Global Market Highlights
DJIA weakened -3.57% on Wednesday (18/05), followed by the S&P 500 (-4.04%) and Nasdaq (-4.73%). Wall Street corrected significantly due to the prospect of declining corporate earnings in line with high inflation and the slowing economy became negative sentiment. Moreover, Housing Starts Apr-22 fell -0.2% MoM to 1.73 million (vs 1.76 million at consensus). Today, the market will be looking toward several data releases such as: 1) US Initial Jobless Claims; 2) US Philadelphia Fed Manufacturing Index; 3) US CB Leading Index MoM.
Domestic Update
• Residential Property Price Index (IHPR) grew by 1.87% YoY in 1Q22, higher than 4Q21 which recorded a growth of +1.47% YoY. MNCS Comment: The improvement in residential property prices was in line with the improving sales performance although it was still in the contraction zone. Residential property sales were recorded at -10.11% YoY in 1Q22 (vs -11.60% YoY in 4Q21). We view that residential property sales will continue to show improvement in line with: 1) low interest rates; 2) improving public mobility and 3) improving the economy amid rising commodity prices.
• Furthermore, the second dose of vaccination rate nationally has reached 79.9% or equivalent to 166.32 million people.
Company News
1. PTBA IJ posted revenue of IDR8.21 trillion, up +105.38% YoY in 1Q22 (vs IDR3.99 trillion in 1Q21). Net profit recorded an increase of +354.61% YoY to IDR2.28 trillion in 1Q22 (vs IDR500.52 billion in 1Q21) (Bisnis Indonesia). MNCS Comment: The increase in top line was driven by third party coal revenues which reached IDR4.55 trillion or up +155.52% YoY. In addition to the increase in ASP, the company managed to increase its coal production volume by +40% YoY to 6.34 million tons. Meanwhile, selling and marketing expenses decreased by -28.73% YoY to IDR173.76 billion causing NPM to grow to 27.73% in 1Q22 (vs 12.53% in 1Q21). PTBA is currently trading at 5.83x/1.92x PER/PBV.
2. MDKA IJ posted revenue of USD123.09 million or up +164% YoY in 1Q22 (vs USD46.55 million in 1Q21). The company managed to record a net profit of USD69.65 million in 1Q22 (vs net loss of USD4.98 million in 1Q21) (CNBC Indonesia). MNCS Comment: Top line driven by export earnings from sales of gold, silver and copper which rose significantly in line with rising commodity prices. Meanwhile, the proportion of COGS to revenue decreased significantly from 105% in 1Q21, to 65% in 1Q22. MDKA is currently trading at 27.19x/9.49x PER/PBV.
3. MIKA IJ will distribute cash dividends of IDR500 billion or equivalent to IDR36 per share. Dividend payout ratio about 40% of FY21's net profit of IDR1.23 trillion. Cum dividend date on May 20, 2022 (Bisnis Indonesia). MNCS Comment: That way MIKA will offer a dividend yield of 1.32% or down from the FY20 yield of 1.55%. MIKA is currently trading at 35.96x/7.45x PE/PBV.
IHSG Updates
JCI rose +2.24% to 6,793.41 on Wednesday (18/05), followed by net foreign sell which reached IDR280.55 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the technology sector (+5.57%) followed by the raw materials sector (+2.21%). On the other hand, the sector that experienced weakness was the energy sector (-0.69%) followed by the infrastructure sector (-0.68%). The index's strengthening was in line with Wall Street and Asian Stocks. Investors are optimistic that the easing of the lockdown in China and the Fed's firm statement to reduce the high inflation rate will make the economic outlook better in the future. On the other hand, the Rupiah exchange rate closed low at IDR14,688/USD. We estimate that the JCI will move in the price range of 6,650-6,830 while waiting for the release of Car Sales YoY APR data. Today’s recommendation: BBCA, ADMR, ESSA, CTRA.
Corporate Action
RUPS: KLBF, TRIN, BBHI
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