Global Market Highlights
DJIA rose +0.27% on Monday (28/03), followed by the S&P 500 (+0.71%) and the Nasdaq (+1.31%). Wall Street's gains were triggered by the weakening of oil prices which made market participants' expectations of the inflation rate to be under control. The decline in US T-note 10Y yields also supported the stocks in the technology sector. Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence; 2) Germany GfK Consumer Confidence; 3) UK Mortgage Approvals.
Domestic Update
• The Ministry of Finance reported 2022 state budget performance with revenues to reach IDR156 trillion; spending IDR127 trillion; a surplus of IDR29 trillion or 0.16% of GDP; financing realization minus IDR2.98 trillion as of Jan-22. MNCS Comment: Indonesia's state budget performance at the beginning of the year was quite positive. The increase in state revenue was supported by tax revenues (+65.57% YoY). On a net basis, the realization of financing shows that the government has made external debt payments and the repayment of maturity of SBN is greater than the new issuance.
• Furthermore, the second dose of vaccination rate nationally has reached 75.9% or equivalent to 157.97 million people.
Company News
1. UNTR IJ through its subsidiary PT Tuah Turangga Agung (TTA) recorded a +257.46% MoM increase in coal sales to 1.43 million tons in Feb-22 (vs 402 thousand tons in Jan-22). This is due to the spillover because of the temporary coal export ban on Jan-22. (Kontan). MNCS Comment: We see that this positive achievement can increase the contribution of the coal mining business segment to the company's revenue. As for the heavy equipment sales business, sales reached +154% YoY to 1,058 units in FY21 (vs 416 units in FY20). UNTR is trading at the level of 9.65x/1.45x PER/PBV levels.
2. MIKA IJ recorded a net income of IDR4.35 trillion in FY21, up +27.20% YoY (vs IDR3.42 trillion in FY20). Meanwhile, net profit reached IDR1.23 trillion in FY21 (vs IDR841.67 billion in FY20) (IQ Plus). MNCS Comment: We see that this increase is supported by revenue from inpatient services which reached IDR2.83 trillion in FY21, up +26.49% YoY (vs IDR2.24 trillion in FY20). The company also has the potential to improve its performance this year along with the expansion plan to build 3 new hospitals. MIKA is trading at the level of 25.04x/5.84x PER/PBV.
3. WTON IJ recorded sales of IDR4.31 trillion or decreased -11,31% YoY (vs IDR4.80 trillion in FY20). Net profit recorded IDR82.90 billion in FY21 or decreased -35,26% YoY (vs IDR128.50 billion in FY20) (Kontan). MNCS Comment: The decline in the company's performance was caused by a decrease in the contract value in FY21. However, the company has the potential to improve its performance this year, along with the economic recovery that can encourage the acceleration of infrastructure development, so that the company is expected to achieve its contract target of IDR7.35 trillion this year. Currently WTON is trading at 22.71x/0.56x PER/PBV.
IHSG Updates
JCI rose +0.67% to 7,049.60 on Monday (28/03), followed by net foreign buy which reached IDR857.89 billion. The majority of sectors supported the index's strengthening, led by the industrial sector (+1.85%) followed by the energy sector (+1.72%). On the other hand, the sectors that experienced weakness were the health sector (-0.97%) and the transportation sector (-0.03%). The index appreciated along with a number of other Asian markets with the catalyst supporting the pace of strengthening was the easing of geopolitical tensions between Russia and Ukraine where Ukraine is preparing to become a non-aligned (neutral) country. In addition, the dividend distribution season by big caps issuers also boosted the index's pace. On the other hand, the Rupiah exchange rate closed lower at IDR14,347/USD. We estimate that the JCI will move in the price range of 7,020-7,100. Today’s recommendation: PGAS, AALI, CPRO, IRRA.
Corporate Action
RUPS: EAST, KOPI, KEJU
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