MNCS Morning Navigator

18 April 2024

MNCS Morning Navigator April 18, 2024

Global Market Highlights
The DJIA fell by 0.12% on Wednesday (17/04), followed by the S&P 500 (-0.58%) and Nasdaq (-1.15%). Continued contraction on Wall Street came as investors focused on the Fed Beige Book and potential sentiment increases from the Middle East, which weighed on the indices. Meanwhile, crude oil reserves as of 12-Apr-24 reached 2.74 million bbl, down from the previous period of 2.84 million bbl, but still within consensus expectations of 1.6 million bbl. Today the market will be waiting for several data releases, including: 1) Japan BoJ Noguchi Speech; 2) US Existing Home Sales Mar-2024; 3) US Initial Jobless Claims 13-Apr’24.

Domestic Update
Moody’s maintained Indonesia’s rating at Baa2 with a stable outlook. MNCS Comment: We believe the maintained rating reflects Indonesia’s positive economic resilience amid potential escalation of geopolitical conflict in the Middle East. This could provide a buffer for foreign direct investment (FDI) targets and strengthen investor confidence. We expect this could cushion the exchange rate going forward, considering the weakness occurring in the financial markets.

Company News
1. TINS IJ aims for 70%-75% YoY of revenue growth in FY24 (Kompas). MNCS Comment: Management is optimistic to reach this target supported by the rising price of global tins (+27% YTD growth) and the increasing production target from the company at 30,000 metric tons (vs 26,000 metric tons in FY23). The confidence to add its production is justified by signs of demand recovery in the electronics sector, where tin is extensively used. The company recorded a revenue of IDR8.39 trillion (-32.89% YoY) and a net loss of IDR449.69 billion (-143.18% YoY) in FY23. TINS is currently trading at level 1.15x PBV.
2. ASII IJ reported 4W sales realization in 1Q24 reaching 119.6k units (Kontan). MNCS Comment: ASII's 4W sales experienced a -20.2% YoY decline. We also noted ASII’s market share in 3M24 was 55.6%, down from the 2M24 period at 56.5%. We believe this decline aligns with industry performance, affected by rising interest rates and sentiment from brand producers. However, looking ahead, we anticipate several automotive events that could serve as a buffer for ASII's 4W sales. ASII is currently trading at 6.13x/1.04x PER/PBV.
3. BDKR IJ posted a revenue of IDR613.4 billion (+28.85% YoY) in FY23 (Kontan). MNCS Comment: This sales growth was supported by the increase in both the rental segment (+68.87% YoY) and the construction services line (+2.43%). Followed with manageable cost of revenues (+12.66% YoY), opex (+12.96% YoY), and finance costs (+19.75% YoY), the company successfully booked a net income of IDR79.3 billion (+36.63%) with a NPM of 12.93% (vs 12.17% in FY22). BDKR is currently trading at 32.51x/3.29x PER/PBV.

IHSG Updates
The JCI weakened by -0.47% to 7,130.84 on Wednesday (17/04), followed by a net foreign sell of IDR470.58 billion. All sectors plummeted and pressured the index, led by the basic materials sector (-2.48%) and followed closely by the technology sector (-2.42%). The index continued to slow down amidst positive outcome of retail sales for Feb-2024, which spiked sharply to 6.4% YoY (vs 1.1%/1.2% YoY Jan-2024/forecast). Meanwhile, the other Asian markets closed mixed, as investors digest mixed results from several macroeconomic data releases. The Rupiah continued to close lower at IDR16,220/USD. We estimate that the JCI will move in the price range of 7,091-7,194. Today's recommendations: ACES, AGII, AMMN, BRIS.

Corporate Actions
Cum Dividend: BJBR (IDR95.05/share), CNMA (IDR8/share)

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