The JCI September 8, 2020
๐๐๐ฉ๐ญ๐๐ฆ๐๐๐ซ ๐, ๐๐๐๐
* ๐๐ก๐ ๐๐๐ ๐ญ๐ซ๐๐๐ข๐ง๐ ๐ซ๐๐ง๐ ๐: ๐,๐๐๐๐ฉ๐ญ – ๐,๐๐๐๐ฉ๐ญ (๐๐๐ฌ๐ญ๐๐ซ๐๐๐ฒ ๐๐ฅ๐จ๐ฌ๐: ๐,๐๐๐๐ฉ๐ญ)
* ๐๐๐ฅ๐ฅ ๐๐ญ๐ซ๐๐๐ญ ๐ฐ๐๐ฌ ๐๐ฅ๐จ๐ฌ๐๐ ๐๐จ๐ซ ๐ฉ๐ฎ๐๐ฅ๐ข๐ ๐ก๐จ๐ฅ๐ข๐๐๐ฒ ๐จ๐ง ๐๐จ๐ง๐๐๐ฒ
* ๐๐ก๐ ๐๐๐ ๐ข๐ฌ ๐๐ฑ๐ฉ๐๐๐ญ๐๐ ๐ญ๐จ ๐๐ฅ๐ฎ๐๐ญ๐ฎ๐๐ญ๐ ๐ญ๐จ ๐ข๐ง๐๐ฅ๐ข๐ง๐ ๐ก๐ข๐ ๐ก๐๐ซ ๐๐ฒ ๐ฌ๐ฎ๐ฉ๐ฉ๐จ๐ซ๐ญ ๐จ๐ ๐ซ๐๐๐จ๐ฏ๐๐ซ๐ฒ ๐จ๐ ๐๐๐๐๐๐
Morning,
The Jakarta Composite Index (JCI) today (8/9) is expected to be within the range of 5,175pt โ 5,325pt, to fluctuate but incline higher by support ofย the recovery of USIDR close. Wall Street was closed yesterday on public holiday, while Dow and S&P500 stock index futures were some 1% higher within opening time this morning.
๐๐ง๐๐จ๐ง๐๐ฌ๐ข๐ ๐๐จ๐ง๐ฌ๐ฎ๐ฆ๐๐ซ ๐๐๐๐ญ๐จ๐ซ
๐๐ฎ๐ซ๐ฒ๐ ๐๐ข๐ญ๐ซ๐ ๐๐๐๐ข๐ (๐๐๐๐) ๐๐๐๐:ย ๐ณ๐๐ซ๐จ-๐๐๐๐ญ, ๐๐ฎ๐ซ๐ซ๐๐ง๐ญ ๐๐๐ซ๐ง๐ข๐ง๐ ๐ฌ ๐ฆ๐ฎ๐ฅ๐ญ๐ข๐ฉ๐ฅ๐ ๐ซ๐๐๐ฅ๐๐๐ญ๐ฌ ๐๐๐๐ ๐ฎ๐ฉ๐ก๐๐๐ฏ๐๐ฅ, ๐ฆ๐๐ข๐ง๐ญ๐๐ข๐ง ๐ข๐ง ๐ญ๐ก๐ ๐ซ๐๐๐จ๐ฆ๐ฆ๐๐ง๐๐๐ญ๐ข๐จ๐ง ๐ฅ๐ข๐ฌ๐ญ , ๐ ๐๐๐ ๐๐๐ฅ๐ฅ ๐ฐ๐ข๐ญ๐ก ๐๐-๐ ๐๐ ๐๐ญ ๐๐๐๐,๐๐๐/๐ฌ๐ก๐๐ซ๐
Given the latest financial performance of SCMA, we maintain the counter in our recommendation list, both for trading and longer-term investments. We keep the BUY rating with a 12-M Target Price of IDR1,850/share, against yesterday closing of IDR1,200, implying an annual prospect of capital gain of 54%.
We use earnings multiple approach on the annualized earnings estimates to determine target price, given the companyโs zero debt, ย a relatively stable nature of the earnings stream, and the companyโs profile of ย revenue-elasticity during the 2Q20.
