MNCS Morning Navigator

17 November 2021

MNCS Morning Navigator November 17, 2021

Global Market Highlights

DJIA grew by +0.15% on Tuesday (16/11) followed by S&P 500 (+0.39%) and Nasdaq (+0.76%). Wall Street ended higher due to positive retail sales and manufacturing data. The US retail sales went up by +1.7% MoM on October-21 from the previous at +0.8% MoM along with people started their holiday shopping early to avoid empty shelves amid supply chain concerns. Meanwhile, The UK Unemployment Rate fell to 4.3% on September-21 from previously at 4.5% as businesses started to recruit after the removal of Covid-19 restrictions. Today the market will be looking forward to several data releases such as: 1) US Building Permits MoM; 2) UK Inflation Rate YoY; 3) Eurozone Core Inflation Rate YoY Final.

Domestic Update
• As of Sep-21, bank deposits reached IDR7,244 trillion according to the Deposit Insurance Agency (LPS). Time Deposit still dominated banking third party funds which accounted for 39.45% and followed by savings and current accounts, which contributed 31.73% and 27.92%, respectively. MNCS Comment: Despite the structure of TPF in Indonesia's banking system remained dominated by TD, the growth in saving accounts combined with significantly lower TD rates helped CoF to lower even amid the declining loan yield. We expect with this trend, banking NIM to improve in 4Q21.
• Furthermore, the second dose of vaccination rate nationally has reached 40.8% or equivalent to 84.87 million people.

Company News
1. CTRA IJ recorded IDR6.65 trillion revenue in 9M21 increased by +56.81% YoY (vs IDR4.24 trillion in 9M20). COGS increased from IDR2.33 trillion in 9M20 to IDR3.35 trillion in 9M21. CTRA recorded IDR1.01 trillion net profit in 9M21 or rose by +336.96% YoY (vs net profit of IDR232.18 billion in 9M20) (Kontan). MNCS Comment: CTRA’s increasing top line and bottom line were driven by an increase in sales of residential houses to IDR3.35 trillion or up to +38.72% YoY. Meanwhile, sales of offices and land lots also grew by +158.18% YoY and +158.77% YoY, respectively. On the other hand, CTRA managed to reduce general and administrative expenses to IDR890.97 billion (-2.18% YoY). The extension of 0% down payment of mortgage for up to FY22E is projected to increase CTRA’s sales in the future. CTRA is trading at the level of 15.64 x/1.30x PER/PBV.
2. SAMF IJ realize capex through its subsidiary PT Dupan Anugerah Lestari to increase factory capacity from 600,000 tons/year to 700,000 tons/year in anticipation of the rising demand for fertilizers (Market Business). MNCS Comment: We see that the factory capacity increase was carried out in line with the trend of rising palm oil prices since mid-2021 which was caused by the increased demand for fertilizer, reflected in SAMF sales to IDR1.25 trillion in 9M21 or up +25.50% YoY (vs IDR994.89 billion in 9M20). Currently, SAMF is trading at level 47.41x/7.86x PER/PBV.
3. CSRA IJ will distribute an interim dividend of IDR25/share or IDR51.25 billion for the 2021 book year period. The cum dividend date is on November 24, 2021 (Kontan). MNCS Comment: The payout ratio stood at 61.71% from the 1H21 profit of IDR83.05 billion. Dividend yield reached 4.81%. CSRA is trading at the level of 4.47x/1.42x PER/PBV.

IHSG Updates
JCI strengthened by +0.53% to 6,651.21 on Tuesday (16/11) followed by net foreign sell reaching IDR349.01 billion. JCI closed higher in almost all sectors, led by the basic materials sector (+0.93%), followed by the financial sector (+0.82%). On the other hand, the technology sector weakened by -0.51%, followed by the non-cyclical consumer sector (-0.17%). The strengthening of the JCI was driven by market optimism regarding the development of handling Covid-19 cases in Indonesia, which continued to improve. Yesterday, there were 221 additional Covid-19 cases, which is the lowest since April 6, 2020. On the other hand, the Rupiah strengthened at IDR14,222 level in the spot market. We estimate the JCI will move in the range of 6,630-6,680 while waiting for the current account 3Q21 data release. Today's recommendations: AUTO, CENT, SRTG, BBYB.

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