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MNCS Morning Navigator

07 Oktober 2021

MNCS Morning Navigator October 07, 2021

Global Market Highlights

DJIA rose by +0.30% on Wednesday (06/10) followed by S&P 500 (+0.41%) and Nasdaq (+0.47%). Wall Street's rebound was driven by the market optimism after a short-term suspension of the US debt ceiling was offered to avert government debt default. While the UK government released data on its Construction PMI on September-21 which fell to 52.6 from the previous at 55.2 level in August-21. On the other hand, the US Government released data on its MBA Mortgage Applications for the week ending 01 October-21 which fell by -6.9% from the previous -1.1% due to high rates and high house prices. Today the market will be looking forward to several data releases such as: 1) US Initial and Continuing Jobless Claims; 2) Eurozone ECB Monetary Policy Meeting Accounts; 3) France Balance of Trade.

Domestic Update
• Ministry of Energy & Mineral Resources (MEMR) set Indonesia's Coal Reference Price at USD161.63/MT for October-21. Domestic reference coal price increased by USD11.6/MT or equivalent to 7.2% from the previous month. MNCS Comment: Soaring domestic coal price is driven by rising demand in China, India, South Korea and Europe due to declining the stockpiles and surging gas price. The uptrend in the reference coal price is aligned with the global benchmark that hit above USD250/MT for Newcastle thermal coal.
• Furthermore, there was an addition of 203 new Covid-19 cases in Jakarta yesterday.

Company News
1. WSKT IJ obtained a new contract project for the Loji-Banger river flood control package I in Pekalongan, Central Java, which is planned to be completed in FY23E. The contract value reaching IDR460 billion. On the other hand, WSKT has succeeded in divesting the Cibitung-Cilincing toll road segment to PT Akses Pelabuhan Indonesia (API) amounted to IDR2,67 trillion (Emitennews). MNCS Comment: We believe that the company's toll road divestment aimed to restore WSKT’s cash flow which has been quite depressed due to the pandemic. Meanwhile, the new contract is expected to support WSKT’s upcoming performance. WSKT is currently trading at level 44.25x/1.75x PER/PBV.
2. DMAS IJ accomplish IDR1.25 trillion marketing sales in 9M21, equivalent to 62.4% from FY21E marketing sales target of IDR2 trillion. The company managed to sell around 55.3 hectares of industrial land up to 9M21 (Kontan). MNCS Comment: We see that DMAS performance is driven by the incentive sentiment in the property sector such as 0% down payment (DP) and Value Added Tax (VAT) subsidies. Currently, DMAS is trading at level 17.20x/1.82x PER/PBV.
3. INDY IJ through PT Indika Mineral Investindo (IMI) as one of INDY’s subsidiaries officially completed the acquisition of 100% shares owned by Nusantara Resource Limited, a gold mine manager in South Sulawesi. Where previously WSKT had a 28% ownership share. The total transaction amounted to AUD58.8 million (CNBC Indonesia). MNCS Comment: We see from the completion of the acquisition of 100% NUS shares, INDY’s business diversification will expand in the gold mining sector. Where INDY targets 50% of revenue contributed from non-coal by 2025. INDY is trading at the level of 32.32x/1.11x PER/PBV.

IHSG Updates
JCI rose by +2.06% to 6,417.32 on Wednesday (06/10) followed by net foreign buy reaching IDR4.82 trillion. JCI closed higher in almost all sectors, led by the industrial sector (+3.28%), followed by the financial sector (+2.59%). On the other hand, the property sector weakened by -0.21%. JCI ended higher supported by the increase of the Wall Street last night trading, followed by massive buying action from foreign investors and the continuation spike of the several energy commodity prices. On the other hand, the Rupiah was stagnant at IDR14,253 level in the spot market. We estimate the JCI will move in the range of 6,340-6,460 while waiting for foreign exchange reserve data release. Today's recommendations: IMJS, MAPI, ICBP, TKIM.

Corporate Action
Cum date dividend: ASII (IDR335/share), EAST (IDR0.75/share)
Right Issue: BAJA (IDR500/share)

Disclaimer On

IMJS MAPI ICBP TKIM WSKT DMAS INDY

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