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Morning Dew 10 July 2020

FOKUS

INDONESIA BANKING STATISTICS IN 1Q20

The Indonesia Banking Statistics as of March 2020 (1Q20) shows credit channeling reached Rp5,782 trillion or grew by +8.1% Y/Y. On the other hand, Third Party Funds (TPF) amounted to Rp6,214 trillion or increased higher than loans by +9.5% Y/Y. By and large, banking performance as of 1Q20 seemed to still be able to grow despite the outbreak of Covid-19 pandemic was first announced on March 2, 2020.

 

However, the impact of the pandemic began to emerge by April as credit channeling grew slower than that in the previous month. The credit reached Rp5,676 trillion or increased by +5.8% Y/Y. In line, TPF also grew slower by +8.1% Y/Y to Rp6,128 trillion. Besides, as cited from Bisnis.com, banking performance in May 2020 slowed even further. In terms of credit channeling, it grew by only +3% Y/Y, while TPF increased by +8.9%.

 

Net interest margin (NIM) was relatively maintained above 4%, i.e. 4.31% and 4.57% in March and April, respectively, despite declining in line with BI's cutting its benchmark rate (BI7DRR). By contrast, non-performing loans (NPL) showed a hike trend in March, April, and May, i.e. at 2.77%, 2.89%, and 3.0%, respectively, in accordance with the hard impact of Covid-19 pandemic which has lead to a massive restructuring of loans. As of June 29, the total of credit restructuration had reached Rp740.8 trillion and given to 6.56 million debtors.

 

JCI

On Thursday trading session (7/9), JCI closed lower by -23.4 points (-0.46%) to 5,052.8. Total transaction volume reached 9.8 billion shares with a transaction value of Rp9.16 trillion. Foreign investors posted a net sell of Rp131.5 billion, compounding the year-to-date foreign net sell to Rp16.36 trillion.

 

Only two sectors advanced, i.e. agriculture (+0.99%) and mining (+0.48%). On the other hand, the retreating sectors were led by infrastructure (-0.85%), finance (-0.69%), and basic industry (-0.54%). Stocks supporting the JCI were SMMA (+4.7%), BRPT (+2.9%), and ARTO (+8.1%). By contrast, stocks weighing down the JCI were BBCA (-1.6%), BBRI (-1.6%), and CPIN (-4.7%).

 

U.S. NEWS   

U.S. stocks closed mostly lower as U.S. jobless claims remained high by 1.31 million for the week ending July 4th and dragged down by a report on COVID-19 cases in the U.S. continuing to rise, especially in Arizona and Florida. At the same time, WHO warned that the pandemic is accelerating around the globe. The DJIA fell 1.38%, to 25,706.64, the S&P 500 lost 0.56%, to 3,152.05 and the Nasdaq Composite added 0.53%, to 10,547.75.

 

U.S. Treasury yields fell, pushing prices higher, the benchmark 10-year notes rose 14/32, to yield 0.61%. The two-year notes were flat to yield 0.15%. The 30-year bonds were 64/32 higher, yielding 1.31%.

 

Crude oil prices fell after a record rise on COVID-19 cases in the U.S could stall recovery in fuel demand while demand for crude remains uncertain. WTI crude slipped by -3.37% to US$439.52/barrel, while Brent crude fell by -2.29% to US$42.30/barrel.

 

COMPANY UPDATE

DMAS RECORDED MARKETING SALES Rp1.05 T

PT Puradelta Lestari Tbk. (DMAS) in 1H2020 recorded marketing sales realization of Rp1.05 T or equivalent to 53% of the FY2020 target of Rp2.0 T. In detail, the acquisition of marketing sales in 1Q2020 amounted to Rp654 B and in 2Q2020 amounting to Rp398 B which mainly came from industrial land sales. In 1H2020 DMAS sold 51 Ha of industrial land, of which 19 Ha occurred in 1Q2020 and 32 Ha occurred in 2Q2020. As additional information, DMAS stated that currently there is still industrial land demand in negotiations up to 130 Ha.

 

ELSA WILL PUBLISH SUKUK IJARAH Rp1.5 T

PT Elnusa Tbk (ELSA) will issue Ijarah Sukuk worth Rp1.5 T which will be carried out in stages in 2H2020 which will be used to support the company's expansion. The plan, for the first issuing, will be around Rp700 B and targeted to be published this year. ELSA in 2020 allocated a capex of Rp1.4 T or 105.8% compared to the realization of capex in 2019 of Rp680 B. From those capex budgets, 69% will be used to finance downstream infrastructure investment and investment for the company's growth such as buying operational equipment such as 3D streamers, fabrication of hydraulic workover units (HWU). Then 12% will be used to maintain capacity, and 19% for other needs. The company also plans to acquire a new LNG depot with funding from internal cash and part of the capital market. As additional information, until now the company has only acquired an Amurang LNG depot in Minahasa.

 

KLBF LAUNCHES NEW PRODUCT

PT Kalbe Farma Tbk. (KLBF) in the midst of the COVID-19 pandemic remains committed to improving health for a better life by continuing to produce and market quality health products for the community, namely by launching a new product namely Prove D3 which is a vitamin D3 supplement which has two variants namely Prove D3-1000 IU and Prove D3 Drops. For additional information, the company in 1H2020 has realized a capex budget of Rp600 billion or has reached 60% of the budget of Rp1 Trillion used for the completion of the relocation of the Bintang Toedjoe and Saka Farma factories to Cikarang and for the construction of Enseval Putera Megatrading and Global Chemindo Megatrading warehouses.

