Global Market Highlights
The DJIA weakened by -0.47% on Tuesday (23/08), followed by S&P500 (-0.22%) and Nasdaq (0.00%). Wall Street was again decreased, along with negative sentiments, namely: 1) the increased of US T-note 10Y yield to 3.05%; 2) the release of new home sales Jul-22 which declined -12.6% MoM to 511,000 (vs 575,000 on consensus); 3) S&P global manufacturing PMI Flash Aug-22 which fell to a 2-year low of 51.3 points (vs 52 points on consensus). Today, the market will be looking toward several data releases such as: 1) US Durable Goods Order MoM; 2) US Pending Home Sales YoY; 3) US MBA Mortgage Applications.
Domestic Update
• Bank Indonesia (BI) decided to raise the benchmark 7-day reverse repo rate 25 bps to 3.75% at the Board of Governors' Meeting (RDG) Aug-22. MNCS Comment: The interest rate hike is in-line with our forecast as pre-emptive monetary policy to anchor inflation and maintain IDR stability is required. The market responded positively to the policy: JCI +0.78%; yield on 10-year SUN -5 bps and IDR +0.34%.
• Furthermore, the national Covid-19 daily rate had increased by 4,858 active cases (23/08).
Company News
1. MEDC IJ posted a +80.32% YoY revenue growth in 1H22 to USD1.14 billion (vs USD636.29 million in 1H21). Meanwhile, net profit increased significantly by +480% YoY to USD270 million (vs USD46.48 million in 1H21) (Kontan). MNCS Comment: The increase in revenue was in line with the increase in oil and gas exploration and production segment (+100.27% YoY), which contributed 88.03% to the company's total revenue in 1H22. The soaring net profit was in line with the increase in profit from JV (+335.74% YoY) and the increase of GPM and OPM with 52.58% and 33.20%, respectively (vs 36.77% and 6.52%). MEDC is currently traded at the level of 2.30x/0.95x PER/PBV.
2. MAPI IJ posted a +42.3% YoY increase in revenue in 1H22 to IDR6.3 trillion (vs IDR4.4 trillion in 1H21). Meanwhile, net profit rose by +23.5% YoY to IDR10.2 billion (vs IDR8.3 billion in 1H21) (Bisnis Indonesia). MNCS Comment: In 1H22, the number of the company's retail outlets reached 2,837. With this addition, the company's retail outlets have the potential to increase to 3,237 outlets, where this number exceeds the total outlets in pre-pandemic FY19 with 2,615 outlets. We expect outlet expansion to be carried out outside the mall, especially in the F&B segment, thus reaching more consumers and resulting in a positive impact on the company's future income. Currently, MAPI is traded at the level of 8.17x/2.45x PER/PBV.
3. STAA IJ posted a +17.8% YoY revenue growth in 1H22 to Rp2.98 trillion (vs IDR2.53 trillion in 1H21). Meanwhile, net profit increased +76.5% YoY to IDR632 billion (vs IDR358 billion in 1H21) (Bisnis Indonesia). MNCS Comment: The increase in revenue was supported by an increase in the palm oil revenue segment (+16.75% YoY) in line with the increase in CPO ASP (+42.7% YoY) amid declining sales volume (-5.1% YoY). Although GPM shrank to 36.83% (vs 39.21% in 1H21), net profit continued to grow positively as the efficiency of selling expenses decreased -76.52% YoY and lifted OPM and NPM by 32.52% and 21.18%, respectively (vs 25.19% and 14.13% in 1H21). Currently, STAA is traded at the level of 12.16x/3.92x PER/PBV.
IHSG Updates
JCI strengthened by +0.78% to 7,163.26 on Tuesday (23/08), followed by net foreign buy which reached IDR500.27 billion. Almost all sectors strengthened and supported the index, led by the energy sector (+3.30%) followed by the raw materials sector (+1.66%). On the other hand, the sector that experienced weakness was the transportation sector (-0.37%). The index outperformed compared to the weakening Asian markets and Wall Street. Investors positively welcomed the increase in the BI7DRR +25 bps benchmark interest rate to 3.75%, after being maintained for 18 months. These efforts were made in line with preemptive steps to curb future inflation and maintain spread while FFR remains attractive. On the other hand, the Rupiah exchange rate closed higher at IDR14,838/USD. We estimate that JCI will move in the price range of 7,130-7,200 pending the release of M2 Money Supply YoY Jul. Today's recommendation: ARTO, ASSA, BBYB, MYOR.
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