We use earnings multiple of 22.8 times that was derived from the average of both the companyโs 5-years historical price-earnings-multiple (at 26.2 x) ย and the currentโs JCI weighted average earnings multiple (at 34.5x), discounted by 25% to factor in deterioration of business climate during the 2H, and arrived at the 12M-TP of IDR1,850.
As at June this year, SCMA reported total gross revenue of IDR2.9tr, representing a decline of 18% YoY, while during 2Q20 reflected a decline of 38% YoY, and – 34%QoQ.ย The main revenue of Television segment, during 1H20 underwent a decrease of 15% YoY to reach IDR2.1tr, while Digital and Out-of-Home advertising grew by 9% YoY to IDR206bn, and Content and others declined by 33% YoY to reach IDR640bn.
However, as cost of revenue being elastic, profitability during the 1H20 improved to 26.9% for operating margin (2Q20: 30.4%, 1H19: 24.3%), and net profit margin at 20.2% (2Q20: 24.4%, 1H19: 21.4%). With the strong balance sheet, the company still has reserve to absorb slightly worse-than-expected business climate deterioration, in our view.
At the other end, yesterday the WTI price closed lower by 1.3% at USD39.3/barrel as compared to the previous Saudi Arabia price cuts for supply to Asia.ย Meanwhile the ย USDIDR ย closedย at IDR14.754 vs. IDR14.792 the previous one.
We advise the following recommendations, for both trading and longer-time investment purpose. ๐๐๐๐, ๐๐๐๐ (๐ฌ๐๐๐ญ๐จ๐ซ ๐จ๐ ๐๐จ๐ณ๐ช, ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ๐ข๐จ๐ง ๐๐ฏ๐ฅ๐ฆ๐ณ๐ธ๐ฆ๐ช๐จ๐ฉ๐ต ), ๐๐๐๐, ๐๐๐๐, ๐๐๐๐, ๐๐๐๐ (๐ฌ๐๐๐ญ๐จ๐ซ ๐จ๐ ๐๐ฐ๐ข๐ญ ๐๐ช๐ฏ๐ช๐ฏ๐จ, ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ๐ข๐จ๐ง ๐๐ข๐ณ๐ฌ๐ฆ๐ต-๐ธ๐ฆ๐ช๐จ๐ฉ๐ต), ๐๐๐๐, ๐๐๐๐, ๐๐๐๐ (๐ฌ๐๐๐ญ๐จ๐ซ ๐จ๐ ๐๐ฐ๐ฏ๐ด๐ถ๐ฎ๐ฆ๐ณ, ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ๐ข๐จ๐ง ๐๐ท๐ฆ๐ณ๐ธ๐ฆ๐ช๐จ๐ฉ๐ต ), ๐๐๐๐ (๐ฌ๐๐๐ญ๐จ๐ซ ๐จ๐ ๐๐ถ๐ต๐ฐ๐ฎ๐ข๐ต๐ช๐ท๐ฆ, ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ๐ข๐จ๐ง ๐๐ข๐ณ๐ฌ๐ฆ๐ต-๐ธ๐ฆ๐ช๐จ๐ฉ๐ต), ๐๐ง๐ ๐๐๐๐, ๐๐๐๐, ๐๐๐๐ (๐ฌ๐๐๐ญ๐จ๐ซ ๐จ๐ ๐๐ณ๐ข๐ฅ๐ฆ, ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ๐ข๐จ๐ง ๐๐ท๐ฆ๐ณ๐ธ๐ฆ๐ช๐จ๐ฉ๐ต),๐๐ง๐ ๐๐๐๐ (๐ฌ๐๐๐ญ๐จ๐ซ ๐จ๐ ๐๐ข๐ด๐ช๐ค ๐๐ฏ๐ฅ๐ถ๐ด๐ต๐ณ๐บ, ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง ๐ฌ๐ฎ๐ ๐ ๐๐ฌ๐ญ๐ข๐จ๐ง ๐๐ข๐ณ๐ฌ๐ฆ๐ต-๐ธ๐ฆ๐ช๐จ๐ฉ๐ต).
Cheers,