 

KRAS OFFERS BLAST FURNACE FACTORY TO NIPPON STEEL AND POSCO

PT Krakatau Steel Tbk (KRAS) stated that it has sent a letter of offer to foreign steel companies, such as Nippon Steel and Pohang Iron and Steel Company (Posco) in order to find strategic partners who are interested in acquiring the company's blast furnace plant. The factory's operational activities have been stopped since December 5, 2019, because it is considered unable to produce steel at competitive or inefficient prices. At the same time, the company's President Director Silmy Karim said that the company needed a bailout of Rp3 Trillion from the National Economic Recovery (PEN) program aimed at moving the steel downstream industry, through relaxing consumer payments.

 

PPRO WILL ISSUE NEW BONDS

PT PP Properti Tbk (PPRO) will issue new bonds amounting to Rp2T. PPRO will use the funds to pay off Company’s debts which must be paid in December 2020 (Rp1, 23T). It also has a bank loan facility of Rp760B, consist of six Medium Term Notes (MTN) with due date in 2Q20: MTN VI (Rp287B, due on August 30), MTN VII Series A (Rp250B, due on September 20), MTN VII Series A & Series B (Rp50B, due on September 28), MTN VIII (Rp200B, due on October 20), MTN IX (Rp213B, in November), and MTN X (Rp200B, due on November 16). Previously, PPRO issued bonds of Rp416B for refinancing & cash flow.

 

WSBP WILL CLOSE ITS CONCRETE PRECAST PLANTS

PT Waskita Beton Precast Tbk (WSBP) WSBP closed two concrete precast plants in Java and Sumatra island. The company will merge the concrete processing plants that will be closed with the closest processing plants in Gasing, Sidoarjo, Klaten and Bojonegara areas. However, the closure of these plants will be not affecting the Company’s concrete production capacity. It also continues to produce precast concrete (3.7MT/ year). Company's profit decreased by 63.51% (Y/Y) in 1Q20. Meanwhile, WSBP revenue also declined by 65.75% (Y/Y) due to a weakening performance of the precast segment (-65.58%, Y/ Y) and the ready mix & construction services segment (-54.82%, Y/Y).

 

SMCB WILL ENTER AMERICAN MARKET

PT Solusi Bangun Indonesia Tbk (SMCB) will maintain its revenue and profit levels in 2020 by focusing on the domestic and export market. Previously, SMCB has exported its cement production to Bangladesh, China and the Philippines since years ago. It targets to supply cement and materials products to other countries, including the American region. Sales volume of cement & slag increased by 5.78% (Y/Y) because of an intercompany sale to the Semen Indonesia Group & higher average selling prices (+5%,Y/Y) in 1Q20. In other hands, SMCB posted revenue of Rp2.46T (+4.88%,Y/Y), followed by other construction service segment revenues (+64.11%,Y/Y). However, Company’s revenues from the finished concrete & aggregate concrete segments were corrected by 26.54% and 41.32%, respectively. SMCB’s profit was recorded at Rp68.42B.

 

KASIKORNBANK WILL BUY AGAIN BMAS SHARES

PT Bank Maspion Tbk (BMAS) will issue shares (rights issue) of Rp3T. Kasikornbank Public Company Limited will buy all shares. Kasikornbank's ownership on BMAS’s share will be 40%. BMAS will use the funds to develop digital banking and digital payment systems. Meanwhile, BMAS still controls of BMAS shares (60%) and plans to become the six largest banks in Indonesia.

 

TECHNICAL OUTLOOK

JCI NEGATIVE, WITH EXPECTED RANGE OF 4,960 to 5,120.

JCI closed lower at 5,052 with the Resistance hanging at 5,130/230 while the Support at 4,975/880. PSAR green dot just appeared along with EMA 5&20 just forming a golden cross pattern. MACD still positive while Stochastic and RSI turn to negative

 

ADHI

Support            500

Resistance        1015

Target Price     995

 

BBTN

Support            900

Resistance        1930

Target Price     1800

 

BEEF

Support            210

Resistance        276

Target Price     260

 

DMAS

Support            102

Resistance        296

Target Price     246

 

GGRM

Support            46725

Resistance        49800

Target Price     49500

 

HOKI

Support            575

Resistance        780

Target Price     710

 

INCO

Support            2750

Resistance        3500

Target Price     3250

 

TBIG

Support            1050

Resistance        1250

Target Price     1120

 

TLKM

Support            2880

Resistance        3540

Target Price     3400

           

WEGE

Support            107

Resistance        290

Target Price     240

 

 

 

DISCLAIMER

This research report is prepared by PT MINNA PADI INVESTAMA SEKURITAS Tbk. for information purposes only and is not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. The report has been prepared without regard to individual financial circumstance, need or objective of person to receive it. The securities discussed in this report may not be suitable for all investors. The appropriateness of any particular investment or strategy whether opined on or referred to in this report or otherwise will depend on an investor’s individual circumstance and objective and should be independently evaluated and confirmed by such investor, and, if appropriate, with his professional advisers independently before adoption or implementation (either as is or varied).

 

Thu July 9Th, 2020

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