Indonesia Market Today - 6 April 2021

A. INDONESIA MORNING MARKET REVIEW

TUE, 6 APRIL 2021

Global Market Highlight

DJIA rose by +1.13% on Monday (05/04) followed by the S&P 500 (+1.44%) and Nasdaq (+1.67%). Wall street strengthened supported by US economic data creating investor optimism. The weakening yield on the 10-year US Treasury also curbed inflation concerns. The ISM survey for Mar-2021 showed US service industry activity surged to a record high. US nonfarm payrolls data jumped by 916,000 jobs in Mar-2021, beating consensus forecasts. On the other hand, Janet Yellen is working with G20 countries to agree on minimum global corporate tax rates. Moreover, the market will look forward to several data releases today, such as: 1) US Consumer Inflation Expectations; 2) China Caixin Composite PMI; 3) Eurozone Unemployment Rate.

Domestic Update

• The Secretary of the Ministry of Cooperatives and Small and Medium Enterprises stated that Micro Business Productive Assistance (BPUM) will be continued until 2021. In addition, productive assistance for micro-businesses has been distributed to around 6.5 million people with a total aid amounting to IDR7.9 trillion as of April 01, 2021.

• Furthermore, there was an addition of 523 new Covid-19 cases in Jakarta yesterday.

IHSG Updates

JCI dropped by -0.68% to 5,970.29 on Monday (05/04) followed by net foreign sell reaching IDR621.10 billion. JCI weakened again on the first day of the week as it still awaits for a domestic catalyst that can support the hike. Only miscellaneous industry managed to slightly increase while the others weakened with the property sector fell the deepest. Meanwhile, the Rupiah exchange rate was strengthening at Rp14,515. We estimate JCI will move in the range of 5,892-6,100 while waiting for Foreign Exchange Reserve data release.

Support: 5,892, 5,735
Resistance: 6,230, 6,390

B. INDONESIA CORPORATE NEWS

1. INDY IJ

Posted revenue of USD2.07 billion in FY20, which is down -25.34% YoY (vs USD2.78 billion in FY19). However, cost of revenue also decreased from USD2.78 billion in FY19 to USD1.82 billion in FY20. INDY posted a net loss of USD103.47 million in FY20 (vs a net loss of USD18.16 million in FY19).

INDY`s performance are still weighed by the pandemic in FY20 while we hope that the increase in coal price will improve INDY`s performance in FY21E. Currently INDY is trading at 0.79x PBV.

2. PTBA IJ

Will distribute FY20 cash dividends of IDR72.64/share or IDR835 billion of the total FY20 profit of IDR2.4 trillion.

PTBA`s dividend payout ratio of 35% of FY20`s net profit decreased compared to FY19 which reached 92.75% while the dividend yield offered was 2.8% or below market expectations which usually PTBA always offers an average yield above 10%. We see a decrease in PTBA`s dividend payout ratio along with the decline in profit in FY20 and the company`s plan to increase its capex in FY21E. BSDE is currently trading at 12.26x/1.75x PE/PBV.

3. SRIL IJ

Recorded net sales of USD1.28 billion, up +8.55% YoY (vs USD1.18 billion in FY19). However, cost of goods sold also grew from USD946.58 million in FY19 to USD1.06 billion in FY20. SRIL posted a net profit of USD85.33 million or decrease -2.65% YoY (vs USD87.65 million in FY19).

SRIL`s performance is quite stable amid the Covid-19 pandemic, supported by lower financial costs. The health of the balance sheet is still a main focus for SRIL, given the unresolved extension of the syndicated loan worth USD350 million which led to a downgrade rating from Moody`s and Fitch. SRIL is trading at 3.23x/0.41x PE/PBV.

Corporate Action

Cum Dividend: BNII (IDR3.32/share)
GENERAL MEETING OF SHAREHOLDERS: TINS, ITMG

C. INDONESIA STOCK WATCHLIST

1. UNTR - Buy on Weakness (22,200)

Buy on Weakness: 21,500-22,200
Target Price: 23,400, 25,000
Stoploss: below 21,000

2. TINS - Buy on Weakness (1,515)

Buy on Weakness: 1,400-1,500
Target Price: 1,700, 2,000
Stoploss: below 1,385

3. INKP - Buy on Weakness (10,475)

Buy on Weakness: 9,750-10,200
Target Price: 12,000, 13,500
Stoploss: below 9,300

4. WSBP - Sell on Strength (198)

Sell on Strength: 200-222

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