Indonesia Market Today - 15 March 2021

A. INDONESIA MORNING MARKET REVIEW

(Mon, 15 Mar 2021).

Global Market Highlight

DJIA increased by +0.90% on Friday (12/03) followed by S&P 500 (+0.10%) while Nasdaq weakened by -0.59%. The Dow hit record highs on Friday, as rising reopening optimism continued to encourage the rotation into cyclical stocks. Meanwhile, surging bond yields increase valuation fears which negatively impact technology stocks. The 10-year U.S. Treasury yield rose to 1.64% with the expectation of faster inflation supported by the stimulus. However, sharp increases in interest rates can put pressure on high-growth tech stocks as they reduce the relative value of future profits. Moreover, the market will look forward to several data releases today, such as: 1) US NY Empire State Manufacturing Index; 2) China Retail Sales; 3) China Unemployment Rate.

Domestic Update

• The Ministry of Finance posted the realization of FY20 tax expenditure was at IDR228 trillion, a decrease of -11.3% YoY from the FY19 realization of IDR257.2 trillion. The decline in tax spending last year was in line with the decline in economic activity, especially at the level of Micro, Small and Medium Enterprises (MSMEs). The realization of tax spending from VAT and sales tax on luxury goods (PPnBM) in FY20 was IDR145.5 trillion.

• Furthermore, there was an addition of 1,204 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI rose by +1.49% to 6,358.21 on Friday (12/03) followed by net foreign sell reaching IDR456.76 billion. JCI increased significantly amid the strengthening on the global market. The increase was supported by strong gains of more than 3% by basic industry, property which is supported by the government incentive of 0% DP, mining backed by the rebound on nickel price and agriculture which is backed by the all time high CPO price. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,385. We estimate JCI will move in the range of 6,160-6,400 while waiting for balance of trade data release.

Support: 6,160, 6,090
Resistance: 6,400, 6,505

B. INDONESIA CORPORATE NEWS

1. TINS IJ

Posted revenue of IDR15.21 trillion in FY20 or decreased -21.33% YoY (vs IDR19.34 trillion FY19) while cost of revenue also decreased -22.53% YoY to IDR14.09 trillion (vs IDR18.19 billion in FY19). So that TINS succeeded in reducing the net loss in FY20 to IDR340.60 billion (vs a net loss of IDR611.28 billion in F19.

Efficiency has became a positive booster on the bottom line. While we believe TINS performance will be better in FY21 as tin price scale up. Currently TINS is trading at 2.35x PE/PBV.

2. PTBA IJ

Posted revenue of IDR17.32 trillion in FY20 or decreased -20.48% YoY (vs IDR21.78 trillion FY19) while PTBA`s cost of goods decreased to IDR12.76 trillion in FY20 (vs IDR14.17 trillion in FY19). However, PTBA still posted -41.16% YoY decline in net profit to IDR2.38 trillion in FY20 (vs IDR4.06 trillion in FY19).

Coal sector was under pressure in FY20 and only recovered in late FY20. But currently coal price has spiked even higher than pre-Covid 19 level, so we hope it will boost the performance this year. PTBA is currently trading at 13.18x/1.88x PE/PBV.

3. WOOD IJ

Posted a sales growth of IDR2.9 trillion in FY20 or grew +39% YoY, this value is above WOOD`s target in FY20 of IDR2.6 trillion. The largest sales contribution came from the export market, which accounted for 81.6% of total sales and 18.4% from the domestic market. WOOD targets sales growth of 20% YoY in FY21E.

We hope that the sales realization this year would be higher as WOOD managed to increase 39% YOY of their sales in a pandemic. WOOD is trading at 18.78x/1.63x PE/PBV.

Corporate Action

General Meeting of Shareholders : TBLA, BMRI, GJTL

C. STOCK WATCHLIST

1. TINS - Buy on Weakness

Buy on Weakness: 1,900-2,020
Target Price: 2,200, 2,450
Stoploss: below 1,735

2. TKIM - Buy on Weakness

Buy on Weakness: 13,200-13,700
Target Price: 15,400, 17,000
Stoploss: below 12,600

3. BSDE - Buy on Weakness

Buy on Weakness: 1,230-1,270
Target Price: 1,360, 1,550
Stoploss: below 1,180

4. TLKM - Sell on Strength

Sell on Strength: 3,450-3,500

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