Global Market Highlights
DJIA fell by -0.17% on Thursday (18/11), meanwhile S&P 500 rose by +0.34%, followed by Nasdaq (+0.45%). Wall Street ended mixed due to solid corporate earnings amidst rising inflation concerns. The US Continuing Jobless Claims declined to 2.08 million claims from the previous 2.21 million claims, reaching its lowest point since the start of the pandemic last year despite a tight job market. In addition, the US Philadelphia Fed Manufacturing Index surged significantly to its 7-month high at 39 in November-21 from previously at 23.8 as firms expect growth over the next six months despite rising inflation. Today the market will be looking toward several data releases such as: 1) Japan Inflation Rate YoY; 2) UK GFK Consumer Confidence; 3) UK Retail Sales YoY.
Domestic Update
• Indonesia's banking credit expanded by 3.24% YoY on Oct-21, higher than the previous month figure of 2.21% YoY. MNCS Comment: Indonesian banking credit expansion in Oct-21 was primarily driven by the supply-demand improvement in credit market along with gradual easing of social restrictions policy. Given the figure, we believe that the loan growth of 4%-6% target for FY21 is achievable.
• Furthermore, the second dose of vaccination rate nationally has reached 41.4% or equivalent to 86.32 million people.
Company News
1. SSMS IJ recorded IDR3.69 trillion net sales in 9M21 increased by +34.69% YoY (vs IDR2.74 trillion in 9M20). COGS increased from IDR1.47 trillion in 9M20 to IDR2.13 trillion in 9M21. SSMS recorded IDR1.03 trillion net profit in 9M21 or rose by +287.93% YoY (vs net profit of IDR264.98 billion in 9M20) (Emitennews). MNCS Comment: SSMS’s increasing top line and bottom line were driven by an increase in sales of CPO to related parties reaching IDR3.2 trillion or up to +34.91% YoY. Interest income rose significantly +127.69% YoY. On the one hand, the company successfully managed the selling expenses and general expenses which only rose by +5.14% YoY and +0.65% YoY, respectively. This positive performance record was driven by the increase in CPO prices, where the company ASP CPO reached IDR8.67 million/ton in 9M21 (vs IDR7.70 million/ton in 9M20). SSMS is trading at the level of 8.20x/2.00 PER/PBV.
2. KRAS IJ recorded IDR26.50 trillion net sales in 10M21 increased by +73.19% YoY (vs IDR15.30 trillion in 9M20). Until October-2021, KRAS recorded IDR1.05 trillion net profit. On the one hand, the company managed to reduce variable costs and fixed costs by 10% YoY and 8% YoY, respectively (CNBC Indonesia). MNCS Comment: We see that the increase in the bottom line was driven by an increase in sales and the company productivity. KRAS production rate up to October-2021 rose by +35% YoY to 1.63 million tons. Subsequently, the improved and consistent performance of KRAS shows the success of the management in restructuring and transforming the company. Currently, KRAS is trading at level 8.82x/1.22x PER/PBV.
3. MEDC IJ has realized capex up to 1H21 of USD28 million or equivalent to 6.51% of the company FY21E target of USD215 million, with details for oil and gas USD150 million and electricity USD65 million. As of 1H21, Capex is allocated for oil and gas for USD14 million, and the other half or USD14 million for electricity (Market Business). MNCS Comment: The company capex absorption is below the allocation for FY21E, where the company seeks efficient spending amidst activity restrictions during Covid-19. However, MEDC is optimistic that the capex absorption will be higher in 2H21 followed by various programs according to FY21E guidance. MEDC trading at the level of 9.70x/0.84x PER/PBV.
IHSG Updates
JCI weakened by -0.59% to 6,636.47 on Thursday (18/11) followed by net foreign sales that reached IDR417.93 billion. JCI closed lower, with the weakened sector led by the financial sector (-0.93%), followed by the infrastructure sector (-0.82%). On the other hand, the cyclical consumer sector was strengthened by +0.36%, followed by the non-cyclical consumer sector and the health sector (+0.16%). The weakening of the JCI was driven by the weakening that also occurred in the global stock market today. Meanwhile, investors are still worried about rising inflation which could lead to an increase in interest rates and its significant impact on the global financial markets, including Indonesia. On the other hand, the Rupiah strengthened at IDR14,228 level in the spot market. We estimate the JCI will move in the range of 6,610-6,680. Today's recommendations: HRTA, IMJS, PNBS, FREN.
Corporate Action
RUPS: FILM, TRIN, TELE
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