Global Market Highlights
DJIA strengthened +1.57% on Thursday (27/04), followed by the S&P500 (+1.96%) and the Nasdaq (+2.43%). Wall Street managed to close higher amid US GDP growth in 1Q23 which amounted to +1.1% QoQ (vs +2% QoQ on consensus), where investors' attention still tends to be focused on the release of earnings in 1Q23 and initial jobless claims as of 22-Apr which drops to 230k (vs 256k before). Today, the market will be looking toward several data releases such as: 1) US PCE Price Index YoY Mar; 2) US Core PCE Price Index YoY Mar; 3) US Michigan Consumer Sentiment Final Apr.
Domestic Update
• The government has decided to reduce the DMO CPO volume target to 300,000 tons/month (vs 450,000 tons/month prior) effective May-2023 accompanied by a reduction in the export quota ratio to 1:4 (vs the previous 1:6). MNCS Comment: As expected, the DMO target was lowered following the period of soaring demand during the month of Ramadan by taking into account the balance between domestic supply and export rights, by increasing the export quota multiplier incentive ratio for producers who supply to Minyakita (to 1:8 to 1:9).
Company News
1. HMSP IJ posted a +12.8% YoY increase in net profit to IDR2.2 trillion in 1Q23 (vs IDR1.9 trillion in 1Q22) (Emiten News). MNCS Comment: The increase in net profit was supported by an increase in revenue +3.1% YoY as the blended ASP increased +7.9% YoY. We also view that aggressive cigarette price adjustments have been quite effective in dampening excise tax increases, with GPM expanding to 18.0% (vs 16.3% in 1Q22). Currently, HMSP is traded at the level of 13.80x/3.93x PER/PBV.
2. BIRD IJ posted a net profit of IDR123.3 billion in 1Q23, or grew significantly +161.5% YoY (vs IDR47.1 billion in 1Q22) (Emiten News). MNCS Comment: The increase in BIRD's net profit was supported by an increase in revenue by +55.2% YoY to IDR1.0 trillion (vs IDR674.0 billion in 1Q22). In addition, efficiency was also created as indicated by expansive margins, where GPM/OPM in 1Q23 was 31.2%/13.9% (vs 25.7%/5.2% in 1Q22). Currently, BIRD is traded at the level of 9.06x/0.83x PER/PBV.
3. FREN IJ reported net loss of IDR380.0 billion in 1Q23 (vs net profit of IDR25 billion in 1Q22) (Emiten News). MNCS Comment: Net loss created on revenue increase +3.6% YoY to IDR2.8 trillion (vs IDR2.7 trillion in 1Q22), along with increased depreciation expense +6.7% YoY and loss on return on investment reached IDR329.2 billion. Currently, FREN is traded at 1.31x PBV.
IHSG Updates
JCI strengthened +0.51% to 6,945.45 on Thursday (27/04), followed by IDR397.63 billion net foreign buy. A number of sectors experienced strengthening and boosted the index rate, led by the technology sector (+1.01%) followed by the infrastructure sector (+0.65%). On the other hand, the sector that led to the decline was the health sector (-0.48%) followed by the financial sector (-0.25%). The strengthening of the index is in line with the majority of Asian bourses, where investors are watching issuer earnings releases. In addition, M2's money supply in Mar-2023 managed to grow +6.2% YoY). The rupiah closed higher at IDR14,703/USD. We estimate that the JCI will move in the price range of 6,869-6,961 pending the release of Foreign Direct Investment 1Q23 data. Today's recommendation: BIRD, EXCL, HRUM, BRIS.
Corporate Actions
Cum Dividend: PRDA (IDR237.85/share), BTPN (IDR76.85/share), AVIA (IDR11/share)
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