Indonesia Market Today - 26 March 2021

A. INDONESIA MORNING MARKET REVIEW

(Fri, 26 Mar 2021)

Global Market Highlight

DJIA rose by +0.62% on Thursday (25/03) followed by S&P 500 (+0.52%) and Nasdaq (+0.12%).Wall Street bounced back as some stocks which were under pressure to oversold levels may be too attractive to ignore. Moreover, jobless claims tumbled 97,000 to a seasonally adjusted 684,000 for the week ended March 20, the lowest since mid-March and below the forecast of 730,000. President Joe Biden talked up the progress on the vaccine target for 200 million shots within the first 100 days of his presidency, followed by economics estimated GDP to increase by 6% in FY21E. Moreover, the market will look forward to several data releases today, such as: 1) US Core PCE Price Index; 2) US Michigan Consumer Sentiment; 3) Germany Ifo Business Climate.

Domestic Update

• The PPnBM policy implemented by the government provides a discount on vehicles with engine capacities of 1501CC - 2500CC. Vehicles of 1,501 cc to 2,500 cc cannot get a 100% PPnBM discount but a maximum of only 50% discount on tax. This means that the incentive is not up to 0% PPnBM or 0% tax. Tax discounts will be given to KBM-R4 with this capacity and the 4x2 segment (50% discount PPnBM) and 4x4 (25% discount PPnBM) with 2 schemes.

• Furthermore, there was an addition of 1,726 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI dropped by -0.54% to 6,122.88 on Thursday (25/03) followed by net foreign sell reaching IDR318.93 billion. JCI kept on declining as it reflected the fall on the global indices due to weakening economic data. Most sectors fell, with agri finance and property led the decline while infrastructure and basic industry managed to increase. Meanwhile, the Rupiah exchange rate was weakening at IDR14,426. We estimate JCI will move in the range of 6,000-6,240 while waiting for Markit Manufacturing PMI data release.

Support: 6,018, 5,735
Resistance: 6,360, 6,400

B. INDONESIA CORPORATE NEWS

1. ERAA IJ

Stated that it will conduct a stock split at a ratio of 1: 5 from the previous nominal value of IDR500 per share to IDR100 per share. March 30, 2021 is the end of trading of shares with old nominal values in the Regular Market and the Negotiation Market. March 31, 2021 is the start of trading shares with new nominal values in the Regular Market and the Negotiated Market.

Stock split is a strategy to increase stock liquidity and purchasing power of retail investors. This is in line with the 8.08% increase in ERAA shares at the close of this Thursday. Currently ERAA is trading at 22.78x/1.75x PE/PBV.

2. AKRA IJ

Posted revenue of IDR17.71 trillion in FY20, which decreased 18.38% YoY (vs IDR21.70 trillion in FY19). While COGS also decreased 20.91% YoY to IDR15.66 trillion in FY20. So AKRA posted an increase of 29.6% YoY in net profit to IDR924.91 billion in FY20 (vs IDR713.62 billion in FY19).

We believe AKRA`s sales will recover in FY21E as business activities begin to recover. Controlling margins will be able to sustain management`s target for double-digit earnings growth this year. AKRA is currently trading at 14.15x/1.50x PE/PBV.

3. BBRI IJ

Will distribute cash dividends of IDR12.12 trillion or 65% of FY20 net profit. The dividend is equivalent to IDR98.3 per share. Dividend payout ratio increased by 60% YoY compared to FY19. However, the dividend per share decreased from the previous year which reached Rp168.2 per share.

Even though the dividend per share distributed decreased from FY19 to IDR168.2 per share, BBRI was still able to offer attractive dividend yields amid sluggish business conditions. The yield offered is around 2.13%, assuming a price of IDR 4,620/share. BBRI is trading at 30.55x/2.89x PE/PBV.

Corporate Action

General Meeting of Shareholders : DEWA, BNII

C. INDONESIA STOCK WATCHLIST

1. BBCA - Buy on Weakness (31,850)

Buy on Weakness: 31,000-31,600
Target Price: 33,000, 34,500
Stoploss: below 30,675

2. ISAT - Buy on Weakness (6,675)

Buy on Weakness: 6,400-6,600
Target Price: 7,000, 7,600
Stoploss: below 6,000

3. SMGR - Spec Buy (11,275)

Spec Buy: 11,000-11,275
Target Price: 12,300, 13,000
Stoploss: below 10,750

4. POWR - Sell on Strength (695)

Sell on Strength: 700-720

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