Global Market Highlight
DJIA weakened by -0.16% on Monday (30/08) followed by S&P 500 (+0.43%), and Nasdaq (+0.90%). The Wall Street closing was varied due to last week's dovish comments from the Federal Reserve on tapering its monetary stimulus refocused investors' minds on economic growth such as the release of labor data non-farm payroll which estimated to have 750,000 new jobs in August-21. Today the market will be looking forward to several data releases such as: 1) US CB Consumer Confidence; 2) Germany Unemployment Rate; 3) Eurozone Core Inflation Rate YoY Flash.
Domestic Update
• Government will conduct another round of debt securities (GDS) auction today with the indicative target fund raised to finance the government program at IDR21 trillion - IDR31.5 trillion. There are 7 series of GDS to be on auction including SPN12211202 (reopening), SPN12220527 (reopening), FR0090 (reopening), FR0091 (reopening), FR0088 (reopening), FR0092 (reopening), and FR0089 (reopening). MNCS Comment: The indicative target set by the government was lower than in the previous auction at IDR33 trillion with the maximum target at IDR49.5 trillion. The lower target set by the government is primarily due to the burden sharing scheme with the central bank. Under this scheme, Bank Indonesia (BI) will buy IDR215 trillion of GDS in 2021 and IDR224 trillion in the next year. With the lower target set and clear guidance from the Fed monetary policy we expect demand for this fixed income asset remain high, therefore the government will successfully achieve the target.
• Furthermore, there was an addition of 341 new Covid-19 cases in Jakarta yesterday.
Company News
1. SMRA IJ recorded IDR2.46 trillion revenue in 1H21 or grew by +12.84% YoY (vs IDR2.18 trillion in 1H20). COGS increased from IDR1.24 trillion in 1H20 to IDR1.27 trillion in 1H21. SMRA recorded IDR108.54 billion net profit in 1H21 or a significant increase of +964.12% YoY (vs IDR10.20 billion in 1H20) (Bisnis Indonesia). MNCS Comment: SMRA's revenue was equal to 47.17%, while net profit was 33.13% of our target in FY21E. The existence of PSBB and PPKM caused the recurring income not to be optimal in 1H21, but the performance improvement is gradually recovering which is expected to continue in 2H21E. Currently SMRA is trading at 61.60x/1.92x PE/PBV.
2. AGII IJ recorded revenue of IDR1.30 trillion in 1H21 or an increase of +26.21% YoY (vs IDR1.03 trillion in 1H20). COGS increased from IDR582.28 billion in 1H20 to IDR701.21 billion in 1H21. AGII recorded a net profit of IDR94.89 billion in 1H21 or a significant increase of +467.86% YoY (vs IDR16.71 billion in 1H20) (Kontan). MNCS Comment: The increasing need for oxygen distribution due to covid-19 causes income to increase, besides that the cost of funds can be maintained quite well so that net profit grows in 1H21. AGII is currently trading at 21.17x/1.17x PE/PBV.
3. WEGE IJ recorded revenue of IDR1.36 trillion in 1H21 or declined by -20.47% YoY (vs IDR1.71 trillion in 1H20). COGS decreased from IDR1.56 trillion in 1H20 to IDR1.24 trillion in 1H21. WEGE recorded IDR100.93 billion net profit in 1H21 grew by +3.20% YoY (vs IDR97.80 billion in 1H20) (Emitennews). MNCS Comment: WEGE's revenue reflects 48%, while net income 46.73% of our target in FY21E. WEGE is still trying to improve performance, some of the payments to be received include coming from the Jakarta stadium which is currently still under construction. Currently WEGE is trading at the level of 8.92x/0.80x PE/PBV.
IHSG Updates
JCI rose by +1.71% to 6,114.90 on Monday (30/08) followed by net foreign buy reaching IDR567.48 billion. JCI closed higher in all sectors, led by the industrial sector (+3.41%) followed by the infrastructure sector (+2.45%). JCI strengthened driven by the decision of the Fed which stated that tapering would be carried out in stages but interest rates remained at a low position, thereby reducing the level of market anxiety. On the other hand, Rupiah strengthened by +0.33% towards the level of IDR14,370/USD on the spot market. We estimate the JCI will move in the range of 6,080-6,180. Today's recommendation: PGAS, BSDE, TKIM, SMGR.
Corporate Action
Public Expose: DNET, BMAS, WOOD
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