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Morning Dew 13 March 2020

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UPDATE ON AUTOMOTIVE INDUSTRY JANUARY 2020

Data from the Association of Indonesia Automotive Industries (Gaikindo) shows that in January 2020 cars production hit 112,655 units, grew +14.6% M//M compared to December 2019 (98,297 units). On a yearly basis, production crawled higher by +5.6% than January 2019 (106,673 units). Based on brand, Toyota still dominated the output by 36.6% (41,262 units), followed by Mitsubishi 14.1% (15,853 units), Suzuki 12.7% (14,361 units), Daihatsu 12.6% (14,162 units), and Honda 11.5% (12,902 units).

 

On the selling side (wholesales), though, it is still clearly visible that the industry is suffering from weak demand since the realization in January was 79,983 units, slipped by -3% Y/Y compared to January 2019 (82,155 units) or fell by -8.8% M/M compared to December 2019 (87,664 units). Toyota and Daihatsu (Group Astra) still dominated the market, although slightly eroded, with 47.9% share, joined by Honda 16% (12,777 units), Suzuki 13.1% (10,512 units), and Mitsubishi 11.5% (9,179 units). As for sales growth, Honda and Suzuki posted the slickest results by both growing +27%, resulting in the increase in market share.

 

Completely Built Up (CBU) export reached 18,807 units. The number contracted by -25.1% M/M compared to December 2019 (25,113 units) or was down -15.2% Y/Y compared to January 2019 (22,189 units). Daihatsu and Toyota grabbed 66.6% of export share, while Suzuki followed suit by 20.8% share, Mitsubishi 9.6%, and Wuling 1.5%. Amidst challenging conditions, Gaikindo set a moderate growth of +5% this year.

 

JCI

JCI on Thursday trading session (12/03/2020) was closed lower -258 point to level 4,896 (-5.0%). The transaction volume reached 5.08 B shares, with a value amounting to Rp5.98T. Foreign Investors booked a net sell amounting to Rp256.6B resulting in the accumulation of foreign net sale of Rp7.21T (YTD).

 

All sectors weakened, led by Basic Industry (-8.48%), Agriculture (-5.71%), and Mining (-5.60%). Stocks that supported JCI are  RMBA (+2.8%), JRPT (+3.9%) and BUKK (+6.8%). While these stocks weighing down the JCI were BBRI (-7.7%), BBCA (-5.0%) and BMRI (-5.9%).

 

U.S. NEWS  

U.S. stocks slumped with DJIA and S&P 500 marking its biggest one-day percentage drop since the Black Monday stock market crash in October 1987 along with Nasdaq Composite and  S&P 500 joined DJIA in bear market as investors were not impressed by the US$1.5 Trillion of temporary liquidity into the financial system by the Federal Reserve. In unprecedented moves to contain the coronavirus epidemic domestically, New York State banned all social gatherings of 500 or more people, while basketball, baseball, hockey and soccer authorities cancelled or postponed entire sporting seasons, and the U.S. Capitol shuttered to the public. Moreover, the U.S. banned all travel from Europe into the U.S. for foreign nationals, starting this Friday for the next 30 days.

 

The DJIA fell 9.99%, to 21,200.89, the S&P 500 lost 9.51%, to 2,480.63 and the Nasdaq Composite dropped 9.43%, to 7,201.80.

 

U.S. Treasury yields rose, the benchmark 10-year notes were up 0.87%, with the price falling 17/32. On the short end of the curve, the 2-year notes were flat, yielding 0.49%. The 30-year bonds dropped -123/32, to a yield of 1.46%. 

 

Oil prices continue to fall, Brent crude down -8.9%, to US$32.86/barrel and WTI crude fell -5.67%, at US$31.11/barrel. 

 

COMPANY UPDATE

WIKA AIMS TO ACQUIRE NEW CONTRACTS IN 1Q20 WORTH Rp5.5T

PT Wijaya Karya (Persero) Tbk. (WIKA) in 1Q20 is targeting new contracts realization of Rp5.5T or reaching 8.46% of the FY2020 target of Rp65T or up by  +57.8% Vs new contracts  realization in 2019 amounting to Rp41.2T.

 

PEFINDO REVIVED  PTPP’S RATINGS TO BE NEGATIVE

PEFINDO gave "idA+" rating for Sustainable Bonds II (2018 & 2019)  owned by PT Pembangunan Perumahan Tbk (PTPP) amounting to Rp3,0T and a rating of "idA-" for PTPP Perpetual Securities (Phase I) amounting to Rp150B. PEFINDO revised Company’ rating to negative from stable. PTPP’s financial performance is estimated to decline due to higher debt payments to finance its CAPEX & working capital (property segment). As of 2019, the Company's revenue was stagnate due to the low demand for the EPC & property segment. Besides, the Company’s debt to EBITDA ratio to be 4.7x. This rating will be revised again if the Company’s debt to EBITDA ratio is above 5x for the next 12 months  - 18 months.

 

KLBF WILL INCREASE THE PRODUCTION OF GINGER HERBAL MEDICINE 

PT Kalbe Farma Tbk (KLBF) increased the production of herbal medicines (50%) containing red ginger "Bejo Ginger Red '' to respond to the corona virus spread in Indonesia. KLBF is producing red gingers by building a red ginger farmers community (9,000 farmers) throughout Indonesia now. All farmers are in Java, Sumatra, Kalimantan and other areas.

 

TECHNICAL OUTLOOK

JCI IS NEGATIVE, WITH EXPECTED RANGE OF 4,690 to 4,940.

JCI was closed lower at 4,895 breaching all three nearest Support at 5,130/020/4,940, so the next Support lays at 4,790/690 while the Resistance hanging still at 5,230/290/750. PSAR red dot still appeared along with EMA 5, 20&50 still in dead cross pattern. MACD, RSI, and Stochastic still negative along with the Candlestick breached the lower Bbline. Hence, from technical analysis and foreign sentiment, our JCI is NEGATIVE.

 

TPIA

Support            7050

Resistance        8400

Target Price      8500

 

ACES

Support            1440

Resistance        1890

Target Price      1800

 

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).

Fri March 13Th, 2020

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