MNCS Morning Navigator

27 Oktober 2021

MNCS Morning Navigator October 27, 2021

Global Market Highlights

DJIA rose by +0.04% on Tuesday (26/10), followed by S&P 500 (+0.18%), and Nasdaq (+0.06%). Wall Street ended slightly higher due to great results of third quarter company earnings despite rising price pressures. Another positive sentiment is the US CB Consumer Confidence rose to 113.8 on October-21 from previously at 109.8 level on September-21. Meanwhile, the US House Price Index MoM fell to 1% in August-21 from the previous month at 1.4% level. Today the market will be looking forward to several data releases such as: 1) US Durable Goods Orders MoM; 2) UK Autumn Budget; 3) Germany GfK Consumer Confidence.

Domestic Update
• Government has successfully raised funding of IDR8 trillion from the Sovereign Debt Securities auction yesterday. MNCS Comment: Despite the lower indicative target set by the government, investors’ appetite towards sovereign debt securities remained high as reflected by the total incoming bids of IDR69.53tn. As we already expected that investors strongly demand for next year’s benchmark series (FR0090, FR0091, and FR0092) indicated by the total incoming bids through those series were equal to IDR49.4tn or equivalent to 71% of the total incoming bids.
• Furthermore, the second dose of vaccination rate nationally reaching 33% or equivalent to 68.68 million people.

Company News
1. UNTR IJ managed to sell 2,194 units of Komatsu or an increase of +84.21% YoY for 9M21 (vs 1,191 units in 9M20). On a monthly basis, UNTR recorded 304 sales units on September-21, a decrease of -6.7% MoM (vs 326 units in August-21). By year to date, UNTR recorded an all time high of Komatsu sales in 8M21 (Kontan). MNCS Comment: We see that UNTR has the potential to increase sales of Komatsu in the future, driven by increased economic activity in the mining sector, particularly coal and nickel, sales to the mining sector dominated 49% of total sales in 3Q21. UNTR is currently trading at level 10.12x/1.41x PER/PBV.
2. BJBR IJ posted IDR5.67 trillion net interest income (NII) in 3Q21 rose by +19.15% YoY, the numbers of growth supported by the spike in loan disbursement at IDR101.26 trillion, an increase of 6% YTD. BJBR’s recorded IDR1.41 trillion net profit in 3Q21 or an increase of +18% YoY (vs IDR1.2 trillion in 3Q20) (Trenasia). MNCS Comment: We see that economic conditions and mobility recovery have encouraged BJBR's performance growth. Meanwhile, BJBR maintains its NIM at 5.7% until FY21E. On the other hand, NPL fell -24 bps YoY at 1.3% level. BJBR is trading at the level of 7.63x/1.19x PER/PBV.
3. IRRA IJ recorded IDR1.09 trillion revenue in 9M21 or increased by +670.14% YoY (vs IDR141.06 billion in 9M20). COGS increased from IDR115.88 billion in 9M20 to IDR898.27 billion in 9M21. IRAA recorded IDR84.92 billion net profit in 9M21 or an increase of +840.59% YoY (vs net profit of IDR8.94 billion in 9M20) (CNBCIndonesia). MNCS Comment: IRRA's performance growth was driven by sales of laboratory products by PT Sinergi Utama Sejahtera worth IDR349.67 billion or contributed by 32% of total sales. IRRA targets sell around 5-10 million units or an increase of 100%-300% YoY for FY21E (vs 2.4 million units in FY20). Currently, IRRA is trading at level 26.00x/5.79x PER/PBV.

IHSG Updates
JCI strengthened by +0.47% to 6,656.94 on Tuesday (26/10) followed by net foreign buy reaching IDR772.91 billion. JCI closed higher in almost all sectors, led by the health sector (+2.69%), followed by the energy sector (+1.72%). On the other hand, the basic industrial sector weakened by -0.40%, followed by the technology sector (-0.25%). The strengthening of the JCI was driven by market optimism regarding the improvement of handling Covid-19 cases in Indonesia. Currently, the Covid-19 cases continued to decline to 460 cases on Monday. The increase in the JCI was in line with the increase in the majority of global indices and the strengthening of several commodities such as coal, gold, CPO and nickel. On the other hand, the Rupiah strengthened at IDR14,153 level in the spot market. We estimate the JCI will move in the range of 6,550-6,700. Today's recommendations: AGRO, SAME, FREN, ACES.

Corporate Action

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