Global Market Highlights
The DJIA rose by +0.69% on Tuesday (04/23), followed by S&P 500 (+1.20%) and Nasdaq (+1.59%). Wall Street continued to strengthen as UST yields declined and the earnings releases of companies were positively received. The decrease in UST yields to 4.6% was triggered by the PMI Manufacturing Flash in Apr-2024, which fell to 49.9, lower than the consensus expectation of 52. Today the market will be waiting for several data releases, including: 1) Australia Inflation Rate YoY 1Q24; 2) US Durable Goods Orders MoM Mar-2024; 3) US Crude Oil Stocks Change 19-Apr.
Domestic Update
The High-Calorie Coal Reference Price (HBA) for Apr-2024 increased by +10.35% MoM to USD121.13 per ton (vs USD109.77 per ton in Mar-2024). MNCS Comment: We see that the rise in HBA in Apr-2024 is in line with the increase in global commodity prices, driven by rising demand. Furthermore, we assess that the increase in demand is due to buyers securing supply ahead of the potential La Nina, which usually brings production declines. On the other hand, the Low-Calorie HBA (4,100 kcal/kg GAR) decreased to USD57.17 per ton (vs USD56.83 per ton previously). We anticipate the stability of Low-Calorie HBA to support manageable input costs and maintain margin levels for cement companies onwards.
Company News
1. AALI IJ budgets a capex up to IDR1.4 trillion in FY24 (Kontan). MNCS Comment: We note that the company maintains the same capex budget as in FY23 at IDR1.4 trillion, where the realization was at IDR1.23 trillion. The company will allocate 42%-50% of the budgets for replanting while the rest will be utilized for maintenance and replacement of transportation and equipment. The company recorded a drop in revenue -4.96% YoY in FY23, driven by the CPO and its derivative segment (-2.05% YoY) and the Palm Kernel and its derivative line (-31.20% YoY). Additionally, the increased selling expenses (+5.64% YoY) also contributed to a -38.85% YoY decline in net income. AALI is currently trading at 12.08x/0.57x PER/PBV.
2. HMSP IJ will distribute dividends for FY23 amounting to IDR8.06 trillion, or equivalent to IDR69.3 per share (Kontan). MNCS Comment: HMSP's DPS for FY23 is slightly below our estimate, but still reflects a yield potential of ~8%. Furthermore, the DPR stands at 99.6%, lower than FY22 at 100.6%. We assess the lower DPR as HMSP secures capex to support the quite massive expansion of SKT facilities this year. HMSP is currently trading at 12.28x/3.33x PER/PBV.
3. MTLA IJ aims for IDR1.9 trillion marketing sales in FY24 (Kontan). MNCS Comment: As strategic efforts to achieve this goal, the company plans to launch new products with the Eco Living in Harmony concept and innovate digital marketing strategy. In 1Q24, the company has obtained IDR438 billion of marketing sales or 23.05% of its target. Annually in FY23, the company booked +23.12% YoY revenue growth and +5.64% YoY increase in net income, supported by the real estate segment (+28.26% YoY), the hotel revenue (+16.24% YoY) and the other operating revenues (+7.16% YoY). MTLA is currently trading at 6.97x/0.56x PER/PBV.
IHSG Updates
The JCI strengthened by +0.52% to 7,110.81 on Tuesday (23/04), amidst a net foreign sell of IDR127.91 billion. Most sectors climbed and moved the index up, led by the energy sector (+1.26%) and followed by the consumer cyclicals sector (+1.12%). Conversely, the transportation & logistic sector led the loss (-0.49%) and followed by the basic materials sector (-0.39%). The index rebounded along with the majority of the other Asian markets, following easing Middle East tensions. The Rupiah closed higher at IDR16,220/USD. We estimate that the JCI will move in the price range of 7,056-7,162. Today's recommendations: ACES, BRIS, HRUM, PTBA.
Corporate Actions
AGSM: HRTA, UNTR, PTPP
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