Indonesia Market Today - 1 March 2021

A. INDONESIA MORNING MARKET REVIEW

(Mon, 1 Mar 2021).

Global Market Highlight

DJIA closed down -1.50% on Friday`s trading (26/02) followed by the S&P 500 (-0.47%) while the Nasdaq gained + 0.56%. Wall Street closed mixed while technology shares advanced, although the rate hike caused concern over investors. On the other hand, the US House of Representatives is expected to approve the Covid-19 stimulus package worth USD 1.9 trillion which is expected to increase optimism in the market. Today the market can watch several data releases such as: 1) US ISM Manufacturing PMI; 2) China Caixin Manufacturing PMI; 3) Germany Inflation Rate.

Domestic Update

• BI stated that the global economic recovery is starting to show and is expected to continue, meanwhile the domestic economy shows gradual improvement in which the implementation of vaccinations and national policy synergies are expected to boost the momentum of national economic recovery going forward. Bank Indonesia predicts Indonesia`s economic growth in the range of 4.3% -5.3% in 2021 with inflation expected to remain under control at around 3.0% ± 1%. Meanwhile, the current account deficit is estimated to remain low at around 1.0% -2.0% of GDP, thus supporting the resilience of the external sector in the Indonesian economy. On the other hand, credit / financing growth is estimated at 5% -7%.

• There were 2,098 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI closed lower-0.76% to the level of 6,241.80 in trading on Friday (26/02) followed by net foreign sell reaching IDR 95.07 billion. JCI closed last week with a weakening where almost all sectors fell quite significantly, only the consumer sector managed to strengthen. We see this as a result of the movement in the global index as reflected in the JCI. Meanwhile, the Rupiah exchange rate weakened to Rp14,235. We estimate that the JCI will move at the level of 6,173-6,315 while waiting for the release of data on credit growth and inflation rates.

Support: 6,173, 6,069
Resistance: 6,315, 6,505

B. INDONESIA CORPORATE NEWS

1. INCO IJ

Recorded sales of USD764.7 million in FY20 or -2% YoY (vs USD782.0 million FY19). Meanwhile, net profit for the year attributable to owners of the parent entity was recorded at USD82.82 million, up 44.28% YoY (vs USD44.28 million FY19).

INCO`s top line decreased slightly due to lower ASP while the bottom line increased significantly due to lower COGS. We hope that INCO`s top line will be better this year with the strengthening of nickel prices. Currently INCO is trading at 51.70x / 2.12x PE / PBV.

2. CTRA IJ

Targets marketing sales revenue growth to grow in the range of 15% -20%. Meanwhile, CTRA has budgeted a capital expenditure of IDR 1 trillion in FY21E, which will be used for project development and land purchases. Currently, the amount of land owned by CTRA is recorded at around 3,000 hectares.

CTRA has sufficient confidence in adding landbanks. We think that this strategy is due to the fact that the residential area is still a good salesperson, due to the high demand for housing in FY21E. Currently CTRA is trading at 69.25x / 1.46x PE / PBV.

3. ITMG IJ

Is targeting FY21E sales volume of 20.7 million to 22.9 million tons, or higher than the sales in 2020 of 21.2 million tons. ITMG will continue to expand into emerging markets, especially in Asean and Asia-Pacific.

We believe this target can be achieved because ITMG has succeeded in reaching 21.2 million tonnes of coal production amidst the pandemic. Currently ITMG is trading at the level of 24.76x / 1.14x PE / PBV.

Corporate Action
Cum dividend date: MEGA (IDR301.56/share)
Rights Issue: SAME (IDR200/share)

C. STOCK WATCHLIST

1. ASII - Buy on Weakness (5,400)

Buy on Weakness: 5,300-5,400
Target Price: 5,950, 6,500
Stoploss: below 5,200

2. GGRM - Buy on Weakness (36,500)

Buy on Weakness: 35,000-36,500
Target Price: 39,000, 42,000
Stoploss: below 34,825

3. PTBA - Buy on Weakness (2,710)

Buy on Weakness: 2,650-2,700
Target Price: 2,900, 3,100
Stoploss: below 2,530

4. INCO - Sell on Strength (6,075)

Sell on Strength: 6,100-6,250

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