The JCI July 6, 2020

Jᴜʟʏ 6, 2020

* Tʜᴇ JCI ᴛʀᴀᴅɪɴɢ ʀᴀɴɢᴇ:  4,950ᴘᴛ – 5,050ᴘᴛ  ( Fʀɪᴅᴀʏ ᴄʟᴏsᴇ: 4,974ᴘᴛ )

* Wᴀʟʟ Sᴛʀᴇᴇᴛ ᴄʟᴏsᴇᴅ ɴ ᴘᴜʙʟɪᴄ ʜᴏʟɪᴅᴀʏ Fʀɪᴅᴀʏ ʟᴀsᴛ ᴡᴇᴇᴋ (4/7)

*Tʜᴇ JCI ɪs ᴇxᴘᴇᴄᴛᴇᴅ ᴛᴏ ʜᴏᴠᴇʀ ᴘᴏsɪᴛɪᴠᴇʟʏ sᴜᴘᴘᴏʀᴛᴇᴅ ʙʏ sᴛᴀʙʟᴇ USDIDR ᴀɴᴅ ᴏɪʟ ᴄʟᴏsᴇ ᴛᴏ sʟɪɢʜᴛʟʏ ᴇxᴛᴇɴᴅ ɢᴀɪɴs

Morning,

The Jakarta Composite Index (JCI) today (6/7) is expected to be in the range of 4,950pt – 5,050pt mainly supported by stable close of USDIDR and oil price   Meanwhile, last day trading in Wall Street last week (3/7)  the  DJIA  ended higher by 92 points or 0.4%  at 25,827pt,  while the S&P500 and the Nasdaq both ended higher by  0.5%. The United States (US) government released June employment data that came with 4.9mn jobs creation as opposed to the 2.9mn jobs by economists’  estimates. US stock futures traded slightly higher by some 0.3% this morning as Wall Street tried to build on the momentum from last week’s solid performance.

*

ALERT :  TIGA PILAR SEJAHTERA FOOD (AISA) _ʟᴀsᴛ ᴄʟᴏsᴇ IDR168

Sᴇʀɪᴇs ᴏғ ᴄᴏʀᴘᴏʀᴀᴛᴇ ᴀᴄᴛɪᴏɴs sɪɴᴄᴇ Jᴜʟʏ 2018 ᴍᴀʏ ʟᴇᴀᴅ ᴛᴏ ᴛʜᴇ ᴄᴏᴜɴᴛᴇʀ ᴛᴏ ʀᴇsᴜᴍᴇ ᴛʀᴀᴅɪɴɢ sᴏᴏɴᴇsᴛ

𝐏𝐨𝐬𝐢𝐭𝐢𝐯𝐞 𝐦𝐨𝐦𝐞𝐧𝐭𝐮𝐦 𝐝𝐞𝐬𝐩𝐢𝐭𝐞 𝐨𝐟 𝐨𝐮𝐫 𝐞𝐬𝐭𝐢𝐦𝐚𝐭𝐞𝐝 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐥𝐨𝐬𝐬 𝐭𝐡𝐢𝐬 𝐲𝐞𝐚𝐫

Based on last year organic capacity of Food Manufacturing division (Snacks and Noodle),and applying growth rate of Indonesia snacks industry of 8%, we have a estimate of operating loss for AISA this year. We forecast total net sales for this year in the amount of IDR1.6tr (2019:IDR1.5tr), while gross profit of IDR473bn (2019: IDR447.6bn), and with the absence of Other Income, we came in with an estimated Operational Loss of IDR266.7bn (2019: profit of IDR1.5tr). All-in-all, last year, AISA booked a net profit of IDR1.1tr (2018: loss of IDR123.5bn ), as the company recorded a total Other Income of IDR1.9tr from (1) receivables recovery in the amount of IDR990bn, and (2) difference from Sukuk’s restructuring program of IDR903bn.  At the other end, last year AISA debt position was of IDR888bn, while total equity was in deficits of IDR4.4tr.

Last year also saw the elimination of significant contributor of Rice Division to total revenue as the company’s  subsidiary Dunia Pangan and its subsidiaries had been declared bankrupt in May 2019. We expect the company to boost revenue growth to offset the missing contribution of Rice Division, along with the plan of raising of new equities as well as the installation of new management team.

The recovery of receivables, the sukuk restructuring, the appointment of new team, the raising of new equities were part of AISA’s corporate actions following  an unusual turmoil happened during the company’s Annual General Shareholders Meeting on July 2018 that prompted the Indonesia Exchange to suspend the company trading on July 4 at the last closing price of IDR168. Since then, with Public owns some 60% of the company’s stake, stakeholders were nervously watching the progress of the matter.

The latest news in the public was that AISA’s is in the last stage of fulfilling its financial and administrative obligation to the Indonesia Exchange, with the management has been upbeat on the coming result.

Should AISA be allowed  back trading after two years in suspension, this should set a positive precedent in the country ‘s capital market for prove that investors’ may rely on corporate’s  responsible acts.

*

At the other end, Friday last week  the WTI price fell by 0.8% to  close lower at USD40.3/barrel, mainly on investors’ fear on coronavirus resurgence.  Meanwhile the  USDIDR  closed  at IDR14.566  vs. IDR14.516 the previous one.

We advise the following recommendation as for now, for both trading and longer-time investment purpose. 𝐀𝐀𝐋𝐈, 𝐋𝐒𝐈𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘈𝘨𝘳𝘪, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘜𝘯𝘥𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐔𝐍𝐓𝐑, 𝐈𝐓𝐌𝐆, 𝐀𝐃𝐑𝐎, 𝐏𝐓𝐁𝐀 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘢𝘭 𝘔𝘪𝘯𝘪𝘯𝘨, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵), 𝐆𝐆𝐑𝐌, 𝐔𝐍𝐕𝐑, 𝐈𝐂𝐁𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘯𝘴𝘶𝘮𝘦𝘳, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐀𝐒𝐈𝐈 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘈𝘶𝘵𝘰𝘮𝘢𝘵𝘪𝘷𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵), 𝐚𝐧𝐝 𝐀𝐂𝐄𝐒, 𝐒𝐂𝐌𝐀, 𝐌𝐀𝐏𝐈 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘛𝘳𝘢𝘥𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵),𝐚𝐧𝐝 𝐓𝐊𝐈𝐌 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘉𝘢𝘴𝘪𝘤 𝘐𝘯𝘥𝘶𝘴𝘵𝘳𝘺, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵).

Cheers,