Indonesia Market Today - 24 February 2021

A. INDONESIA MORNING MARKET REVIEW

(Wed, 24 Feb 2021).

Global Market Highlight

DJIA was flat by +0.05% on Tuesday (23/02) followed by S&P 500 (+0.13%) and the decrease on Nasdaq (-0.50%). Wall Street movements have been driven by a brighter outlook for the economy. Covid-19 infections continue to decline, the pace of vaccine rollouts is increasing, and President Joe Biden`s USD1.9 trillion stimulus is expected to be rolled out sooner than later. While the Fed stated that the economy is still from the central bank`s employment and inflation goals, and will take some time to achieve it. Moreover, the market will look forward to several data releases today, such as: 1) US CB Consumer Confidence; 2) Germany GDP Growth; 3) Hong Kong GDP Growth.

Domestic Update

• BI released the M2 money position in January 2021 of Rp6,761.0 trillion or grew 11.8% YoY, in which the economic liquidity or M2 money supply in January 2021 continued to show positive growth although slightly slower. The slowdown in M2 growth in January 2021 was influenced by a lag in net claims to the Central Government.

• Furthermore, there was an addition of 782 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI increased by +0.28% to 6,272.81 on Tuesday (23/02) followed by net foreign buy reaching IDR469.55 billion. JCI was still highly influenced by the global market movement though it seems that the domestic sentiment was not enough to boost it higher. Infrastructure sector recorded the most gain with the surge of telco stocks. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,092. We estimate JCI will move in the range of 6,156 – 6,315 while waiting for Loan growth data release.

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

B. INDONESIA CORPORATE NEWS

1. ITMG IJ

Recorded FY20 revenue of USD1.18 billion or -30.9% YoY (vs USD1.71 billion FY19) while COGS was USD986.18 million FY20, or -28.96% YoY (vs USD1.39 billion FY19). So that the net income was recorded at USD39.46 million FY20, or -69.76% YoY (vs USD129.42 million FY19).

We see that ITMG`s export volume dropped by around 15%-20% in FY20, but it seems that the rise in coal price cannot offset that. Currently ITMG is trading at 24.95x/1.15x PE/PBV.

2. MEGA IJ

Will distribute an interim dividend of IDR2.1 trillion for FY20 or equivalent to IDR301.56 per share. In FY20, MEGA recorded profit attributable to owners of the parent entity amounting to IDR3.01 trillion, retained earnings of IDR908.30 billion and equity of IDR18.21 trillion. Cum dividend on March 1, 2021.

We observe that MEGA provides higher dividends compared to the previous period with the DPR 69.81% (vs 49.93% in FY19). With MEGA`s share price at Rp.10,600 per share, the dividend yield will reach 2.84%. MEGA is currently trading at 24.54x/4.05x PE/PBV.

3. SMRA IJ

Plans to conduct a right issue of 3.61 billion shares or the equivalent of 25% of the issued and fully paid capital. The nominal price for the additional capital is IDR100 per share. SMRA will get funds of around IDR3.14 trillion from this corporate action, where the funds will be used to strengthen the capital structure and for the expansion of the company including its subsidiaries, either directly or indirectly.

The right issue is expected to strengthen the company`s working capital structure. Apart from that, the timing of this corporate action is quite right when the market is stable. SMRA is trading at 1.76x PBV.

Corporate Action

Rights Issue: PGJO (IDR50/share)

C. STOCK WATCHLIST

1. CTRA - Spec Buy (1,140)

Spec Buy: 1,100-1,140
Target Price: 1,240, 1,300
Stoploss: below 1,075

2. KLBF - Buy on Weakness (1,540)

Buy on Weakness: 1,510-1,540
Target Price: 1,700, 1,850
Stoploss: below 1,490

3. SIMP - Buy on Weakness (430)

Buy on Weakness: 420-430
Target Price: 450, 460
Stoploss: below 392

4. ANTM - Sell on Strength (2,940)

Sell on Strength: 3,000-3,150

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