Global Market Highlights
DJIA was down -0.29% on Thursday (03/03), followed by S&P 500 (-0.53%) and Nasdaq (-1.56%). The plunge in technology stocks pushed Wall Street into the red. Investors responded negatively to the release of economic data in the form of the ISM Non-Manufacturing PMI Feb-22 which fell to 56.5 points. In addition, it was reported that the Fed chair Jerome Powell would support a 25 bps rate hike, but if inflation persists then the hike could exceed that level. Today, the market will be looking toward several data releases such as: 1) US Non Farm Payrolls; 2) US Unemployment Rate; 3) UK Construction PMI.
Domestic Update
• Retail Sukuk offering period of SR016 starts on February 25 - March 17, 2022. SR016 has a maturity of 3 years with an annual rate of return of 4.95% and it is tradable between domestic investors starting from June 11, 2022. MNCS Comment: SR016 is the second type of retail SBN issued by the government this year out of a planned 7 types of retail SBN with a total funding target of IDR100 trillion by 2022. We remain optimistic that the government will be successful in issuing SR016 if we look at the previous issuance of retail SBN, namely ORI021 with a total issuance volume reaching IDR25.07 trillion in line with the strengthening of the domestic investor base.
• Furthermore, the second dose of vaccination rate nationally has reached 69.4% or equivalent to 144.57 million people.
Company News
1. JPFA IJ recorded total revenue of IDR44.88 trillion in FY21, up +21.43% YoY (vs IDR36.96 trillion in FY20). Net profit rose +120.64% YoY to IDR2.02 trillion in FY21 (vs IDR916.71 billion in FY20) (Kontan). MNCS Comment: We see that the company has the potential to maintain its good performance in FY22E along with the economic recovery that might increase people’s consumption rate. JPFA is trading at the level of 9.28x/1.53x PER/PBV.
2. LSIP IJ recorded a +28% YoY increase in sales to IDR4.53 trillion in FY21 which was driven by an increase in palm product’s average selling price (ASP), where ASP of CPO and PK rose by +31% YoY and +55% YoY. Net profit was recorded at IDR991 billion, up +42% YoY in FY21 (IQ Plus). MNCS Comment: We see that the company's positive financial performance in FY21 was in line with the increase in CPO price and demand. The company also managed to control and improve its efficiency. LSIP is trading at the level of 10.31x/1.04x PER/PBV.
3. KLBF IJ targets a stable operating profit margin at 14.5% - 15.5% in FY22E. Meanwhile, sales and profit growth targets are set in the range of 11% - 15% YoY in FY22E. In addition, the company has increased product inventory to anticipate potential global disruptions of raw materials (Kontan). MNCS Comment: We see that the company's optimism was supported by its solid performance in FY21, where the company's revenue increased by +13.6% YoY to IDR26.25 billion and net profit also grew by +12.5% YoY to IDR3.07 trillion. KLBF is trading at the level of 24.59x/4.04x PER/PBV.
IHSG Updates
JCI weakened -0.77% to 6,868.40 on Wednesday (02/03), followed by net foreign buys which reached Rp469.56 billion. The sector that led the index weakening was the transportation sector (-2.28%) followed by the technology sector (-1.54%). On the other hand, the energy sector strengthened +2.76% followed by the non-cyclical sector (-0.66%). The index was depressed along with other Asian bourses as investors worried about the Russia-Ukraine geopolitical conflict. This is allegedly triggering investors to take action taking profit considering there are more holidays this week. In addition, the slowdown in the Manufacturing PMI for February-22, although still expansive at the level of 51.2 points, raised investor concerns about the state of the economy, especially readiness to face geopolitical uncertainty and the potential for an increase in the Fed's benchmark interest rate. On the other hand, the Rupiah weakened at IDR14,384/USD level. We estimate that the JCI will move in the range of 6,850-6,920. Today’s recommendation: ANTM, SRTG, TKIM, ASRI.
Corporate Action
RUPS: BRMS, IBFN, PTSN
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