Indonesia Market Today - 23 February 2021

A. INDONESIA MORNING MARKET REVIEW

(Tue, 23 Feb 2021).

Global Market Highlight

DJIA was flat by +0.09% on Monday (22/02) followed by the decrease on S&P 500 (-0.77%) and Nasdaq (-2.46%). The Wall Street movement was backed by expectations for the USD1.9 trillion stimulus bill, which will include the proposed USD15/hour wage proposal, is expected to be passed in the House of Representatives this week. Furthermore, the ongoing reduction in virus cases stoked optimism over the economic outlook. On the other habf, concern grew on rapidly rising Treasury yields to around 1.35%, the highest level in February. Moreover, the market will look forward to several data releases today, such as: 1) US CB Consumer Confidence; 2) Eurozone Core Inflation Rate; 3) UK Employment Change.

Domestic Update

• The implementation of micro-scale PPKM in Java and Bali was again extended from 23 February to 8 March 2021. With the following conditions: 1) offices apply 50% work from home (WFH); 2) teaching and learning activities continue to be carried out online; 3) shopping centers or malls operating until 21.00 with health protocols; 4) restaurants are allowed to eat at places with a maximum of 50% capacity; 5) construction activities operate 100% with health protocols; 6) a maximum of 50% for religious places with health protocols.

• Bank Indonesia estimates that this year`s credit growth will increase by 0.5%, from the provisions for down payment (DP) for motor vehicles to 0% and the Loan to Value/Financing to Value (LTV/FTV) ratio for property loans of up to 100%. However, banks still have to regulate a minimum non-performing loan (NPL) in this policy.

• Furthermore, there was an addition of 2.471 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI increased by +0.38% to 6,255.31 on Monday (22/02) followed by net foreign buy reaching IDR381.89 billion. JCI opened the week strongly backed by the strengthening of commodity price, except for oil, with nickel and tin leading the increase. This has led the commodity stocks to soar, but we note that the coal and metal stocks rose higher. Meanwhile, the Rupiah exchange rate was weakening at IDR14,118. We estimate JCI will move in the range of 6,156 – 6,315 while waiting for money supply and Loan growth data release.

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

B. INDONESIA CORPORATE NEWS

1. BNGA IJ

Recorded FY20 net profit of IDR2.01 trillion -44.79% YoY (vs IDR3.64 trillion FY19). Net Interest Income (NII) decreased to IDR12.47 trillion or -0.77% YoY. (vs IDR12.58 trillion FY19). Third Party Funds (TPF) were recorded at IDR207.52 trillion in FY20 or +6.09% YoY (vs IDR195.60 trillion FY19). Meanwhile, bank CAR reached 21.92%.

Low loan disbursement (-11.93% YoY) and an increase in provision costs resulted in pressure on net income. Management will focus more on asset quality in FY21E with the expectation of a gradual improvement in performance supported by 3% -5% increase in loan growth and maintained NIM at the level of 4.8% -5.0%. Currently BNGA is trading at 9.81x/0.61x PE/PBV.

2. TPIA IJ

Obtained structured trading facilities worth USD60 million or equivalent to IDR840 billion from DBS Bank. This facility is provided to increase export growth of petrochemical products from Indonesia.

We hope that the financing would be good for TPIA`s operational and export. TPIA`s debt to equity ratio is quite low at 0.49x, so we see that bank financing is still suitable for TPIA. TPIA is currently trading at 7.07x PBV.

3. WSKT IJ

Targets new contracts from the irrigation infrastructure sector that come from water resources projects such as dams and drinking water treatment systems to reach 15% -20% of the total new contracts of IDR26 trillion.

WSKT is trying to diversify infrastructure contracts, where WSKT specializes in toll road infrastructure. This target is expected to be able to increase new contracts in FY21E. WSKT is trading at 1.52x PBV.

Corporate Action
General Shareholders Meeting : JIHD, TPMA

C. STOCK WATCHLIST

1. BBNI - Buy on Weakness (5,925)

Buy on Weakness: 5,700-5,900
Target Price: 6,400, 6,850
Stoploss: below 5,250

2. SMRA - Spec Buy (935)

Spec Buy: 900-930
Target Price: 970, 1,000
Stoploss: below 830

3. LSIP - Buy on Weakness (1,290)

Buy on Weakness: 1,260-1,290
Target Price: 1,400, 1,580
Stoploss: below 1,255

4. TOWR - Sell on Strength (1,135)

Sell on Strength: 1,135-1,170

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