Global Market Highlight
DJIA rose by +0.61% on Monday (23/08) followed by S&P 500 (+0.85%), and Nasdaq (+1.55%). Market digested mixed economic data as home sales unexpectedly increased, while manufacturing activity fell short of expectations. Existing home sales rose by +2% in July-21 against expectations for a decrease. The IHS Markit US Manufacturing PMI fell to 61.2 in August-21 from 63.4 in July-21, missing economists' estimates of 62.5. Subsequently, investor attention will focus on any new clues on the Fed's plan to begin scaling back its monthly bond purchases. Today the market will be looking forward to several data releases such as: 1) US New Home Sales MoM; 2) Germany GDP Growth Rate YoY Final; 3) UK 5-Year Treasury Gilt Auction.
Domestic Update
• The Government of Indonesia and Bank Indonesia (BI) agree to continue the burden sharing scheme to help finance the government budget in 2022. MNCS Comment: We understand that the government still needs alternative financing amid widening fiscal deficit and possible monetary policy normalization by the Fed in the next year despite that this step was actually planned as a one off policy previously. In our opinion the impact of burden sharing continuation could be minimized if government focus is to spur growth so that budget deficit could be brought down, therefore prudent fiscal policy and central bank's independence could be maintained so that investors confidence would not be undermined.
• Furthermore, there was an addition of 485 new Covid-19 cases in Jakarta yesterday.
Company News
1. INKP IJ recorded USD1.63 billion revenue in 1H21 or increased by +9.64% YoY (vs USD1.48 billion in 1H20). COGS rose from USD1.02 billion in 1H20 to USD1.08 billion in 1H21. INKP’s net profit increased by +39.20% YoY to USD282.90 million in 1H21 (vs USD203.23 million in 1H20) (IQ Plus). MNCS Comment: Revenue from cultural paper as well as industrial paper, tissue, and others increased by +21.78% YoY and 19.04% YoY, while the pulp sales recorded a decrease of 13.27% YoY. Currently INKP is trading at 4.24x/0.53x PE/PBV levels.
2. GJTL IJ will distribute FY20 cash dividends of IDR10/share or IDR34.84 billion of the total FY20 net profit of IDR98.17 billion. The Cum Date Schedule on 27 August 2021 (Emitennews). MNCS Comment: GJTL's dividend payout ratio is 39.56% of FY20 net profit, while the total dividend yield offered is 1.32%. Currently GJTL is trading at 13.49x/0.37x PE/PBV levels.
3. TKIM IJ posted USD524.12 million revenue in 1H21 increased by +16.45% YoY (vs USD450.07 million in 1H20). COGS rose from USD391.63 million in 1H20 to USD450.04 million in 1H21. TKIM recorded USD118.41 million net profit in 1H21 or an increase of +32.15% YoY (vs USD89.60 million in 1H20) (IQ Plus). MNCS Comment: Both cultural paper and industrial paper sales increased by +6.23% YoY/+50.64% YoY. We believe processed paper demand is growing along with the recovery. Currently TKIM is trading at 5.80x/0.84x PE/PBV levels.
IHSG Updates
JCI rose by +1.31% to 6,109.83 on Monday (23/08) followed by net foreign buy reaching IDR2.17 billion. All sectors strengthened led by the tech sector (+3.06%) followed by the energy sector (+2.66%). While the majority of Asian indices movement closed at the green zone, led by Nikkei Japan (+1.78%). Moreover, the relaxation of PPKM to level 3 for the Java-Bali region which allows malls and shopping centers to open until 8.00 pm with 50% maximum capacity became a positive sentiment for the JCI movement. Meanwhile the rupiah exchange rate was strengthening at IDR14,413. We estimate the JCI will move in the range of 6,050-6,120 while waiting for the inflation rate MoM. Today's recommendation: BBKP, SIMP, MYOR, SSIA.
Corporate Action
Public Expose: PSAB, DLTA, INOV
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