11 Juni 2020
MNCS Morning Navigator 11 June 2020
Global Market Highlight
DJIA decreased by -1.04% on Wednesday (10/06) followed by the flat movements of S&P 500 (-0.53%) although Nasdaq increased slightly by +0.67%. These movements were contrast to the Fed decision to maintain rates at 0% which are considered decent for the economy. The Fed also will give additional stimulus to aid domestic economic condition. On the other hand, Nasdaq was supported by the rise on tech stocks such as Apple (+2.5%) and NIVIDIA (+3.5%), while Tesla followed suit by rising 8.9%. The market will look forward to several data releases today, such as: 1) US Fed Interest Rate Decision; 2) US Initial Jobless Claims per May-2020; 3) US PPI per May-2020.
Domestic Updates
The Indonesia government estimates that the economic will grow negatively in 2Q20. There are around 32 sectors that recorded a drop in sales since April 2020 due to COVID-19. By average the sales of all sectors decreased significantly by up to -70% YoY. The sectors which still booked a positive growth are: 1) Public infrastructure (+25%); 2) Vegetable oil (+16%); 3) Consumer staples (+7%); 4) Pharmacy and medical devices (+3%). The revival of economic activities are urgently needed as soon as possible to resolve the pandemic, the longer it takes the more suffering the economy will be in 2020.
Company News
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AUTO IJ posted revenue of IDR3.84 trillion in 1Q20 (vs IDR3.94 trillion in 1Q19). AUTO managed to press its cost of revenue to IDR3.28 trillion, decrease 3.35% YoY. However, the company's sales and general and administrative expenses grew to IDR194.82 billion and IDR237.69 billion. As a result, AUTO's net profit amounted to IDR114.72 billion dropped by 28% YoY in 1Q20. (IDNFinancials) MNCS Comment: Automotive sector is one of the most impacted by the Covid-19 pandemic, so AUTO's net profit decreased in 1Q20. AUTO is traded at 5.99x/0.41x PE/PBV.
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ACST IJ plans to increase its capital through a rights issue this year. The company will release as many as 15 billion shares. The company expects the rights issue to strengthen its capital structure after posting a IDR1.1 trillion net loss in 2019. (Kontan) MNCS comment: The right issue plan is a strategic corporate action in the midst of a sluggish business, but it must pay attention to how investors respond to this corporate action. ACST is traded at 1.82x PBV.
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PTBA IJ will be distributing dividends amounting to IDR3.65 tn with 90% dividend payout ratio from the previous ratio of 75%. Dividend per share is at IDR316.8/ share with dividend yield at 13.26%. Cum date and distribution date have yet to be announced. (RUPS) MNCS Comment: We note that due to the change in the payout ratio, the dividend yield is quite high and can be an attractive for investors. PTBA is traded at 1.34x PBV, higher than peers.
IHSG Updates
JCI fell by -2.27% to 4,920.68 on Wednesday (10/06), followed by a net foreign sell reaching IDR515.53 billion. This decrease was due to profit taking in midst of overbought condition of global and domestic market. Major investors step aside for a while to digest next guidance related to FED rate and new stimulus package in FOMC Meeting. Meanwhile there are some noises in domestic market mainly come from the upswing risks of COVID-19 case in Indonesia which hit new high reaching 34,316 cases and its impact to real economy, which is estimated to push Indonesia GDP to grow negative in 2Q20. Meanwhile, the Rupiah exchange rate against the USD was weakening at IDR13,980. We estimate JCI will move in the range of 4,850-5,010 while waiting for Consumer Confidence as of May-2020. Today's recommendation: BBRI, BSDE, GGRM, PTBA.
Corporate Action
RUPS: BIRD, JSMR, TINS
Disclaimer On
BBRI,
BSDE,
GGRM,
PTBA,
AUTO,
ACST
