MNCS Morning Navigator

02 Agustus 2022

MNCS Morning Navigator August 2, 2022

Global Market Highlights
The DJIA weakened by -0.14% on Monday (01/08), followed by the S&P 500 (-0.28%) and the Nasdaq (-0.18%). The negative sentiment came from the release of the ISM Manufacturing PMI Jul-22 data which was expansionary but slowed at the level of 52.8 points (vs 53 points in Jun-22). Today, the market will be looking toward several data releases such as: 1) US Fed Evans Speech; 2) US Redbook YoY; 3) UK Nationwide Housing Prices YoY.

Domestic Update
Indonesia's inflation rose +4.94% YoY on Jul-22, highest since Oct-15. However, core inflation rose +2.86% YoY. MNCS Comment: Although core inflation remained manageable, the spread between core inflation and 7-day reverse repo fell and was far below the 5-year historical average of 200bps. We view that BI will raise the benchmark interest rate as a pre-emptive measure to anchor inflation.
Furthermore, the national Covid-19 daily rate had increased by 3,696 active cases (01/08).

Company News
1. ASII IJ had realized the allocation of capex in 1H22 to be worth IDR7.6 trillion. The allocated capex is intended for heavy equipment shopping needs of PAMA entities, renovations, development of automotive dealerships to digital investments. In 1H22, the majority of capex would be used for routine capital expenditures and company investment (Kontan). MNCS Comment: Up to 1H22, the capex realization was 38.00%-42.22% of the target in FY22E of IDR18-20 trillion. The capital expenditure target in FY22E is higher than FY21 at IDR11-12 trillion, in line with the economic recovery after the pandemic and the business climate that supports the company's expansion plans. ASII is currently traded at the level of 7.21x/1.43x PER/PBV.
2. KLBF IJ posted +12.12% YoY revenue growth in 1H22 to IDR13.87 trillion (vs IDR12.37 trillion in 1H21). Meanwhile, net profit grew +9.39% YoY to IDR1.63 trillion (Kontan). MNCS Comment: The revenue growth was supported by the increase in all revenue segments, especially the distribution and logistics division which grew +16,81% YoY. Despite the growth in performance, the company's margins experienced a decline where GPM, OPM and NPM were 41.79%, 15.69%, 11.80%, respectively (vs. 43.63%, 16.12%, 12.10% in 1H21) . This was in line with the increase in COGS (+12.16% YoY) and selling expenses +7.98% YoY. Currently, KLBF is traded at the level of 22.69x/3.90x PER/PBV.
3. BBHI IJ recorded a net interest income growth of +306.2% YoY in 1H22 to IDR217.53 billion (vs IDR53.47 billion in 1H21). Meanwhile, net profit grew +557% YoY to IDR150.62 billion (vs IDR22.93 billion in 1H21) (CNBC Indonesia). MNCS Comment: We see that this positive performance was supported by credit growth of +654.96% YoY, as well as commission income which increased significantly from IDR642 million in 1H21 to IDR118.01 billion. Currently, BBHI is traded at the level of 12.72x PBV.

IHSG Updates
JCI strengthened by +0.25% to 6,968.78 on Monday (01/08), followed by net foreign buy which reached IDR902.58 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+1.86%) followed by the raw materials sector (+0.99%). On the other hand, the sector that experienced weakness was led by the health sector (-1.38%) followed by the technology sector (-0.77%). The index's gain occurred amid the release of RI inflation data on Jul-22 which reached +4.94% YoY (vs +4.35% in Jun-22) and exceeded the consensus estimate of +4.82% YoY. The positive catalyst came from the release of Markit's PMI version which grew expansively to the level of 51.3 points (vs 50.2 points in Jun-22). On the other hand, the Rupiah exchange rate closed lower at IDR14,873/USD. We estimate that the JCI will move in the price range of 6,930-7,000. Today's recommendation: ANTM, ASSA, BBYB, INCO.

Corporate Action
Cum Dividend: PGLI (IDR1/share), AMAN (IDR0.1/share)
IPO: RCCC (IDR135/share)

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