Global Market Highlights
Wall Street closed on Monday (30/05) commemorating Memorial Day, while the European markets closed higher amid predictions of German inflation (prelude) to grow +7.9% YoY in May-22 (+7.4% YoY in Apr-22) . In Wall Street, investors will continue to observe the release of the company's 1Q22 financial report. Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence; 2) Germany Unemployment Rate; 3) France Inflation Rate YoY Prel.
Domestic Update
• The government will conduct an auction of 6 series SBSN (SPN-S 15112022, PBS031, PBS032, PBS030, PBS029, PBS033) with an indicative target of IDR6 trillion on 31 May 2022. MNCS Comment: The yield trend has started to decline and market participants' appetite for fixed income instruments has begun to recover. We expect that this SBSN auction will be better than the previous auction.
• Furthermore, the second dose of vaccination rate nationally has reached 80.3% or equivalent to 167.33 million people.
Company News
1. TINS IJ will distribute cash dividends of IDR455.97 billion or equivalent to IDR61.22 per share, making payout ratio to be 35% (Kontan). MNCS Comment: Therefore, TINS will offer a dividend yield of 3.4% in FY21. Currently, TINS is trading at 5.60x/1.92x PER/PBV levels.
2. AMRT IJ prepared a capex of IDR3.4-3.5 trillion to increase the number of outlets by 800-1,000 units, extend the rental period for outlet locations, purchase land and add new warehouses, with the focus of expansion centered outside Java. As of 1Q22, the company has opened 317 new outlets with realized capex of IDR800 billion (issuer news) (CNBC Indonesia). MNCS Comment: Hence, by 1Q22, the total outlets owned by the company and its subsidiaries reached 19,127 units and have the potential to continue to grow to 19,610-19,810 units. Thus, expansion space is still wide open with new capex absorption of around 23%-24% of the target. AMRT is currently trading at 35.97x/7.98x PER/PBV.
3. BRMS IJ recorded positive performance in 1Q22 with revenue growth reaching +118% YoY and net profit +14% YoY (Investor ID). MNCS Comment: Revenue growth was supported by the increase in gold production volume at Citra Palu Minerals to 41 Kg (vs 24 Kg in 1Q21), followed by 30% OPM and 62% NPM. It is hoped that after the completion of the construction of a new gold ore processing plant and the exploration of gold reserves, it will able to support the company’s performance in the future. Currently, BRMS is trading at 301.07x/1.86x PER/PBV levels.
IHSG Updates
JCI rose +0.16% to 7,037.56 on Monday (30/05), followed by net foreign buys which reached IDR7.17 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+3.94%) followed by the raw materials sector (+1.19%). On the other hand, the weak sector was led by the health sector (-0.94%) followed by the cyclical sector (-0.09%). The index gains were in line with Wall Street and Asian bourses. Investors welcomed the government's plan to allocate 1 million tons of CPO exports positively which is expected to strengthen Indonesia's Trade Balance. On the other hand, the Rupiah exchange rate closed higher at IDR14,558/USD. We estimate that the JCI will move in the price range of 6,800-7,120. Today’s recommendation: ASII, INCO, ISSP, WOOD.
Corporate Action
Cum Dividend: RALS (IDR30/share), NRCA (IDR15/share)
Cum Stock Split: HRUM (1:5)
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