MNCS Morning Navigator

02 April 2024

MNCS Morning Navigator April 2, 2024

Global Market Highlights
The DJIA slid -0.60% on Monday (01/04), followed by the S&P 500 (-0.20%), while Nasdaq surged in the morning session before retreating back to only see a +0.11% gain. Stocks were subdued on surging 10-yr UST yields (+12,5 bps) on a stronger-than-expected US Mar ISM Manufacturing Index which rose +2.5 to 50.3 as opposed to a moderate estimate of 48.3. Still, investors remain fixated on a 59% likelihood of Fed cuts to happen in Jun-24’s FOMC on cooler-than-expected US Feb-24 PCE core deflator at +2.8% YoY (vs the expected +2.9% YoY). Today, the market will await several data releases, including: 1) US JOLTs Job Openings Feb-2024; 2) US Factory Orders MoM Feb-2024; 3) Germany Inflation Rate YoY Prel Mar-2024.

Domestic Update
BPS reported that the inflation rate in Mar-2024 increased by +3.05% YoY/+0.52% MoM. Meanwhile, the core inflation rate recorded +1.77% YoY/+0.23% MoM. MNCS Comment: We note that the inflation rate in Mar-2024 is above the consensus estimate and the Feb-2024 period, which was +2.91% YoY/+2.75% YoY, respectively. We observe that the expansive inflation rate is mainly influenced by the food, beverage, and tobacco group with an inflation rate of +7.43% YoY (contribution of 2.09%). The increase in the inflation rate of this group is mainly driven by the rise in the prices of rice, chicken meat, and red chili, in line with the Ramadan festive season momentum. Going forward, we assess that the inflation rate has the potential to cool down as a result of the moderation in several staple food prices, supported by the harvest season and the government's expectation of importing food commodities.

Company News
1. ANTM IJ recorded a decline in net profit of -19.5% YoY to IDR 3.07 trillion in FY23 (Kontan). MNCS Comment: This represents 90.1% of our FY23 net profit estimate. The decline in the bottom line was in line with a decline in revenue of -10.6% YoY, weighed down by weakness in the gold segment (-17.4% YoY) despite growth in the nickel ore segment (+60.9% YoY). OPM/NPM of 6.4%/7.5% was below our expectations (10.3%/9.3%) as COGS fell (-7.9% YoY) more moderately than revenue. ANTM is currently trading at 12.3x/1.24x PER/PBV.
2. ERAA IJ recorded a net profit in FY23 reaching IDR826.0 billion, or a decrease of -18.4% YoY (vs IDR1.0 trillion in FY22) (Emiten News). MNCS Comment: The net profit achievement in FY23 is in line with our estimate, reflecting 97.7% of the FY23 target. The decrease in net profit amidst a revenue increase of +21.6% YoY (reflecting 100.3% of the FY23 run-rate), mainly due to a +27.9% YoY increase in OPEX followed by a financial expense reaching +107.5% YoY. Margins experienced a decline, with OPM/NPM in FY23 at 3.1%/1.4% (vs 3.6%/2.0% in FY22). ERAA is currently trading at 8.53x/0.96x PER/PBV.
3. MPXL IJ reported a +56.82% YoY growth of net income, reachingIDR9.43 billion in FY23 (Kontan). MNCS Comment: The increase in bottom-line is driven by a revenue growth of +19.91% YoY, amounting to IDR140.26 billion (vs IDR116.97 billion in FY22). The material sales and expedition services segments increased by +20.40% and +19.20% YoY, respectively, constituting 59.25% and 40.75% of total income. This growth is primarily supported by new contracts for IKN development and PLTU projects. MPXL is currently trading at 3.20x PBV.

IHSG Updates
The JCI slumped by -1.15% to 7,205.06 on Monday (01/04), followed by a significant net foreign sell of IDR1.52 trillion. Most sectors fell and pressured the index, led by the financial sectors (-2.70%) and followed by the transportation & logistic sector (-1.57%). Meanwhile, the basic materials sector was the only sector that moved against the index (+0.36%). The index weakened amid mixed performance in Asian markets, as investors scrutinized the inflation data released in Mar-2024, which exceeded consensus estimates. Additionally, investors are a wait and see ahead of the release of US labor market data, which impacts expectations for a rate cut by the Fed. The Rupiah closed lower at IDR15,890/USD. We estimate that the JCI will move in the price range of 7,159-7,224. Today's recommendations: AMMN, MDKA, PGAS, UNTR.

Corporate Actions
Cum Dividend: BDMN (IDR125.48/share)

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