Indonesia Market Today - 23 March 2021

A. INDONESIA MORNING MARKET REVIEW

(TUE, 23 MARCH 2021).

Global Market Highlight

DJIA rose by +0.32% on Monday (22/03) followed by S&P 500 (+0.70%) and Nasdaq (+1.23%).Wall Street closed higher led by tech as the US 10-Year yield closed below 1.7%. However, the decline in rates triggered the selling of rate-sensitive bank stocks, pushing financials lower. Sentiment on value stocks was also lowered by a third wave of Covid-19 in Europe that threatens global demand. Moreover, the market will look forward to several data releases today, such as: 1) US New Home Sales; 2) UK Employment Change; 3) UK Unemployment Rate.

Domestic Update

• The Indonesian investment authority receives additional funds of IDR60 trillion from the government. The total funds held by SWF to date are IDR 75 trillion. However, the total funds that must be owned by SWF is IDR300 trillion (30% government & 70% investors). The funds will be allocated to infrastructure development in the form of airports, toll roads and ports and Jasa Marga, Waskita Karya, and Hutama Karya will be appointed as executors of the development.

• Furthermore, there was an addition of 1,474 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI dropped by -0.87% to 6,301.13 on Monday (22/03) followed by net foreign sell reaching IDR409.73 billion. The drop on JCI was led strongly by miscellaneous industry, followed by finance, consumer, infrastructure and property sectors. On the other hand, trade sector managed to increase significantly. Meanwhile, the Rupiah exchange rate was flat at IDR14,408. We estimate JCI will move in the range of 6,268-6,350 while waiting for Markit Manufacturing PMI data release.

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

B. INDONESIA CORPORATE NEWS

1. IPCC IJ

Posted the export performance of completely built units increased 1.72% YoY. This increase succeeded in exceeding the average handling of CBU exports in 2019 of 27,700 units. The handling of CBU exports in February 2021 alone was 30,863 units or an increase of 5.79% YoY compared to the same month in 2020 which amounted to 29,175 units of CBU exports.

The improvement in CBU export growth was due to the improving economy in several regional countries, resulting in growth in Indonesia`s car exports. Currently IPCC is trading at 1.09x PBV.

2. SMAR IJ

Posted revenue of IDR40.43 trillion in FY20 or increased 11.7% YoY (vs IDR36.19 trillion in FY19). However, Cost of revenue also increased by 7% YoY to IDR34.55 trillion in FY20. Though SMAR still managed to post a net profit of IDR1.53 trillion in FY20 which increased 71.2% YoY (vs IDR898.63 billion in FY19).

SMAR is benefitted from the rise in CPO price last year apart from other products that are produced by SMAR. We believe SMAR performance would increase this year with the economic recovery and the improving purchasing power. SMAR is currently trading at 7.28x/0.90x PE/PBV.

3. ESSA IJ

Posted revenue of USD175.51 million in FY20 or decreased 20.97% YoY (vs USD221.91 million in FY19). The cost of revenue also decreased from USD182.82 million in FY19 to USD166.13 million in FY20. However, ESSA still posted a net loss of USD19.12 million in FY20, While ESSA posted net profit of USD2.63 million in FY19.

We see that ESSA`s performance is under pressure due to the Covid-19 pandemic, thus making ESSA`s performance suffer a net loss in FY20. We believe that in FY21E, ESSA`s performance will improve along with the economic recovery and the easing of government policies. ESSA is trading at 1.87x PBV.

Corporate Action

Cum Dividend Date: BMRI (IDR220/share)

C. INDONESIA STOCK WATCHLIST

1. AKRA - Buy on Weakness (3,370)

Buy on Weakness: 3,340-3,370
Target Price: 3,770, 3,900
Stoploss: below 3,190

2. ACES - Buy on Weakness (1,575)

Buy on Weakness: 1,550-1,575
Target Price: 1,670, 1,750
Stoploss: below 1,500

3. ADRO - Buy on Weakness (1,285)

Buy on Weakness: 1,260-1,285
Target Price: 1,375, 1,500
Stoploss: below 1,205

4. BBCA - Sell on Strength (33,100)

Sell on Strength: 33,200-33,600

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