Domestic Update
• The implementation of micro-scale PPKM in Java and Bali was again extended from 23 February to 8 March 2021. With the following conditions: 1) offices apply 50% work from home (WFH); 2) teaching and learning activities continue to be carried out online; 3) shopping centers or malls operating until 21.00 with health protocols; 4) restaurants are allowed to eat at places with a maximum of 50% capacity; 5) construction activities operate 100% with health protocols; 6) a maximum of 50% for religious places with health protocols.
• Bank Indonesia estimates that this year's credit growth will increase by 0.5%, from the provisions for down payment (DP) for motor vehicles to 0% and the Loan to Value/Financing to Value (LTV/FTV) ratio for property loans of up to 100%. However, banks still have to regulate a minimum non-performing loan (NPL) in this policy.
• Furthermore, there was an addition of 2.471 new Covid-19 cases in Jakarta yesterday.
Company News
1. BNGA IJ recorded FY20 net profit of IDR2.01 trillion -44.79% YoY (vs IDR3.64 trillion FY19). Net Interest Income (NII) decreased to IDR12.47 trillion or -0.77% YoY. (vs IDR12.58 trillion FY19). Third Party Funds (TPF) were recorded at IDR207.52 trillion in FY20 or +6.09% YoY (vs IDR195.60 trillion FY19). Meanwhile, bank CAR reached 21.92% (CNBC Indonesia). MNCS Comment: Low loan disbursement (-11.93% YoY) and an increase in provision costs resulted in pressure on net income. Management will focus more on asset quality in FY21E with the expectation of a gradual improvement in performance supported by 3% -5% increase in loan growth and maintained NIM at the level of 4.8% -5.0%. Currently BNGA is trading at 9.81x/0.61x PE/PBV.
2. TPIA IJ obtained structured trading facilities worth USD60 million or equivalent to IDR840 billion from DBS Bank. This facility is provided to increase export growth of petrochemical products from Indonesia (CNBC Indonesia). MNCS Comment: We hope that the financing would be good for TPIA's operational and export. TPIA's debt to equity ratio is quite low at 0.49x, so we see that bank financing is still suitable for TPIA. TPIA is currently trading at 7.07x PBV.
3. WSKT IJ targets new contracts from the irrigation infrastructure sector that come from water resources projects such as dams and drinking water treatment systems to reach 15% -20% of the total new contracts of IDR26 trillion (Kontan). MNCS Comment: WSKT is trying to diversify infrastructure contracts, where WSKT specializes in toll road infrastructure. This target is expected to be able to increase new contracts in FY21E. WSKT is trading at 1.52x PBV.
IHSG Updates
JCI increased by +0.38% to 6,255.31 on Monday (22/02) followed by net foreign buy reaching IDR381.89 billion. JCI opened the week strongly backed by the strengthening of commodity price, except for oil, with nickel and tin leading the increase. This has led the commodity stocks to soar, but we note that the coal and metal stocks rose higher. Meanwhile, the Rupiah exchange rate was weakening at IDR14,118. We estimate JCI will move in the range of 6,156 – 6,315 while waiting for money supply and Loan growth data release. Today's recommendation: BBNI, SMRA, LSIP, TOWR.
Corporate Action
RUPS: JIHD, TPMA
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