MNCS Morning Navigator

16 November 2021

MNCS Morning Navigator November 16, 2021

Global Market Highlights

DJIA slightly fell by -0.04% on Monday (15/11) followed by Nasdaq (-0.04%) while S&P 500 closed flat. Wall Street ended mostly flat as investors are still waiting for earning reports from major retail companies amidst inflation pressures. Meanwhile, Japan’s GDP Growth Annualized Prel contracted by -3% YoY in 3Q21 from previously expanded by 1.5% YoY due to global supply disruptions and rising Covid-19 cases hit business and consumer spending. On the other hand, China’s Industrial Production has gone better than expected, increasing to +3.5% YoY on October-21 from the previous at +3.1% YoY as the impact of the easing of energy shortages and the decline of extreme weather events. Today the market will be looking forward to several data releases such as: 1) US Retail Sales MoM; 2) UK Employment Change; 3) Eurozone GDP Growth Rate YoY 2nd Est.

Domestic Update
• Bank Indonesia (BI) reported Indonesia's external debt position at the end of 3Q21 grew by +3.7% YoY to USD423.1 billion. Such development was primarily driven by the accelerated growth of the public sector and private external debt. MNCS Comment: Overall, Indonesia's external debt position stood at 37% GDP lower than 37.5% in the previous quarter. In addition Indonesia's external debt structure was still dominated by long-term debt with 88.2% share of total external debt. We expect for the short term risk to remain minimum given : 1) the stability of Rupiah and 2) low interest rates and yield.
• Furthermore, the second dose of vaccination rate nationally has reached 40.4% or equivalent to 84.19 million people.

Company News
1. BGTG IJ will conduct a right issue by issuing 5.59 billion shares with a nominal value of IDR100/share. The EGMS is planned to be held on December 22, 2021 (Kontan). MNCS Comment: We see that from this right issue is planned to strengthen the capital structure in order to fulfill the minimum capital of IDR2 trillion and working capital for the company’s business development through lending. BGTG is trading at the level of 325.88x/2.33x PER/PBV.
2. HKMU IJ recorded IDR323.16 billion revenue in 9M21 decreased by -49.90% YoY (vs IDR645.09 billion in 9M20). COGS decreased from IDR591.30 billion in 9M20 to IDR279.77 billion in 9M21. HKMU recorded IDR12.13 billion net loss in 9M21 (vs net loss of IDR66.68 billion in 9M20) (Market Bisnis). MNCS Comment: HKMU’s top line and bottom line decreased, driven by the second wave of Covid-19 in July and August, which hampered the recovery process. On the other hand, HKMU successfully managed to reduce the general and administrative expenses (-25.86% YoY), funding expenses (-64.23% YoY) and other expenses (-76.14% YoY). Currently, HKMU is trading at level 0.37x PBV.
3. DOID IJ recorded USD596.74 million revenue in 9M21 increased by +20.76% YoY (vs USD494.18 million in 9M20). COGS increased from USD431.59 million in 9M20 to USD515.67 million in 9M21. DOID recorded USD16.10 million net loss in 9M21 (vs net loss of USD3.69 million in 9M20) (Emitennews). MNCS Comment: The main contributor of DOID’s top line was obtained by revenue through PT Berau Coal recorded at USD296.25 million in 9M21 or grew by +24.82% YoY (vs USD237.35 million in 9M20). Meanwhile, the bottom line experienced significant losses due to increased operating expenses (+79.34% YoY) and financial expenses (+22.89% YoY). Currently, DOID is trading at level 0.75x PBV.

IHSG Updates
JCI weakened by -0.53% to 6,615.03 on Monday (15/11) followed by net foreign sell reaching IDR678.61 billion. JCI closed lower, with the weakening led by the energy sector (-2.04%), followed by the infrastructure sector (-1.13%). On the other hand, the tech sector strengthened by +0.58%, followed by the consumer cyclical sector (+0.36%). The weakening of the JCI was still driven by profit-taking by a number of investors, with the US and Chinese inflationary sentiments still a concern for investors. Meanwhile, Indonesia managed to record a trade balance surplus of USD5.73 billion in October-21 with exports growing 53.35% YoY and imports increasing 51.06% YoY. On the other hand, the Rupiah strengthened at IDR14,213 level in the spot market. We estimate the JCI will move in the range of 6,600-6,650. Today's recommendations: SSMS, AKRA, BANK, KLBF.

Corporate Action
Cum dividend date: BBCA (IDR25/share)
Cum Right Issue Date: BBKP (IDR200/share)

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