Indonesia Market Today - 19 February 2021

A. INDONESIA MORNING MARKET REVIEW

(Fri, 19 Feb 2021).

Global Market Highlight

DJIA slipped by -0.38% on Thursday (18/02) followed by S&P 500 (-0.44%) and Nasdaq (-0.72%). Wall Street was under pressure due to an unexpected climb in weekly jobless claims as adverse weather in recent weeks in parts of the US held back hiring activity. Investors believe that additional stimulus is needed to boost the market as economy showing signs of weakening. Moreover, the market will look forward to several data releases today, such as: 1) US Markit Manufacturing PMI Flash; 2) Japan Inflation Rate; 3) UK Retail Sales.

Domestic Update

• Bank Indonesia decided to lower the BI 7-Day Reverse Repo Rate (BI7DRR) by 25 bps to 3.50%, the Deposit Facility rate by 2.75%, and the Lending Facility rate by 4.25%. Whereas, this decision is considered as a further step to encourage the national economic recovery.

• Furthermore, there was an addition of 373 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI decreased by -0.44% to 6,200.31 on Thursday (18/02) followed by net foreign buy reaching IDR35.55 billion. JCI’s healthy correction continues despite positive news from the interest rate cut which we believe will bring an advantage to the automotive and property sector. But it seems that the domestic investors were still profit-taking and foreign investors otherwise. Meanwhile, the Rupiah exchange rate was weakening at IDR14,025. We estimate JCI will move in the range of 6,156 – 6,315 while waiting for BI Loan growth data release.

Support: 6,156, 6,069
Resistance: 6,315, 6,505

B. INDONESIA CORPORATE NEWS

1. ACES IJ

Will add new outlets in Kota Kudus, Central Java. This first outlet of this year, which will open on February 22, 2021. The outlet area is approximately 3,100 square meters.

With the addition of these outlets, ACES will have a total of 209 outlets. We believe that this year ACES should achieve its target of opening 8-10 stores in FY21E with a revenue growth target of around 8% YoY. Currently ACES is trading at 38.86x/5.66x PE/PBV.

2. BDMN IJ

Recorded a decrease in net profit of 75% YoY to IDR1 trillion in FY20 (vs IDR4.07 trillion FY19). It was noted that credit realization fell by 6% YoY to IDR135.78 trillion. Total DPK grew by 5% YoY to IDR143.55 trillion.

We note that the decline in loan disbursement and NIM to lead pressure on FY20 earnings. Loan growth led by corporate segment (+25% YoY) supported by the collaboration with MUFG group. Meanwhile, the provisioning has improved with the NPL coverage ratio improved at the level of 200%. BDMN is currently trading at 15.74x/0.71x PE/PBV.

3. WIKA IJ

Through its subsidiary PT Wijaya Karya Industri & Konstruksi (WIKA IKON) signed a collaboration with a subsidiary of VINCI Construction from France, namely PT Freyssinet Total Technology (Freyssinet) for Majalengka Steel Manufacturing. The form of cooperation undertaken is the production and assembly of Freyssinet products namely Lead Rubber Bearing (LRB) and High-Damping Bearing (HDRB).

LRB and HDRB products will be used for bridge bearings with marketing areas of domestic and abroad. This cooperation is certainly expected to increase efficiency and product quality, as well as increase competitiveness of domestic and abroad. WIKA is trading at 247.96x/1.23x PE/PBV.

Corporate Action

General Meeting of Shareholders : RODA IJ

C. STOCK WATCHLIST

1. WSBP - Buy on Weakness (266)

Buy on Weakness: 250-264
Target Price: 294, 308
Stoploss: below 234

2. DOID - Buy on Weakness (316)

Buy on Weakness: 300-312
Target Price: 348, 370
Stoploss: below 274

3. PGAS - Spec Buy (1,450)

Spec Buy: 1,420-1,450
Target Price: 1,660, 1,900
Stoploss: below 1,395

4. INCO - Sell on Strength (6,200)

Sell on Strength: 6,275-6,400

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