MNCS Morning Navigator

29 November 2021

MNCS Morning Navigator November 29, 2021

Global Market Highlights
DJIA fell sharply by -2.53% on Friday (26/11) followed by S&P 500 (-2.27%) and Nasdaq (-2.23%). Wall Street plummeted due to the rising fear of the new and more infectious coronavirus strain detected in South Africa. Meanwhile, China’s industrial firms profits rose by +24.6% YoY on October-21 from the previous month at +16.3% YoY due to the government's efforts to ensure supply and stabilize prices. In addition, Japan’s Tokyo Core CPI rose to +0.3% YoY on November-21, its fastest pace in over a year, as electricity and fuel costs surged due to higher global energy prices. Today, the market will be looking toward several data releases such as: 1) Germany Inflation Rate YoY Prel; 2) Japan Retail Sales YoY; 3) Eurozone Consumer Confidence Final.


Domestic Update
Indonesia's GDP is expected to expand 4.7-5.5% in 2022 compared to 3.2-4.0% this year according to Bank Indonesia. MNCS Comment: Our forecast for Indonesia's output is inline with BI estimate, expecting the output to grow with the pace of 5.03% next year. The economic expansion is likely on the back of commodity prices to remain high as well as increasing domestic consumption and investment. However, the spread of the Omicron Covid-19 variant that is reported to have a more infectious feature is another downside risk for economic recovery.
Furthermore, the second dose of vaccination rate nationally has reached 45.0% or equivalent to 93.77 million people.


Company News
1. ISAT IJ will distribute an interim dividend of IDR920.14/share or IDR4.99 trillion for the 2021 book year period. The cum dividend date is on December 6, 2021 (Kontan). MNCS Comment: The payout ratio stood at 86.03% from the 9M21 profit of IDR5.8 trillion. Dividend yield reached 12.43%. ISAT is trading at the level of 5.20x/2.27x PER/PBV.

2. UNTR IJ successfully recorded growth in operational performance for all business lines throughout 10M21. As of 10M21, the sales of Komatsu as the core business managed to sell 2,590 units or rose by +92.56% YoY (vs 1,345 units in 10M20). Likewise, coal sales recorded 8.16 million tons in 10M21 or increased by +6.67% YoY (vs 7.65 million tons in 10M20) (Kontan). MNCS Comment: We see the UNTR’s operational performance was driven by the increase in commodity prices such as coal and nickel, thereby increasing Komatsu sales to the mining sector followed by increased economic activity and the relaxation of mobility restriction. Currently, UNTR is trading at level 7.80x/1.23x PER/PBV.

3. KRAS IJ through its subsidiary, PT Krakatau Sarana Properti (KSP) has collaborated on the digitization of industrial estates with PT Kawasan Industri Medan (Persero). The agreement made by KSP aims to seek opportunities for cooperation in the management and development of industrial estates outside Cilegon (Business Indonesia). MNCS Comment: We see that cooperation as a good opportunity to expand business networks in the future through direct collaboration with industrial estates throughout Indonesia. The KIM Investment Expo 2021 targets potential investment opportunities of IDR1 trillion from land use, factory construction, medical facilities and area digitization. KRAS trading at the level of 8.45x/1.16x PER/PBV.


IHSG Updates
JCI dropped by -2.06% to 6,561.55 on Friday (26/11) followed by net foreign sell reaching IDR145.74 billion. JCI closed lower in almost all sectors, led by the industrial sector (-3.61%), followed by the basic industrial sector (-2.81%). On the other hand, the health sector strengthened by +0.24%. The weakening of the JCI was driven by the profit taking action of a number of investors after the JCI reached its all time high and was caused by the lack of positive sentiment from domestic and global. Meanwhile, negative sentiment came from the emergence of a new variant of Covid-19 B.1.1.529 in South Africa, and a surge in daily Covid-19 cases in Germany to 76,132 new cases, which caused market concerns about a third wave. On the other hand, the Rupiah weakened at IDR14,303 level in the spot market. We estimate the JCI will move in the range of 6,480-6,600 while waiting for the released data of Motorbike sales YoY. Today's recommendations: MIKA, BIRD, INDY, BANK.


Corporate Action
Cum dividend date: UNVR (IDR66/share)
Cum right issue date: BINA (IDR4,200)


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