Indonesia Market Today - 22 March 2021

A. INDONESIA MORNING MARKET REVIEW

(MON, 22 MAR 2021).

Global Market Highlight

DJIA slipped by -0.71% on Friday (19/03) followed by S&P 500 (-0.06%) while Nasdaq rose by +0.76%. The Dow and S&P 500 fell for a second straight day supported by a decline in bank stocks due to the sharp retreat on bond yields after hitting 1.75% as the Fed said it would not extend the supplementary leverage ratio exemptions. On the other hand, tech stocks such as Facebook, Amazon, and Alphabet managed to increase. Moreover, the market will look forward to several data releases today, such as: 1) US Chicago Fed National Activity Index; 2) US Existing Home Sales; 3) Eurozone Current Account.

Domestic Update

• BI released the Demand and Supply Survey for Bank Financing in February 2021 which recorded a Weighted Net Balance (WNB) of 26.5%. This indicates that corporate financing needs for the next 3 months are predicted to be relatively stable compared to the survey in January 2021 of 27.1%. Some of the sectors that showed the largest increase in financing were the Agriculture, Fisheries and Forestry sectors, Trade, Transportation and Warehousing, as well as the Mining and Quarrying sector.

• Furthermore, there was an addition of 1,638 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI rose by +0.13% to 6,356.16 on Friday (19/03) followed by net foreign buy reaching IDR512.28 billion. The slight strengthening of the JCI was supported by consumer, miscellaneous industry and basic industry. Previously, JCI weakened prior to closing due to the decline in Wall Street which was caused by an increase of the 10-year treasury bond yield to a level of 1.75%. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,408. We estimate JCI will move in the range of 6,320-6,400 while waiting for the motorbike sales data release.

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

B. INDONESIA CORPORATE NEWS

1. INTP IJ

Posted revenue of IDR14.18 trillion in FY20 or decreased by11% YoY (vs IDR15.94 trillion in FY19). However, COGS also decreased by 13.1% YoY to IDR9.07 trillion in FY20. INTP posted a net profit of IDR1.80 trillion in FY20 which slightly decreased 1.5% YoY (vs IDR1.83 trillion in FY19).

The decrease in INTP income was due to the cessation of construction of infrastructure projects caused by Covid-19, however INTP was able to maintain its performance with cost efficiency. We estimate that INTP`s performance in 2021 will improve along with the increase in infrastructure budget and economic recovery in 2021. Currently INTP is trading at 28.12x/2.29x PE/PBV.

2. JAYA IJ

Posted revenue of IDR65.48 billion in FY20 or increased 3.26% YoY (vs IDR63.42 billion in FY19). Despite the 6.95% YoY rise in COGS to IDR45.96 billion, JAYA still managed to post a net profit of IDR3.03 billion in FY20 which increased 106.12% YoY (vs IDR1.47 billion in FY19).

JAYA`s performance in FY20 is quite good amid the challenging industry. The potential for economic improvement in FY21E has the potential to further improve JAYA`s performance to be more optimal. JAYA is currently trading at 16.85x/0.76x PE/PBV.

3. AUTO IJ

Posted revenue of IDR11.86 trillion in FY20 or decreased 23.2% YoY (vs IDR15.44 trillion in FY19). COGS dropped by 22.41% YoY to IDR10.28 trillion. However, AUTO still posted a drop of -99.6% YoY in net profit to IDR2.24 million in FY20.

The drop on AUTO`s performance is expected as car sales slump in FY20. But hopefully AUTO can pick up pace in FY21. AUTO is trading at 2.715.82x/0.59x PE/PBV.

C. INDONESIA STOCK WATCHLIST

1. INCO - Buy on Weakness (4,500)

Buy on Weakness: 4,400-4,500
Target Price: 5,100, 5,700
Stoploss: below 4,350

2. UNVR - Buy on Weakness (6,750)

Buy on Weakness: 6,625-6,750
Target Price: 7,000, 7,400
Stoploss: below 6,475

3. WTON - Buy on Weakness (350)

Buy on Weakness: 340-350
Target Price: 400, 440
Stoploss: below 334

4. CPIN - Sell on Strength (6,950)

Sell on Strength: 6,950-7,100

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