MNCS Morning Navigator 10 November 2020

Global Market Highlight

DJIA increased by +2.95% on Monday (09/11) followed by from S&P 500 (+1.17%) and though Nasdaq fell by -1.53%.Stock closes invariably as investors are still waiting for the post-election stimulus policy which will have an impact on economic recovery. Meanwhile, the Senate Majority Leader said the potential for a smaller stimulus but right on target after the decline in unemployment benefit claims (continuing) by 6.64% as of October. Furthermore, Pfizer and BioNTech jointly announced that their Covid-19 vaccine candidate was more than 90% effective. Moreover, the market will look forward to several data releases today, such as: 1) China Inflation Rate; 2) UK Employment Change; 3) Eurozone ZEW Economic Sentiment Index.

Domestic Update

The Indonesia Consumer Confidence Index for October was at 79.0, slightly lower than the previous month (83.4) due to the impact of the lack of recovery in economic activity and community income regarding to COVID-19 pandemic. Even though the consumer confidence for current economic conditions weakened, the confidence for the future economic conditions remained at Consumer Expectation Index (IEK) of 106.6, supported by strong and optimistic level of future income and job availability.

Company News

1.       PWON IJ reported a decline in revenue of 41.87% YoY in 3Q20 to IDR5.24 trillion. Amongst all segment, the condominium and office sales segment experienced highest contraction of 59.6% YoY to IDR883.29 billion while the land and building sales segment was the only one that successfully booked a growth 35.3% YoY. PWON managed to reduce its COGS by -29.49% YoY. As the result, PWON’s net income was reported to be IDR600.69 billion (-72% YoY) in 3Q20 (Market Bisnis). MNCS Comment: The decrease is due to the financial performance of the property sector is still affected from Covid-19. In addition, the increase in financial expenses and the resulting loss from foreign exchange caused PWON's net profit to decline in 3Q20. PWON is currently traded at 25.86x/1.45x PE/PBV.
2.        PZZA IJrevenue decreased 9.18% YoY to IDR2.67 trillion in 3Q20. The highest revenue contributor was food sales from third party which stood at IDR2.54 trillion, followed by third party beverage sales of IDR136.28 billion. The company managed to decrease its COGS and selling expense by -3.2% and -4.21% YoY respectively. However, the general and administrative as well as other operating expenses were reported to increase. Thus, the company booked a net loss of IDR8.67 billion in 3Q20 (Kontan). MNCS Comment: We expect that Indonesia's restaurant chains and retailers are struggling to keep their business afloat amid the Covid-19 pandemic. We hope for a better demand recovery on FY21E. PZZA is currently traded at 1.51x PBV.
3.       IPCM IJ announced to distribute interim dividends of IDR10.55 billion for 5.28 billion shares of the company. Dividend per share stood at IDR2 with dividend yield of 0.87%. The cum date will be on 12 November 2020 (Kontan). MNCS Comment: IPCM's interim dividend is smaller than previously at IDR3/share though top line and bottom line increase slightly by 3.75%/1.34% YoY in 9M20. IPCM is currently traded at 13.07x/1.11x PE/PBV.

IHSG Updates

JCI rose by +0.38% to 5,356.01 on Monday (09/11) followed by net foreign buy reaching IDR190.80 billion. JCI keep rising amid the strengthening on Regional Asia indices still from Biden's victory though the consumer confidence index release fell to 79 in October 2020. The increase was supported by the rise in mining sector in which DKFT, ANTM, INCO and TINS rallied boosted by electric vehicle sentiment. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,065. We estimate JCI will move in the range of 5,331 – 5,400 while waiting for current account data release. Today's recommendation: WSKT, TOWR, ADRO, ASII.

Corporate Action

RUPS: MCAS, HEAL

Disclaimer On

WSKT, TOWR, ADRO, ASII, PZZA, IPCM, PWON