MNCS Morning Navigator 25 September 2020

Global Market Highlight

DJIA rose by +0.20% on Thursday (24/09) followed by S&P 500 (+0.30%) and Nasdaq (+0.37%).The release of unemployment benefits claims (continuing) which slightly improved at the level of 12.5 million (previously 12.6 million) pushed indices into the green zone.  In addition, Markit's flash reading of the US Manufacture PMI per September showed a slight increase in the figure of 53.5 (previously 53.1).  However, investors are still waiting for the fate of a fairly tough additional stimulus on the US Congress table. Coupled with the final stage clinical trials of the Astra Zeneca vaccine, it cannot be followed up. Moreover, market will look forward to several data releases today such as: 1) US Durable Goods Orders; 2) UK Consumer Confidence; 3) US Fed Speeches.

Domestic Updates

OJK stated that the value of bank loan restructuring reached IDR884.5 trillion from 7.38 million debtors. The credit relief was given to 5.82 million MSME with a value of IDR360.6 trillion. Meanwhile, 1.56 million non-MSMEs received credit relief amounting to IDR523.9 trillion. OJK also monitors the placement of government funds in general banking, both in the Himbara group of IDR30 trillion and the regional banks reaching IDR11.5 trillion. As of September 14, 2020, the realization of credit disbursement for placement of funds in the Himbara group had reached IDR119.8 trillion to 1.5 million debtors. As for the regional banks as of September 16, 2020, it was recorded that loans had been disbursed amounting to IDR7.4 trillion.

Company News

1.       GOOD IJ posted a revenue of IDR3.91 trillion (-8.37% YoY) in 1H20. The decline in net sales was triggered by lower sales in the snack (-8.85% YoY) and beverage segment (-17.53% YoY). The increase in expenditure was also found in other operating expenses which shot up 167.26% YoY. So the company’s net profit dropped by 40.87% YoY to IDR129.01 billion in 1H20 (Kontan). MNCS Comment: We note that the decline in sales occurred amidst the limitation of activity due to the pandemic. Meanwhile, the corporate action of the acquisition of PT Mulia Boga Raya Tbk (KEJU) is expected to be able to expand the business network and to strengthen its position in the f&b industry. GOOD is currently traded at 35.57x/3.73x PE/PBV.
2.       UNTR IJ booked a decent increase on their coking coal by 124.2% MoM in August 2020. UNTR managed to sell 95.000 tons of coking coal, though overall production drop to 75.8 million ton until August 2020. Overburden removal also drop to 480.6 million ton as of August 2020. Meanwhile, sales of Komatsu heavy equipment continued to decline, selling only 1,043 units until August 2020. However, sales of komatsu increased by 23.5% MoM to 105 units in August 2020 (Bisnis Indonesia). MNCS Comment: UNTR did said that they will be focusing on coal sectors, as they will be benefited from the increase on the coal price. On the other hand, they also will focus on their gold sector as well which is promising, UNTR through it’s subsidiary is producing gold from Martabe mine, one of the largest in Indonesia. UNTR is currently traded at 10.51x/1.45x PE/PBV.
3.       ASSA IJ reported revenue of IDR1.40 trillion which increased by 29.85% YoY in 1H20. Despite the increase in the company's cost of revenue by 37.53% YoY, ASSA was still able to record gross profit growth. Conversely, there was a decrease in other operating income by 29.60% YoY. Thus, ASSA posted a profit of IDR43 billion in 1H20 which decreased by 23.41% YoY  from IDR56.14 billion in the same period last year (Bisnis Indonesia). MNCS Comment: Most of the transportation sector took a toll from the pandemic and posted disappointing results, however ASSA managed to record growth on their top line which is remarkable. Due to the lack of efficiency, ASSA failed to grew their bottom line as it drops. ASSA is currently traded at 19.04x/1.30x PE/PBV.

IHSG Updates

JCI slipped by -1.53% to 4,842.76 on Thursday (24/09) followed by net foreign sell reaching IDR498.36 billion. This decline was triggered by investors who tended to watch the market movement so that trading volume was relatively small. This is also caused by the projection for the 3Q20 economy which going towards the brink of recession, although it is better than the previous quarter as well as the extension of Jakarta’s PSBB until 11 October 2020. Meanwhile, the Rupiah exchange rate was weakening at IDR14,890. We estimate JCI will move in the range of 4,850-4,930 while waiting for Money Supply data release. Today's recommendation: BBNI, HMSP, MEDC, CTRA.

Corporate Action

RUPS: INPC, BNGA

Disclaimer On

BBNI, HMSP, MEDC, CTRA, GOOD, UNTR, ASSA