Indonesia Market Today - 5 February 2021

A. INDONESIA MORNING MARKET REVIEW

(Fri, 5 Feb 2021).

Global Market Highlight

DJIA increased by +1.08% on Thursday (04/02) followed by S&P 500 (+1.09%) and Nasdaq (+1.23%). Wall Street soared as tech and cyclical stocks strengthened in line with banks as the economy charting a faster recovery. Initial jobless claims fell 33,000 to 779,000 lower than economists` estimates for a smaller decline to 830,000. The signs of an improving economy coupled with expectations for speedier vaccine rollout in the months ahead have pushed US Treasury yields higher. Moreover, the market will look forward to several data releases today, such as: 1) US Non Farm Payrolls; 2) US Unemployment Rate; 3) US Balance of Trade

Domestic Update

• The government confirmed that the plan to cut incentives for health workers was canceled. The details of the incentives provided by the government are as follows: 1) Specialist doctor incentives of IDR15 million/month; 2) Incentives for PDDS participants of IDR12.5 million/month; 3) Incentives for general practitioners and dentists of IDR10 million/month; 4) Incentive for midwives/nurses of IDR7.5 million/month; 5) Other health incentives of IDR5 million/month.

• Furthermore, there was an addition of 3,632 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI rose by +0.48% to 6,107.22 on Thursday (04/02) followed by net foreign buy reaching IDR609.12 billion. JCI continued to rise as news about the healthcare incentive set a more positive tone. Furthermore, the rise of JCI was backed by basic industry, infrastructure and finance. Meanwhile, the Rupiah exchange rate was weakening at IDR14,015. We estimate JCI will move in the range of 5,920 – 6,280 while waiting for GDP Growth Rate data Release.

B. INDONESIA CORPORATE NEWS

1. UNVR IJ

Recorded a net profit in FY20 of IDR7.16 trillion or -3.1% YoY (vs IDR7.39 trillion FY19). EBITDA was recorded at 6.18% YoY to IDR10.55 trillion. Meanwhile net sales +0.11% YoY to IDR42.97 trillion in FY20 (vs IDR42.92 trillion FY19). UNVR performance in FY20 remains resilient as they offer various daily products that are needed even during the pandemic. Currently UNVR is trading at 38.88x/56.41x PE/PBV.

2. SIDO IJ

The arrival of a new investor who is one of the private equity investors in Asia, namely Affinity Equity Partners (Affinity). Through its affiliated company, Concordant Investment Pte Ltd., Affinity holds 21% of SIDO`s shares. This aims to strengthen SIDO in the Asian market and prepare to expand into new segments. We see this a good expansion strategy for SIDO to penetrate the new market. SIDO is currently trading at 27.39x/7.08x PE/PBV.

3. PPRO IJ

Targets marketing sales of IDR1.38 trillion with a focus on three lines of business, namely residential development consisting of area developments, apartments and landed houses. In addition, mall & edutainment which consists of lifestyle malls and edupark, as well as hotels consisting of business and leisure hotels. PPRO is preparing a capital expenditure of IDR438 billion. The funds will be used for capital injection of subsidiaries of around 18%, mall & edutainment 25%, hotels 19%, and payments for land owned by around 37%. PPRO must be able to attract consumers. This is because people are still quite selective in buying property. PPRO is trading at 45.97x/1.17x PE/PBV.

C. STOCK WATCHLIST

HMSP, DOID, BBTN, JPFA.

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