Global Market Highlights
DJIA fell by -0.74% on Wednesday (27/10), followed by S&P 500 (-0.51%) while Nasdaq ended flat. Wall Street ended lower as rising inflation remains the key concern for investors while monitoring the impact of supply chain problems and higher prices towards businesses and consumers. In addition, the US Durable Goods Orders MoM fell to -0.4% in September-21 from previously at 1.3% level in August-21 due to higher material costs and labor shortages. On the other hand, The Bank of Canada has decided to maintain its benchmark interest rate at 0.25%. Today the market will be looking forward to several data releases such as: 1) US GDP Growth Rate QoQ Adv; 2) Germany Inflation Rate YoY Prel; 3) Eurozone ECB Interest Rate Decision.
Domestic Update
• As of Sep-21 credit in Indonesia grew by +3.2% and expected to reach 4%-5% this year. Bank's NPL was at 3.22% and restructured loans value decreased to IDR738.6 trillion according to OJK. MNCS Comment: Overall, credit conditions in Indonesia keep improving. We believe that lower NPL and restructured loans values, followed by lower provisioning will improve banking profitability.
• Furthermore, the second dose of vaccination rate nationally reaching 33.4% or equivalent to 69.46 million people.
Company News
1. BBRI IJ posted IDR71.69 trillion net interest income (NII) for 9M21 or up +27.90% YoY (vs IDR56.05 trillion in 9M20). The growth was supported by the increase in credit disbursement reaching IDR1,026 trillion for 9M21 or grew +9.74% YoY. BBRI's net profit was recorded at IDR19.26 trillion in 9M21 or an increase of +36.40% YoY (vs IDR14.12 trillion in 9M20) (Emitennews). MNCS Comment: We see BBRI's credit outstanding was above the national banking industry's credit growth of 2.21%. This was supported by lending to MSMEs which recorded a growth of +12.5% to IDR848.6 trillion. We estimate that BBRI should benefit from a higher customer base due to the synergies with Pegadaian and PNM. BBRI is currently trading at level 21.21x/2.69x PER/PBV.
2. AKRA IJ recorded IDR17.24 trillion revenue in 9M21 or an increase of +24% YoY (vs IDR13.86 trillion in 9M20). COGS increased from IDR12.39 trillion in 9M20 to IDR15.67 trillion in 9M21. AKRA recorded IDR796.98 billion net profit in 9M21, rose by +19.69% YoY (vs net profit of IDR665.41 billion in 9M20) (Trenasia). MNCS Comment: AKRA's performance growth was driven by the acquisition of contracts with customers, amounting to IDR17.07 trillion which increased by +24.60% YoY. In addition, lower operating expenses of -4.89% YoY to IDR491.64 billion boosting up the bottom line. AKRA is trading at the level of 16.85x/1.98x PER/PBV.
3. DMAS IJ recorded IDR1.31 trillion revenue in 9M21, an increase of +99.58% YoY (vs IDR654.99 billion in 9M20). COGS increased from IDR228.01 billion in 9M20 to IDR567.55 billion in 9M21. DMAS recorded a net profit reaching IDR634.64 billion in 9M21 or up +109.3% YoY (vs net profit of IDR302.45 billion in 9M20) (Kontan). MNCS Comment: DMAS’s performance growth was driven by the industrial land sales of IDR1.14 trillion or rose by +112.62% YoY. On the other hand, housing sales grew by +206.18% YoY. The extension of the 0% down payment (DP) of KPR until FY22E is projected to increase property sales. Currently, DMAS is trading at level 12.87x/1.87x PER/PBV.
IHSG Updates
JCI weakened by -0.82% to 6,602.21 on Wednesday (27/10) followed by net foreign buy reaching IDR223.92 billion. JCI closed lower in almost all sectors led by the non-cyclical consumer sector (-1.39%), followed by the financial sector (-1.23%). On the other hand, the cyclical consumer sector strengthened by +0.92%, followed by the health sector (+0.58%). The weakening of the JCI was driven by negative sentiment from the increasing number of property companies from China that were having difficulty paying their obligations, namely Modern Land, thus raising concerns about the wider impact of the debt crisis. On the other hand, the Rupiah weakened towards the level of IDR14,172 in the spot market. We estimate the JCI will move in the range of 6,550-6,640. Today's recommendations: ANTM, AUTO, ELSA, CTRA.
Corporate Action
Dividen: KINO (IDR12/share)
RUPS: PEGE, MDRN
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