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MNCS Morning Navigator

15 September 2021

MNCS Morning Navigator September 15, 2021

Global Market Highlight

DJIA fell by -0.84% on Tuesday (14/09) followed by S&P 500 (-0.57%), and Nasdaq (-0.45%). Wall Street closed lower due to economic uncertainty and rising corporate tax rates. The long-discussed increase in corporate tax was 26.5% from 21%. Subsequently, market participants await the results of Joe Biden's budget package approval worth USD3.5 trillion. Today the market will be looking forward to several data releases such as: 1) US MBA Mortgage Applications; 2) Canada Inflation Rate YoY; 3) UK Inflation Rate YoY.

Domestic Update
• Statistics Indonesia is set to announce August-21 international trade performance in Indonesia. MNCS Comment: We forecast Indonesia’s exports are expected to grow +37.57% YoY while imports grew +42.80% YoY marking a surplus in trade balance of USD2.62bn. Rising both Indonesia's exports and imports performance were primarily driven by global economic recovery, surging commodity price and low base effect.
• Furthermore, there was an addition of 190 new Covid-19 cases in Jakarta yesterday.

Company News
1. TLKM IJ is building a hyperscale data center with 75 MW capacities in stages. TLKM has a target installed capacity by the end of FY21E to reach 25 MW. The total development cost reached USD525 - USD675 million (Bisnis Indonesia). MNCS Comment: We see that with the support of data centers spread across many locations, makes TLKM more prepared to present 5G connection, it becomes the company's competitive advantage to improve the performance this year. Currently TLKM is trading at 13.68x/3.46x PE/PBV levels.
2. TOWR IJ will acquire 90% of PT Solusi Tunas Pratama Tbk (SUPR) total paid-up and placed capital to develop and expand their business in the network segment. After the acquisition, the number of TOWR telecommunication towers will increase to approximately 28,000 units (Kontan). MNCS Comment: This acquisition of ownership is able to expand TOWR's business network and strengthen its position as an independent tower operator serving the telecommunications sector in Indonesia. Funding for the acquisition was sourced from TOWR's internal cash and bank loans. Currently TOWR is trading at 20.38x/6.51x PE/PBV levels.
3. BBHI IJ has received approval from OJK for digital bank service products and the company's digital onboarding application, namely Allo Apps. To be included in KBMI 2, BBHI plans to conduct a rights issue by issuing a maximum of 11 billion shares with a nominal value of IDR100/share (CNBC Indonesia). MNCS Comment: We see this is BBHI's step to improve customer service efficiency as well as develop business scale. This digitalization is expected to increase the company's performance growth. BBHI is currently trading at 339.45x/43.97x PE/PBV.

IHSG Updates
JCI rose by +0.67% to 6,129.10 on Tuesday (14/09) followed by net foreign buy reaching IDR401.40 billion. JCI closed higher in almost all sectors, led by the energy sector (+2.16%), followed by the infrastructure sector (+2.09%). Meanwhile, the basic materials sector slightly weakened by -0.10%. The strengthening of the JCI was supported by the well maintained daily Covid-19 case in Indonesia, with daily transmission cases less than 6000 cases, as well as gradual easing made the index strengthen in today's trading. On the other hand, the Rupiah strengthened at IDR14,248/USD level on the spot market. We estimate the JCI will move in the range of 6,020-6,150 while waiting for the balance of trade data release. Today's recommendation: SRTG, MDKA, PGAS, APLN.

Corporate Action
Public Expose: ARKA, BBSS

Disclaimer On

SRTG MDKA PGAS APLN TLKM TOWR BBHI

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