Global Market Highlights
The DJIA rose by +0.61% on Wednesday (14/08), followed by the S&P 500 (+0.38%), while the Nasdaq relatively flat (+0.03%). Wall Street continued to strengthen as the slowdown in inflation data for Jul-2024 heightened expectations for a rate cut. Inflation in Jul-2024 was recorded at +0.2% MoM/+2.9% YoY (vs consensus at +0.2% MoM/+3.0% YoY). Meanwhile, core inflation for Jul-2024 was also in line with consensus expectations at +0.2% MoM/+3.2% YoY. Today the market will be looking forward to several data releases such as: 1) Japan GDP Growth Rate Prel 2Q24; 2) China Retail Sales YoY Jul-2024; 3) US Retail Sales MoM Jul-2024.
Domestic Update
Domestic electric vehicle (EV) sales reached 17,826 units by 7M24, marking a +157.3% YoY increase. MNCS Comment: We note that electric vehicle (EV) sales contributed 3.7% of total wholesales up to 7M24, higher than the 1.2% contribution recorded in 7M23. We believe this increase was driven by the launch of several new models from entrants like the BYD Seal and Chery Omoda E5. With the potential launch of new models, the continued implementation of the 1% VAT policy, and ongoing infrastructure development, we expect EV performance to improve further in the future.
Company News
1. INKP IJ booked a top-line of USD1.6 billion (-17.0% YoY) in 1H24 (Emiten News). MNCS Comment: This performance was in line with the decline in all business segments. Despite COGS decreasing at a moderate level (-14.5% YoY), gross profit declined by -21.5% YoY to USD538.5 million, pressuring GPM to 33.6% in 1H24 (vs 35.5% in 1H23). However, the bottom-line grew by +3.8% YoY with a margin of 17.4% (vs 13.9% in 1H23), bolstered by a foreign exchange gain of USD90.0 million (vs a loss of USD62.6 million in 1H23), the increase in interest income (+113.4% YoY), and a decrease in interest expense (-3.9% YoY). INKP is currently trading at 4.99x/0.44x PER/PBV.
2. FIRE IJ reported a significant increase in net profit of +235.7% YoY to IDR18.4 billion in 1H24 (vs a loss of IDR13.4 billion in 1H23) (Emiten News). MNCS Comment: The substantial rise in net profit was driven by a +150.1% YoY increase in revenue to IDR224.3 billion (vs IDR89.7 billion in 1H23). Despite COGS growing by +77.0% YoY, FIRE successfully implemented cost-efficiency measures, resulting in a +2985.5% YoY increase in gross profit. Furthermore, margins expanded significantly and marked a turnaround, with GPM/OPM rising to 31.0%/11.4% (vs 2.5%/-17.8% in 1H23). FIRE is currently trading at 3.96x/0.63x PER/PBV.
3. ITMG IJ recorded a decline in net profit to USD129 million (-58.0% YoY) in 1H24 (Emiten News). MNCS Comment: The decrease in net profit was attributed to a -19.2% YoY decline in revenue to USD1.0 billion in 1H24 (vs USD1.3 billion in 1H23), driven by a reduction in coal sales. Additionally, selling expenses grew by +30.4% YoY to USD83.1 million (vs USD63.7 million in 1H23) and the company recorded a foreign exchange loss of USD20.8 million in 1H24 (vs a gain of USD4.1 million in 1H23). As a result, NPM was pressured from 23.6% to 12.3% in 1H24. ITMG is currently trading at 7.01x/1.02x PER/PBV.
IHSG Updates
The JCI rose by +1.08% to 7,436.04 on Wednesday (14/08), followed by a net foreign buy of IDR577.93 billion. Most sectors gained and drove the index up, led by the consumer cyclicals sector (+3.42%) and followed by the infrastructures sector (+1.51%). Meanwhile, the properties & real estate sector saw a decline (-0.25%). The index outperformed amidst mixed Asian indices, following the solid foreign inflow and resilient Rupiah exchange. Additionally, the market is anticipating a positive growth in Indonesian balance of trade for Jul-2024, with a consensus of USD2.45 billion (vs USD2.39billion in Jun-2024). The Rupiah strengthened to IDR15,678/USD. We estimate that the JCI will move in the price range of 7,401-7,454. Today's recommendations: ANTM, BBCA, PTBA, SIDO.
Corporate Actions
EGMS: GIAA, IBST
Cum Dividend: MARK (IDR20/share)
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