MNCS Morning Navigator 02 November 2020

Global Market Highlight

DJIA decreased by -0.59% on Friday (30/10) followed byS&P 500 (-1.21%) and Nasdaq (-2.45%). US stock indexes closed lower on Friday to cap Wall Street's biggest weekly sell-off since March, as losses in richly priced tech heavyweights, a record rise in Covid-19 cases pushed US hospitals to the brink of capacity as Covid-19 cases surpassed 9 million, while jitters over the presidential election snuffed investor sentiment. Moreover, the market will look forward to several data releases today, such as: 1) US ISM Manufacturing PMI; 2) China Caixin Manufacturing PMI; 3) Eurozone Markit Manufacturing PMI.

Domestic Update

The government plans to increase the tariff for palm oil or crude palm oil (CPO) in FY21F. The CPO export duty rates will use a progressive tax scheme, namely a tax levy rate with a percentage based on the number or quantity of tax objects and based on the price or value of the tax object. The export duty rate is progressive for CPO around USD12.5 per USD25 price increase. Meanwhile, for CPO derivative products in liquid form, it is subject to USD10 per USD25 increase.

Company News

1.       ANTM IJ recorded a decrease in revenue by 26.55% YoY to IDR18.03 trillion in 9M20. ANTM seems to have succeeded in suppressing several expenses, one of which is sales and marketing expenses which dropped by -65.89% YoY to only IDR341.1 billion. So ANTM's profit rose by 30.2% YoY to IDR835.78 billion in 9M20 (Market Bisnis). MNCS Comment: We see that ANTM's bottom line is driven from the expenses drop while actually the 3Q20 top line is increasing significantly by 105% YoY supported by gold sales +119% YoY. The stellar performance will surely add more to ANTM's current appeal. ANTM is currently traded at 22.75x/1.34x PE/PBV.
2.       INCO IJrevenue managed to increase 12.7% YoY from USD506.46 million to USD571.02 million in 9M20. INCO recorded a nickel shipment volume of 19,954 metric tons equals to USD210.6 million in 3Q20. INCO's net profit shot up 47,800% YoY to USD76.64 million in 9M20 from USD160,000 previously in the same period last year. (Kontan). MNCS Comment: INCO's performance is boosted by efficiency on cost while increase on other income from gain on foreign exchange also contributed slightly. INCO is also benefitted from the 13% QoQ on nickel price due to increasing demand. INCO is currently traded at 26.54x/1.34x PE/PBV.
3.        ITMG IJ will be distributing dividends of IDR307/share. Dividend yield stood at 3.77%. Cum date will be at November 9, 2020 while payment date will be at November 24, 2020 (Kontan). MNCS Comment: The current interim dividend is lower than the usual, though we see that the dividend yield is still attractive. ITMG is currently traded at 10.74x/0.74x PE/PBV.

IHSG Updates

JCI dropped by -0.31% to 5,128.23 on Tuesday (27/10) though followed by net foreign buy reaching IDR108.24 billion. JCI dropped slightly on the last trading day of the week as local investor seems to be taking profit approaching the long weekend although Agriculture sector is inclining supported by the La Nina weather which will cause lower production on CPO. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,625. We estimate JCI will move in the range of 5,060 – 5,160 while waiting for core inflation data release. Today's recommendation: BBRI, AALI, MAPI, PTPP.

Corporate Action

Cum Date Dividend: SIDO (IDR12.5/share)

RUPS: BBSI, BRAM

Disclaimer On  

BBRI, AALI, MAPI, PTPP, INCO, ANTM, ITMG