MNCS Morning Navigator

25 Agustus 2022

MNCS Morning Navigator August 25, 2022

Global Market Highlights
The DJIA strenghtened by +0.18% on Wednesday (24/08), followed by the S&P500 (+0.29%) and the Nasdaq (+0.41%). Wall Street managed to rebound, as investors watched the release of Durable Goods Orders Ex Transp data on Jul-22 which grew +0.3% MoM, higher than the consensus at +0.2% MoM. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ 2nd Est; 2) Germany Ifo Business Climate Aug; 3) Germany GDP Growth Rate YoY Final Q2.

Domestic Update
• Money supply in a broad sense (M2) in July 2022 grew positively at +9.6% YoY. MNCS Comment: Despite slowing down from Jun-22 which grew +10.6% YoY, M2 growth in Jul-22 was supported by Jul-22 lending which grew +10.5% YoY and contraction in net bills to government -11.0 % YoY (vs -14.0% YoY in Jun-22).
• Furthermore, the national Covid-19 daily rate had increased by 5,428 active cases (24/08).

Company News
1. EXCL IJ posted a +8.48% YoY revenue growth in 1H22 to IDR14.07 trillion (vs IDR12.97 trillion in 1H21). Meanwhile, net profit decreased by -14.11% YoY to IDR614.91 billion (vs IDR715.96 billion in 1H21) (Market Bisnis). MNCS Comment: The increased revenue was driven by the growth of data revenue and data services segment by +9.02% YoY. Meanwhile, the decline in the company's net profit was in line with the increase in interconnection expenses by +66.21% and reducing the company's PBT by -13.56% YoY. Currently, EXCL is traded at the level of 23.28x/1.42x PER/PBV.
2. AVIA IJ targeted the construction of the third factory to start in 2H22 which then is going to be operated in FY25F. The allocation of capex for the expansion of the factory is IDR750 billion (Kontan). MNCS Comment: The existing two factories have a capacity of 285,000 metric tons/year, and through the addition of a third factory with a capacity of 225,000 metric tons/year, the company's total capacity in FY25F will reach 510,000 metric tons/year. Currently, AVIA is traded at the level of 35.68x/5.87x PER/PBV.
3. MPPA IJ recorded a revenue growth in 1H22 of +4.80% YoY to IDR3.71 trillion (vs IDR3.54 trillion in 1H21). Meanwhile, net loss increased to IDR158.60 billion (vs IDR91.50 billion in 1H21) (Market Bisnis). MNCS Comment: The increase in revenue was in line with the increase in retail sales segment revenue +6.70% YoY, supported by online sales which contributed 6.58% of the company's revenue in 1H22. Meanwhile, the net loss widened as selling expenses and general expenses increased by +30.79% YoY/+26.91% YoY which resulted in an operating loss of IDR80.12 billion (vs operating profit in 1H21: IDR50.41 billion). Currently, MPPA is traded at the level of 3.74x PBV.

IHSG Updates
JCI strengthened by +0.44% to 7,194.70 on Wednesday (24/08), followed by net foreign buy which reached IDR820.99 billion. The majority of sectors strengthened and supported the index's pace, led by the technology sector (+2.33%) followed by the energy sector (+0.84%). On the other hand, the weakening sectors were the transportation sector (-0.42%) followed by the non-cyclical sector (-0.37%). JCI continued its strengthening amid the contracting Wall Street and Asian markets. We see that the index movement was still influenced by a positive catalyst, namely the raising of the BI7DRR benchmark interest rate as a pre-emptive step to curb future inflation. In addition, investors were also watching the release of M2 money supply data on Jul-22 which grew +9.6% YoY. On the other hand, the Rupiah exchange rate closed lower at IDR14,848/USD. We estimate that the JCI will move in the price range of 7,130-7,200. Today's recommendation: ANTM, ITMG, TBIG, BBRI.

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