Global Market Highlights
The DJIA rose by +1.04% on Tuesday (13/08), followed by the S&P 500 (+1.68%) and the Nasdaq (+2.43%). Wall Street strengthened as the market responded positively to the slowdown in PPI data for Jul-2024, which was recorded at +0.1% MoM, below consensus estimates at +0.2% MoM. On an annual basis, Jul-2024 PPI also slowed to +2.4% YoY (vs consensus +2.7% YoY). The PPI deceleration served as a positive catalyst and further increased expectations for a rate cut. Today the market will be looking forward to several data releases such as: 1) EA Industrial Production MoM Jun-2024; 2) US Inflation Rate MoM Jul-2024; 3) US Core Inflation MoM Jul-2024.
Domestic Update
Aprindo sees retail industry growth in 2H24 as likely to stagnate after growing by +4.8%-4.9% in 1H24. MNCS Comment: We believe this concern stems from the ongoing trend of weak purchasing power, especially in 1Q24 due to rising prices of essential goods. However, we remain optimistic that the gadget and fashion industries will continue their growth, supported by the festive season in 2H24. We also note that the GDP deflator in 2Q24 recorded a positive figure after three consecutive quarters of negative readings. Along with this development, we see signs of recovery that could support the retail industry going forward.
Company News
1. PGAS IJ signed a Master Sale and Purchase Agreement (MSPA) with PT Donggi-Senoro LNG for the procurement of LNG, lasting until December 31, 2029 (Kontan). MNCS Comment: We view this agreement positively, as it is expected to enhance PGAS's gas supply capabilities, particularly in West Java, South Sumatra, and Central Sumatra. Additionally, a Confirmation Memorandum (CM) was signed for the purchase of one LNG cargo totalling approximately 135,000 m³ (3,159,000 MMBTU) in Sep-2024. We anticipate that the signing of MSPA and CM underscores PGAS's commitment to long-term resource stability, which will strengthen the company’s performance in the future. PGAS is currently trading at 5.01x/0.87x PER/PBV.
2. PPGL IJ will distribute an interim dividend of IDR3.5 billion or the equivalent of IDR4.5/share (Emiten News). MNCS Comment: We estimate a potential yield of approximately ~4.2% with a payout ratio of 66.4% of total net profit as of 1H24. Cum dividend in the regular market and negotiated market is on 20 Aug-24. Additionally, the company posted a net profit of IDR5.3 billion (+2.4% YoY) in line with an increase in revenue of +3.7% YoY in 1H24. PPGL is currently trading at 7.21x/1.10x PER/PBV.
3. MYOR IJ reported an increase in net profit to IDR1.7 trillion (+40.9% YoY) in 1H24 (Emiten News). MNCS Comment: This increase in net profit was attributed to a +9.5% YoY increase in revenue to IDR16.2 trillion (vs IDR14.8 trillion in 1H23), driven by the growths in both local and export sales. Additionally, the company recorded a +99.7% YoY growth in interest income, a foreign exchange gain of IDR172.2 billion (vs a loss of IDR226.3 billion in 1H23), and a -35.4% YoY decline in interest expenses in 1H24. As a result, NPM increased from 8.2% to 10.6% in 1H24. MYOR is currently trading at 16.92x PER.
IHSG Updates
The JCI climbed by +0.81% to 7,356.64 on Tuesday (13/08), followed by a net foreign inflow of IDR484.14 billion. Most sectors strengthened and supported the index, led by the consumer cyclicals sector (+2.99%) and followed by the transportation & logistic sector (+2.30%). Meanwhile, the industrials sector corrected (-0.51%). The index rallied along with most Asian indices, following the positive performance of Japan’s PPI in Jul-2024 (0.3% MoM/3% YoY). The Rupiah closed higher to IDR15,833/USD. We estimate that the JCI will move in the price range of 7,308-7,400. Today's recommendations: ACES, ICBP, MAPI, SMGA.
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