MNCS Morning Navigator 29 December 2020

Global Market Highlight

DJIA rose by +0.68% on Monday (28/12) followed by S&P 500 (+0.87%) and Nasdaq (+0.74%). Wall street was driven by the news from President Donald Trump who signed a stimulus bill worth USD900 billion as well as approving the USD2.3 trillion fiscal 2021 state budget law. Furthermore, the House of Representative is voting for USD2,000 direct payment relief bill from previously at USD600. The US government was spared from the shutdown and unemployment in the US was getting benefits again. Moreover, the market will look forward to several data releases today, such as: 1) US Note Auction; 2) US Redbook; 3) US S&P Home Price.

Domestic Update

• The Indonesian government officially closes the territory for foreign citizens (WNA) starting early next year for 14 days. The closure of this area is in anticipation of the spread of a new strain of the Covid-19 corona virus originating from the UK. Minister of Foreign Affairs said, based on the results of the Cabinet meeting on Monday, December 28, the Indonesian government decided to close entry access for all foreign nationals from January 1 to January 14, 2020. Indonesia's policy covers the area of foreigner access to respond to the development and spread of the new virus resulting from the mutation of the Covid-19 virus.
• Furthermore, there is an additional of 1.678 new Covid-19 cases in Jakarta yesterday.

Company News

1.        HRUM IJ booked a revenue USD136.14 million in 3Q20 which decreased by -32% YoY. However, direct cost and expenses was recorded at USD98.72 million which dropped by 33.33% YoY followed by a new recording of other revenues amounting to USD 18.23 million. So that HRUM posted a net profit of USD25.73 million, an increase of 60.41% YoY in 3Q20 (Emiten News). MNCS Comment: We see that the revenue from coal mining will increase along with the rising commodity price. HRUM's strategy to diversify to nickel mining is also decent considering the long term down trend on coal. HRUM is currently traded at 16.53x/1.69x PE/PBV.
2.        GEMS IJ will distribute interim dividends II amounting to USD30 million or equivalent to IDR428.4 billion. Dividend per share is at USD 0.0051, equivalent to IDR 72.84 per share. Yield stood at 2.85% and cum date falls on January 5, 2021 (Emiten News). MNCS Comment: GEMS has just distributed an interim dividend on 22 December 2020, though the quarterly performance are declining, GEMS still distribute quite an attractive dividend.
3.        INTA IJ posted a revenue of IDR569.57 billion in 3Q20 which decreased significantly by 65.34% YoY. Sales of heavy equipment to the infrastructure sector were recorded at 43%, mining at 37%, the general industry at 4%, transportation, forestry, and agriculture at 1% each, and to other sectors at 13%. INTA also recorded a net loss of IDR168.15 billion in 3Q20 (Kontan). MNCS Comment: Certainly with the declining mining as well as economic activity which we see has not recovered completely, it will impact INTA's performance.

IHSG Updates

JCI rose by +1.41% to 6,093.55 on Monday (28/12) followed by net foreign buy reaching IDR209.77 billion. JCI rose again after a long Christmas weekend with all sectors improving especially agriculture and infrastructure supported by some telco stocks. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,155. We estimate JCI will move in the range of 6,010 – 6,170 while waiting for money supply data release. Today's recommendation: CTRA, INTP, TKIM, WSKT.

Disclaimer On

CTRA, INTP, TKIM, WSKT, HRUM, GEMS, INTA