MNCS Morning Navigator

30 Agustus 2022

MNCS Morning Navigator August 30, 2022

Global Market Highlights
DJIA weakened -0.57% on Monday (29/08), followed by S&P500 (-0.67%) and Nasdaq (-1.02%). Wall Street was under pressure as the Fed's hawkish statement at the Jackson Hole Symposium yesterday. In addition, the increase in US T-note 10Y yield to the level of 3.13% also weighed on Wall Street's movement. Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence Aug; 2) US House Price Index MoM Jun; 3) Germany Inflation Rate YoY Prel Aug.

Domestic Update
• The government will prepare social assistance for the transfer of fuel subsidies worth IDR24.17 trillion. MNCS Comment: This effort is done to maintain people's purchasing power amid the potential price increase for subsidized fuel.
• Furthermore, the national Covid-19 daily rate had increased by 2,871 active cases (29/08).

Company News
1. ADMR IJ posted a +165% YoY revenue growth in 1H22 to USD435.65 million (vs USD164.15 million in 1H21). Meanwhile, net profit jumped by +490% YoY to USD202.00 million (vs USD34.18 million in 1H21) (Kontan). MNCS Comment: Revenue growth was supported by: 1) increase in sales volume by +9% YoY; 2) increase in ASP by +143% YoY. The increase in the company's net profit was in line with widening margins, where GPM and OPM were recorded at 65.97% and 62.60%, respectively (vs 37.64% and 30.87% in 1H21). ADMR is currently traded at the level of 11.18x/11.19x PER/PBV.
2. CSAP IJ recorded a net revenue growth in 1H22 of +10.12% YoY to IDR7.07 trillion (vs IDR6.42 trillion in 1H21). Meanwhile, net profit rose by +41.80% YoY to IDR112.62 billion (vs IDR79.42 billion in 1H21) (Kontan). MNCS Comment: The increase in revenue was supported by the increase in revenue of: 1) ceramics segment by +9.96% YoY; 2) consumer goods segment by +6.08% YoY; 3) paint segment by +9.68% YoY. The increase in net profit came along with flat margin as the effective-tax rate decreased to 21.64% (vs 23.66% in 1H21) thus raising earnings by +38.96% YoY. Currently, CSAP is traded at the level of 16.43x/1.67x PER/PBV.
3. BRMS IJ reported a successful discovery of a new mineral resource at Citra Palu Minerals (CPM), bringing total mineral resources to 21.7 million tonnes (vs 17.8 million tonnes previously), with an average gold grade of 2.4 g/t (Kontan) (Emiten News). MNCS Comment: The increase in the company's resources was in line with the increase in gold ore processing capacity after plant II is completed later, where the total processing capacity can reach 4,500/day. Thus, this encourages better company performance in the future. BRMS is currently traded at the level of 2.20x PBV.

IHSG Updates
JCI weakened -0.04% to 7,132.05 on Monday (29/08), followed by net foreign buy which reached IDR241.41 billion. The majority of sectors experienced weakness and weighed on the index pace, led by the technology sector (-2.23%) followed by the transportation sector (-1.34%). On the other hand, the strengthening sectors were led by the energy sector (+0.70%) followed by the non-cyclical sector (+0.40%). The weakening Wall Street and Asian markets overshadowed the movement of the index. Investors were worried about the Fed's hawkish statement at the Jackson Hole symposium, where the Fed will continue to tighten monetary policy aggressively and potentially slow down the pace of the economy, although a number of indicators such as inflation and personal spending have shown signs of slowing down. On the other hand, the Rupiah exchange rate closed lower at IDR14,897/USD. We estimate that the JCI will move in the price range of 7,000-7,160. Today's recommendation: EXCL, HRUM, INDF, INDY.

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