Global Market Highlights
The DJIA dropped by -0.98% on Thursday (04/25), followed by S&P 500 (-0.46%) and Nasdaq (-0.64%). Wall Street contracted as UST yields rose to 4.7%, responding to the release of initial jobless claims data as of 20-Apr, which remained solid at 207k (vs 212k previously). Additionally, the release of pending home sales data in Mar-2024, growing by +3.4% MoM, also contributed to the strengthening of UST yields. Today the market will be waiting for several data releases, including: 1) Japan BoJ Interest Rate Decision; 2) US Core PCE Price Index Mar-2024; 3) US Michigan Inflation Expectations Final Apr-2024.
Domestic Update
The Indonesian Retail Association (APRINDO) assesses the recent scarcity of granulated sugar due to limited supply triggered by distribution slowdowns. Additionally, the spread between the selling price and the reference price of IDR16,000/kg has led distributors to withhold product distribution. MNCS Comment: We expect domestic sugar prices to gradually recover in the next 1-2 months, as normalization of the supply chain improves product availability. Furthermore, we believe the transition to the La Nina climate can boost the productivity levels of national sugar production. We anticipate that the normalization of sugar prices will reduce input costs for several consumer companies within our universe such as SIDO.
Company News
1. PTPP IJ signed a new contract worth IDR4.9 trillion in 1Q24 (Kontan). MNCS Comment: We view the relocation of capital city to IKN should bode well with the company’s performance in FY24, where the company has obtained +12.29% YoY IKN projects as of 1Q24, compared to the total revenue in 1Q23 (IDR4.3 trillion). Additionally, management claimed that some other new projects are undergoing tender process and are expected to meet agreement by 2Q24. PTPP is currently trading at 5.44x/0.22x PER/PBV.
2. UNVR IJ recorded a net profit increase of +3.1% YoY in 1Q24 to IDR1.4 trillion (Market Bisnis). MNCS Comment: The increase in net profit occurred amid a decrease in revenue of -5.0% YoY to IDR10.1 trillion (vs IDR10.6 trillion in 1Q23), as domestic sales declined by -4.7% YoY. Meanwhile, the increase in net profit was supported by OPEX efficiency (-6.6% YoY) and a decrease in financial expenses (-40.8% YoY). Margins experienced improvement, with UNVR's GPM/NPM rising to 49.9%/14.4% in 1Q24 (vs 49.3%/13.3% in 1Q23). UNVR is currently trading at 17.38x/20.79x PER/PBV.
3. ASGR IJ will distribute a final dividend of IDR34/share for FY23 (Emiten News). MNCS Comment: After interim dividend distribution Oct-2023 to IDR17.53 billion or IDR13/share, we estimate the total DPS in FY23 is IDR47/share (total shared dividend IDR63 billion) and this final dividend distribution will offer a potential yield of 5.73%. Dividend payout ratio FY23 is higher than FY22 at 44.76% (vs 40.28% in FY22). ASGR is currently trading at 7.79x/0.61 PER/PBV.
IHSG Updates
The JCI declined by -0.27% to 7,155.29 on Thursday (25/04), followed by a significant net foreign sell of IDR1.30 trillion. Most sectors were corrected and weighed the index down, with the transportation & logistic sector leading the loss (-1.14%) and followed closely by the financial sector (-1.13%). Meanwhile, some sectors moved against the index, led by the consumer non-cyclicals sector (+1.55%) and followed by the healthcare sector (+0.89%). The index stumbled as investors seemed to still digest BI’s decision to increase the interest rate on the previous day. The other Asian markets closed mixed as markets turn their attention to the upcoming BoJ’s interest decision. The Rupiah closed lower at IDR16,188/USD. We estimate that the JCI will move in the price range of 7,137-7,168. Today's recommendations: ARTO, DOID, EXCL, UNVR.
Corporate Actions
AGMS: AUTO, TOBA
Cash Dividend: IDR165.97/Share
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