Global Market Highlights
DJIA flat +0.00% on Monday (14/03), while S&P 500 (-0.74%) and Nasdaq (-2.04%). Initially Wall Street started trading in the green zone following the weakening of world oil prices and hopes of peace from the 4th Russia-Ukraine meeting. However, the fall in Chinese technology stocks dragged other stocks into the red zone. This happened after the spike in Covid-19 cases that occurred in China and had the potential to reduce China's economic growth and spread to global economic growth. Moreover, the rise in yield US T-note 10Y to 2.14% following the FOMC meeting convened by the Fed, further weighed on the performance of tech stocks. Today, the market will be looking toward several data releases such as: 1) US PPI MoM; 2) UK Unemployment Rate; 3) Germany ZEW Economic Sentiment Index.
Domestic Update
• The trade balance surplus is expected to remain high in Feb-22. Consensus estimates that Indonesia's trade balance is at a USD1.66 billion surplus with exports jump +37.32% YoY and imports rose +40.04% YoY. MNCS Comment: The trade balance surplus that remains high is due to higher commodity prices, especially energy and coal, which continue to rise amidst the Russia-Ukraine conflict. The increase in imports, apart from the low base effect, also indicates an improvement in the domestic economy. However, exports remained higher than imports and the trade balance surplus further strengthened Indonesia's economic resilience.
• Furthermore, the second dose of vaccination rate nationally has reached 72.7% or equivalent to 151.41 million people.
Company News
1. WIKA IJ recorded a revenue of IDR17.8 trillion in FY21, up +7.69% YoY (vs IDR16.53 trillion in FY20). Meanwhile, net profit decreased -36.67% YoY to IDR117.66 billion in FY21 (vs IDR185.76 billion in FY20) (Bisnis Indonesia). MNCS Comment: This net profit decrease was along with the drop of other income by -65% YoY to IDR1.12 trillion in FY21. We see that the company has the potential to improve its performance this year along with the economic recovery. It was recorded that until the end of Feb-22, the company had obtained a new contract of IDR6.1 trillion (vs IDR2.67 trillion at the end of Feb-21). WIKA is trading at the level of 0.71xPBV.
2. TINS IJ recorded revenue of IDR14.61 trillion, down -4.01% YoY (vs IDR15.22 trillion in FY20). Net profit increased +483% YoY in FY21 to IDR1.3 trillion (vs loss of IDR341 billion in FY20). The surge in net profit was supported by a -21% YoY decrease in cost of revenue to IDR11.17 trillion (vs IDR14.09 trillion in FY20) (IQ Plus). MNCS Comment: We see that the company’s positive performance was supported by the increase of tin metal ASP by +89% YoY to USD32.62, amid the sales decrease of -52% YoY to 26,602 metric tons in FY21. TINS is trading at the level of 9.20x/1.90x PER/PBV.
3. ARTO IJ recorded an increase of credit distribution by +491% YoY to IDR5.37 trillion in FY21. Meanwhile, net profit was recorded at IDR86 billion or increase (vs net loss IDR189.57 billion in FY20) (CNBC Indonesia). MNCS Comment: We see that the company has successfully turned the loss over the last 5 years and recorded a positive performance in FY21, supported by the expansion of the company's digital ecosystem. Meanwhile, NPL was maintained below 1%, and CoF declined from 4.5% to 3.2% in FY21. ARTO is trading at the level of 25.87x PBV.
IHSG Updates
JCI rose +0.43% to 6,952.20 on Monday (14/03), followed by net foreign buys which reached Rp1.08 trillion. The majority of sectors supported the index's strengthening, led by the technology sector (+1.85%) followed by the financial sector (+0.77%). On the other hand, the sectors that led the decline were the energy sector (-2.38%) followed by the industrial sector (-1.77%). JCI appreciated due to the strengthening of banking stocks with big caps in the midst of falling energy stocks in line with the improvement in the development of the Russia-Ukraine geopolitical crisis which suppressed a number of global commodity prices. From the Covid-19 development situation, 9,629 additional positive cases were recorded (14/03), the lowest since the end of Jan-22. On the other hand, the Rupiah weakened at IDR14,388/USD level. We estimate that the JCI will move in the range of 6,900-7,000 while waiting for Balance of Trade, Exports YoY, and Imports YoY data. Today’s recommendation: ESSA, BBYB, CPIN, MIKA.
Corporate Action
RUPS: BBNI
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