Global Market Highlights
DJIA weakened -1.38% on Wednesday (23/02), followed by S&P 500 (-1.84%) and Nasdaq (-2.57%). Wall Street is still weighed down by the increasing tensions in the Russia-Ukraine conflict after US President Joe Biden added sanctions for Russia on the gas pipeline (Nord Stream 2) and its operating companies. This comes after Ukraine reported cyber attacks on government and bank websites. With this uncertainty, the gas supply will be threatened in the future and it is suspected that it will trigger an increase in the price of other commodities and become a concern for investors. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ 2nd Est; 2) US New Home Sales MoM 3) UK BoE Gov Bailey Speech.
Domestic Update
• Bank Indonesia (BI) reported broad money supply grew 12.9% YoY to IDR7,634.4tn in Jan-22. Albeit the lower growth compared to previous month, liquidity has remained ample. MNCS Comment: Growth in M2 was influenced by : 1) M1 acceleration (+17.1% YoY) and 2) growth of quasi+ money (+8.2% YoY) in Jan-22. The growth was also in line with credit expansion which recorded a growth of 5.5% YoY.
• Furthermore, the second dose of vaccination rate nationally has reached 67.9% or equivalent to 141.37 million people.
Company News
1. DSNG IJ recorded IDR7.1 trillion of sales, up +6.7% YoY in FY21 (vs IDR6.65 trillion in FY20). The company's net profit also rose +55% YoY to IDR740 billion due to improved performance in the wood products segment and higher CPO prices (Kontan). MNCS Comment: We see that the company might maintain its performance in FY22E supported by the global economic recovery which will encourage an increase in exports of wood products. Demand of CPO also has the potential to increase in FY22E. DSNG is trading at the level of 9.40x/0.99x PER/PBV.
2. MDKA IJ recorded a revenue rose +18.36% YoY to USD380.95 million in FY21. Meanwhile a net profit of USD36.13 million, down -0.16% YoY in FY21 (vs USD36.19 million in FY20) (Kontan). MNCS Comment: We see the decrease in net profit was in line with the increase in operating expenses by +46.15% YoY to USD29.26 million in FY21. In FY22E, the company estimates that it will produce around 18,000 - 22,000 tons of copper and 100,000 - 120,000 ounces of gold which is expected to boost MDKA's performance this year. MDKA is trading at the level of 8.19x PBV.
3. MTEL IJ plans to build more than 1,500 towers in underdeveloped areas to support Indonesia's digital acceleration. Until the end of FY21, Mitratel has 516 towers in border areas, most of which are in Maluku and Papua. MNCS Comment: We see that through this expansion, the company might expand its network, thus increasing its revenue this year. Until now, the company has more than 28,200 towers, 58% are outside Java. MTEL is trading at the level of 2.87x/0.29x PER/PBV levels.
IHSG Updates
JCI strengthened +0.85% to 6,920.06 on Wednesday (23/02), followed by net foreign buys which reached Rp967.51 billion. The sector leading the index strengthening was the infrastructure sector (+2.05%) followed by the technology sector (+1.82%). On the other hand, the transportation sector weakened -0.42% followed by the cyclical sector (-0.29%). The index rose amid investor concerns about the intensifying Russia-Ukraine geopolitical crisis. The positive catalyst came from the money supply growth in a broad sense (M2) in Jan-22 which grew positively +12.9% YoY indicating a good economy. From the activity of foreign investors, foreign inflow is still consistently recorded with the year-to-date reaching Rp. 21.62 trillion, thus giving a good view of the national investment climate and optimism for economic recovery amidst external sentiments that also influence the index strengthening. On the other hand, the Rupiah weakened at IDR14,328/USD level. We estimate that the JCI will move in the range of 6,860-6,950 while waiting for the loan growth data to be released. Today’s recommendation: AKRA, TAPG, AGRO, ISSP.
Corporate Action
RUPS: WIFI
Disclaimer On
