade balance is estimated to have a surplus of USD 3.25 billion. MNCS Comment: The trade balance is estimated to be lower than Mar-22 which reached USD4.53 billion in line with the implementation of the ban on exports of CPO and cooking oil raw materials which we estimate to have the potential to reduce the export value by USD1.8-2.2 billion per month.
Furthermore, the second dose of vaccination rate nationally has reached 79.8% or equivalent to 166.25 million people.

Company News
1. JSMR IJ recorded revenue of IIDR3.66 trillion or grew +5.03% YoY in 1Q22 (vs IDR3.49 trillion in 1Q21). Net profit increased by +142.71% YoY to IDR392.80 billion in 1Q22 (vs IDR161.83 billion in 1Q21) (Emitennews). MNCS Comment: The increase in top line was driven by the toll revenue which rose to IDR2.93 trillion in 1Q22. Meanwhile, COGS edged up +1.09% YoY to IDR1.85 trillion. NPM recorded an increase to 10% in 1Q22 (vs 5% in 1Q21). JSMR is currently trading at 17.23x/1.29x PER/PBV.
2. AKRA IJ is ready to escalate more cooperation with British Petroleum (BP) through procurement in the Gas Fuel (BBG) sector in FY23F, in the form of liquefied natural gas (LNG) in FY25F (Business Market). MNCS Comment: We view positively the efforts to diversify our business towards a more sustainable direction, along with the fossil fuel distribution business which still dominates revenue. The development of green fuel can be a driving force for the company's future performance in line with the trend of sustainable fuel demand. AKRA is currently trading at 11.78x/2.06x PER/PBV.
3. TRIN IJ plans to issue a Right Issue (RI) of 147.8 million new shares (equivalent to 3.09% of paid-in capital) accompanied by Series II Warrants, an exercise price of IDR900 and a target of obtaining funds of IDR133 billion (iqplus). MNCS Comment: The RI proceeds will be used for the acquisition of assets in the form of land in Labuan Bajo and Lampung, payment of long-term debts and the company's working capital. With the company's focus on the Lampung and Labuan Bajo projects in addition to other projects, it is hoped that it will increase the company's assets which have the potential to bring better financial performance in the future. TRIN is currently trading at 2.84x PBV levels.

IHSG Updates
JCI closed on Monday (16/05) commemorating Vesak Day, while on Friday (13/05) the JCI weakened -0.03% to 6,597.99, followed by net foreign sell which reached IDR2.94 trillion. Some sectors weakened and weighed on the index's pace, led by the technology sector (-3.81%) followed by the financial sector (-0.92%). On the other hand, the sector that experienced strengthening was led by the transportation sector (+2.10%) followed by energy (+2.10%). The performance of the index was underperformed with the majority of Asian bourses strengthening. Investors are watching the release of data on foreign exchange reserves (Cadev) which decreased by USD3.4 billion to USD135.7 billion. Furthermore, negative sentiment in the form of monetary tightening by the Fed still weighed on the JCI rate. On the other hand, the Rupiah exchange rate closed low at IDR14,613/USD. We estimate that the JCI will move in the price range of 6,544-6,700 while waiting for the release of Balance of Trade APR, Imports YoY APR, and Exports YoY APR data. Today’s recommendation: SMGR, CPIN, EXCL, MDKA.

Corporate Action
Cum Dividend: AKRA (IDR17/share), SDPC (IDR1/share), BSSR (IDR411.05/share)

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