Indonesia Market Today - 25 January 2021

A. INDONESIA MORNING MARKET REVIEW

(Mon, 25 Jan 2021).

Global Market Highlight

DJIA slipped by -0.57% on Friday (22/01) followed by S&P 500 (-0.30%) and the gains on Nasdaq (+0.09%). Wall Street was dragged down by losses in blue-chip technology stalwarts Intel and IBM following their quarterly results, as hopes for a full economic reopening in the coming months waned. Furthermore, new data in the US show vaccines are less effective against the new virus mutations. Moreover, the market will look forward to several data releases today, such as: 1) US Chicago Fed National Activity Index; 2) Germany Ifo Business Climate; 3) Eurozone ECB President Lagarde Speech.

Domestic Update

• BI released economic liquidity or money supply in a broad sense (M2) of IDR6,900.0 trillion or an increase of 12.4% YoY. This figure is slightly higher than the previous month`s growth of 12.2% YoY. This increase was driven by M1, which grew by 18.5% YoY and was in line with the increase in circulation of currency in the public and Rupiah demand deposits.

• Furthermore, there was an addition of 3,512 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI dropped by -1.66% to 6,307.13 on Friday (22/01) though followed by net foreign buy reaching IDR69.83 billion. The decline that occurred was in accordance with what we predicted from the beginning of the year, where there will be a correction in the last weeks of Jan-2021. This is in line with: 1) the focus of the market is returning to the effectiveness of vaccines & vaccine distribution channels; 2) no positive catalyst from within the country that has been able to encourage further increases in the index; 3) the government extends the Java-Bali PPKM period in line with the increase in the Covid-19 case. Meanwhile, the Rupiah exchange rate was weakening at IDR14,035. We estimate JCI will move in the range of 6,288 – 6,400 while waiting for Markit Manufacturing PMI Data Release.

B. INDONESIA CORPORATE NEWS

1. ADHI IJ

Recorded new contracts of IDR19.7 trillion in FY20 or +34% YoY (vs IDR14.7 trillion FY19). As much as 93% are construction and energy project contacts, 6% came from property project contracts, while the rest came from other projects. ADHI is targeting new contracts of IDR24 trillion FY21E and FY21E revenue growth target of 20% YoY. ADHI has budgeted for capital expenditure of IDR3 trillion FY21E. The funds will be used to finance several ongoing projects, such as the Yogyakarta-Solo-Bawen toll road project. In addition, the capital expenditure will be used to purchase equipment to the needs of the subsidiary.

Achievement of new contracts that grew quite well amidst the minimal tender in FY20. Currently ADHI is trading at 293.38x/1.08x PE/PBV.

2. PPRO IJ

Obtained a loan of IDR1.6 trillion from its parent company, PT PP Tbk (PTPP). This loan will be used to pay off part of the financial obligations due. This loan has a term of 3 years with an interest rate of 9.5% per annum and is non revolving.

The synergy is quite good, because PPRO has to improve its balance sheet in FY21E. PPRO is currently trading at 55.04x/1.40x PE/PBV.

3. KRAS IJ

Managed to cut operating costs by 41% YoY to USD200.8 million FY20 (vs USD337.4 million FY19). The largest cost reduction came from consumable costs down by 59% YoY to USD16 million FY20 (vs USD40.6 million FY19). Spare part costs fell 56% YoY to USD4.5 million FY20 (vs USD11 million FY19) followed by utility costs which fell 27% to USD39.2 million FY20 (vs USD53.5 million FY19).

It seems that KRAS has managed to implement efficiency which is one of a decent strategy to increase margin in the pandemic hit economy. KRAS is trading at the level of -24.47x/1.97x PE/PBV.

C. STOCK WATCHLIST

ANTM, BBRI, TLKM, PTPP

DISCLAIMER ON

GFS ASIA TEAM

• 0
• 0
• just now
• 0