Global Market Highlight
DJIA rose by +0.61% on Wednesday (30/06) followed by S&P 500 (+0.13%), while Nasdaq slipped by -0.17%. The Wall Street closing mixed with investor optimism that the overall market will continue to grind higher in the second half of the year with greater corporate productivity expected to push earnings higher. The market will look forward to several data releases today, such as: 1) US Markit Manufacturing PMI Final; 2) Germany Markit Manufacturing PMI Final; 3) Euro Area Unemployment Rate
Domestic Update
• Indonesia's PMI manufacturing index still recorded an expansion with 53.5 points in June. However the latest figure was lower than the previous month at 55.3 points. MNCS comment: The three straight months record of expansion supported the idea of a positive GDP growth for 2Q21. However the implementation of emergency social restriction (PPKM Darurat) in early July brings a downside risk for manufacturing activity in this month.
• The Indonesia Bureau of Statistics will announce the inflation rate figure for June today at 11:00 AM. Consensus estimate for CPI was 1.41% YoY slightly higher than the central bank forecast 1.38% YoY. MNCS comment: In our view, a deflation on a monthly basis was justified due to lowering of food staple prices indicating a cyclicality phenomenon post Ramadan and Lebaran. We believe the inflation figure will remain benign until the end of this year. We foresee average inflation will be 2.35% YoY. In addition rising Covid-19 cases & implementation of PPKM will affect public mobility hence also affecting price movement.
• Furthermore, there was an addition of 7,680 new Covid-19 cases in Jakarta yesterday.
Company News
1. INDF IJ posted net sales of IDR24.55 trillion in 1Q21, up +27.2% YoY (vs IDR19.30 trillion in 1Q20). COGS also increased from IDR13.02 trillion in 1Q20 to IDR16.03 trillion in 1Q21. INDF posted a net profit of IDR1.73 trillion in 1Q21 which was up +23.16% YoY (vs IDR1.40 trillion in 1Q20) (CNBC Indonesia). MNCS Comment: INDF's performance slightly above our expectations with net profit reflecting 26% of the FY21E target. We believe that the performance of all segments, including the packaging product, Bogasari and agribusiness segments, will remain solid throughout FY21E. Currently INDF is trading at 7.84x/1.22x PE/PBV levels.
2. ICBP IJ recorded net sales of IDR15.09 trillion in 1Q21, up +25.7% YoY (vs IDR12.01 trillion in 1Q20). COGS also increased from IDR7.82 trillion in 1Q20 to IDR9.22 trillion in 1Q21. ICBP posted a net profit of IDR1.74 trillion in 1Q21 which was down -12.41% YoY (vs IDR1.98 trillion in 1Q20) (Bisnis Indonesia). MNCS Comment: The performance is in line with our projections with net profit reflecting 24.8% of the FY21E target. The increase in financial costs to the level of Rp1.24 trillion suppressed the bottom-line. Currently ICBP is trading at 13.68x/3.01x PE/PBV levels.
3. IPCM IJ posted total revenue of IDR184.51 billion in 1Q21, up +0.2% YoY (vs IDR184.10 billion in 1Q20). COGS increased from IDR118.32 billion in 1Q20 to IDR119.04 billion in 1Q21. IPCM posted a net profit of IDR33.01 billion in 1Q21 which was up +2.04% YoY (vs IDR32.35 billion in 1Q20) (Emitennews). MNCS Comment: The lack of shipping activity lead IPCM's performance to be slightly narrow. However, IPCM is still able to maintain its financial stability until 1Q21. Currently IPCM is trading at 11.21x/1.32x PE/PBV levels.
IHSG Updates
JCI rose by +0.61% to 5,985.49 on Wednesday (30/06) while net foreign sell reaching IDR472.30 billion. JCI closing was higher along with most sectors, technology (+1.05%), followed by cyclical (+1.10%), and finance (+1.02%). On the other hand, non-cyclical slipped by -0.31%. JCI closing was higher in line with the Wall Street closing yesterday. We see that the market will tend to consolidate in the midst of the Emergency PPKM Plan. Meanwhile, the Rupiah exchange rate was weakening at IDR14,500. We estimate the JCI will move in the range of 5,912-6,080 while waiting for inflation rate data MoM release. Today's recommendation: JSMR, WIKA, FREN, BEKS.
Corporate Action
Cum Dividend Date: LPGI (IDR279/share), BISI (IDR38/share), JTPE (IDR15/share)
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