Indonesia Market Today - 26 January 2021

A. INDONESIA MORNING MARKET REVIEW

Global Market Highlight

DJIA slipped by -0.12% on Monday (25/01) followed by gains on S&P 500 (-0.36%) and Nasdaq (+0.69%). Investors turned their focus to the U.S. Senate, which is aiming to pass Covid-19 relief legislation before former President Donald Trump`s impeachment trial begins in early February. While concerns grew over the timing and size of fiscal stimulus and earning reports from companies lowered optimism at the start of a week. Moreover, the market will look forward to several data releases today, such as: 1) US CB Consumer Confidence; 2) US IMF World Economic Outlook; 3) UK Employment Change.

Domestic Update

• The Investment Coordinating Board (BKPM) released data on foreign direct investment (FDI) which reached IDR412.8 trillion (-2.4% YoY) in 2020. The majority of investments came from: 1) Singapore USD9.8 billion; 2) China USD4.8 billion; 3) Hong Kong USD3.5 billion; 4) Japan USD2.6 billion; 5) South Korea USD1.8 billion.

• Furthermore, there was an addition of 2,451 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI dropped by -0.77% to 6,258.57 on Monday (25/01) though followed by net foreign buy reaching IDR154.43 billion. JCI still continues to decline with all sectors except finance weakened. While property, agriculture and miscellaneous industry became the sectors which fell the deepest. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,022. We estimate JCI will move in the range of 6,195 – 6,430 while waiting for PMI Markit Manufacturing data Release.

B. INDONESIA CORPORATE NEWS

1. DMAS IJ

Achieved marketing sales of IDR2.39 trillion in FY20 or 19% higher than the target of marketing sales in 2020 of IDR2 trillion. The biggest source of marketing sales for DMAS came from the sale of industrial land totaling 119.5 hectares.The achievement in marketing sales is quite good for FY20. In addition, the potential for investment in Indonesia has the potential to increase the demand for industrial land in FY21F. Currently DMAS is trading at 27.73x/1.93x PE/PBV.

2. TBIG IJ

Offers debt securities of USD300 million or equivalent to IDR4.47 trillion with a fixed interest rate of 2.75%. Interest will be paid every 6 months starting on July 20, 2021. TBIG plans to use the proceeds to pay part of the outstanding balance of the revolving loan facility of USD375 million in 2019, revolving loan facility of USD100 million or facility B, as well as a revolving loan of USD200 million 2017. We believe TBIG still has room to seek funding through loan facilities, in line with the capital-intensive nature of tower business and the net gearing ratio which is still at the 3.5x level. TBIG is currently trading at 47.29x/7.87x PE/PBV.

3. HOKI IJ

Is targeting sales growth of around 10-15% in FY21E. HOKI`s capital expenditure budget absorption in the 3Q20 increased from IDR70 billion to IDR90 billion, so that in 2021 HOKI will budget around IDR100 billion for capital expenditure, which comes from internal cash and bank loans. We assess that the capex that will be used for the addition of a dryer to break the skin and product diversification is the company`s strategy in maintaining margins in FY21E, amidst the conditions of demand that have not fully recovered. HOKI is trading at the level of 68.86x/4.08x PE/PBV.

C. STOCK WATCHLIST

WSBP, GIAA, JPFA, RALS.

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