MNCS Morning Navigator

11 Oktober 2021

MNCS Morning Navigator October 11, 2021

Global Market Highlights

DJIA weakened by -0.03% on Friday (08/10) followed by S&P 500 (-0.19%) and Nasdaq (-0.51%). Wall Street's ended lower after a US job data report showed that the US economy created the fewest jobs in nine months on September-21, with Non Farm Payrolls fell sharply to 194.000 from the previous data in the level of 366.000. Meanwhile, the US government released data on its Unemployment Rate in September-21 which fell to 4.8% from the previous data in the level of 5.2%. Today the market will be looking forward to several data releases such as: 1) US Bill Auction; 2) France BTF Auction; 3) Japan Machine Tool Orders YoY.

Domestic Update
• Bank Indonesia (BI) reported, consumer confidence index rose to 95.5 in September-21 from 77.3 in August-21. MNCS Comment: Improving consumer sentiment is in line with what we have expected, along with gradual reopening of the economy. Should the Covid-19 cases continue to decline and other epidemiologic indicators improve, we expect consumer confidence will likely to bounce back above 100.
• Furthermore, there was an addition of 140 new Covid-19 cases in Jakarta yesterday.

Company News
1. INDY IJ through company’s subsidiary PT Indika Energy Infrastructure (IEI) has completed the of 51% ownership stake in PT Mitrabahtera Segara Sejati Tbk (MBSS) to PT Galley Adhika Arnawama (GAA). Total transaction amounted to IDR589.05 billion (Market Bisnis). MNCS Comment: We see the divestment of MBSS shares owned by INDY as the company’s business diversification strategy to reduce exposure to the coal business and achieve the target of 50% revenue from the non-coal sector in FY25E. INDY is currently trading at level 32,47x/1,11x PER/PBV.
2. ANTM IJ collaborated with members of Indonesia Battery Corporation (IBC) are in the finalization acquisition process of an automotive company from Germany to build domestic electric vehicles. IBC will be the majority shareholder of the company with the technology and business adoption process expected to take 1-2 years (Trenasia). MNCS Comment: This acquisition plan is expected to accelerate the process of the domestic electric vehicle industry and positively affect IBC’s members, where IBC has intellectual property rights to develop the domestic electric vehicle industry and expand its market share globally. ANTM is trading at the level of 24,23x/2,83x PER/PBV.
3. HRUM IJ targets sales in FY21E at 3.5-4 million tons level, until 9M21 coal production and sales HRUM reached 2.5 million tons. Most of the production is exported to global markets (China, Thailand, Bangladesh, India, and Pakistan) (Kontan). MNCS Comment: We see the FY21E sales target can be achieved, driven by high coal demand amidst the energy crisis in China and Europe. Currently, HRUM is trading at level 70,4x/3,91x PER/PBV.

IHSG Updates
JCI rose by +1.02% to 6,481.77 on Friday (08/10) followed by net foreign buy reaching IDR2.42 trillion. JCI closed higher in almost all sectors, led by the transportation sector (+3.63%), followed by the industrial sector (+1.60%). On the other hand, the cyclical consumer sector weakened by -0.48%. The increase in JCI followed the increase in the majority of other global market indexes. From the domestic view, there are several sentiments that drive the increase of JCI index which is the tax policy that will be implemented starting in 2022, one of them is the tax amnesty policy and the second is the increase in the Consumer Confidence Index (IKK) to 95.5 on last September. On the other hand, the Rupiah weakened at IDR14,223 level on the spot market. We estimate the JCI will move in the range of 6,400-6,500. Today's recommendations: ASII, BBNI, MDKA, WTON.

Corporate Action
Cum Dividend Date: AALI (IDR102/share), AUTO (IDR11/share)
Public Expose: TPIA

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