MNCS Morning Navigator

31 Agustus 2022

MNCS Morning Navigator August 31, 2022

Global Market Highlights
The DJIA was down -0.96% on Tuesday (30/08), followed by the S&P500 (-1.10%) and the Nasdaq (-1.12%). Wall Street was pressured with the increasing investor concerns over the potential for aggressive FFR hikes, following the release of new job opening data on Jul-22 which increased to 11.24 million (vs 11.04 million in Jun-22), and was above its consensus of 10.45 million. Today, the market will be looking toward several data releases such as: 1) US ADP Employment Change Aug; 2) Germany Unemployment Rate Aug; 3) France Inflation Rate Yoy Prel Aug.

Domestic Update
• The government is reported to raise subsidized fuel prices on Wednesday (31/08/22). The price of Pertalite is said to increase to a maximum of IDR10,000/liter and subsidized diesel in the range of IDR8,500-10,000/liter. MNCS Comment: The increase in subsidized fuel prices has an impact on rising inflation. If a significant increase in inflation is accompanied by a tightening of monetary policy, it will have a negative impact on the valuation of financial assets, both bonds and stocks.
• Furthermore, the national Covid-19 daily rate had increased by 5,070 active cases (30/08).

Company News
1. GOTO IJ recorded a net revenue growth in 1H22 of +73.32% YoY to IDR3.39 trillion (vs IDR1.96 trillion in 1H21). Meanwhile, net loss increased by +117.28% YoY to IDR13.65 trillion (vs net loss of IDR6.28 trillion in 1H21) (Kontan). MNCS Comment: Net revenue growth was supported by the increase in the e-commerce segment by +465.81% YoY. Meanwhile, net loss increased along with the increase in cost of goods by +66.00% YoY, selling expenses by +235.43% YoY and general expenses by +50.05% YoY. GOTO is currently traded at the level of 2.65x PBV.
2. WIKA IJ recorded a revenue growth in 1H22 of +6.16% YoY to IDR7.18 trillion (vs IDR6.77 trillion in 1H21). On the bottom line, WIKA recorded a net loss of IDR13.32 billion (vs net profit of IDR83.42 billion in 1H21) (Emiten News). MNCS Comment: Revenue increased as the infrastructure and building segments grew (+1.95% YoY) and industry (+9.78% YoY). The net loss was in line with other expenses of IDR391.02 billion as well as reduced income from JV by -45.08% YoY. WIKA is currently traded at the level of 0.73x PBV.
3. SILO IJ posted a -4.93% YoY decline in revenue in 1H22 to IDR4.41 trillion (vs IDR4.64 trillion in 1H21). Meanwhile, net profit fell by -30.52% YoY to IDR210.31 billion (vs IDR302.69 billion in 1H21) (Emiten News). MNCS Comment: Inpatient revenue segment decreased by -7.08% YoY in line with the reduced acceptance of hospital facilities (-42.58% YoY) and inpatient rooms (-26.31% YoY). The decrease in net profit was in line with the increase in COGS +2.04% YoY which caused GPM and OPM to shrink to 34.05% and 7.37%, respectively (vs 38.56% and 10.65% in 1H21). Currently, SILO is traded at the level of 31.85x/2.07x PER/PBV.

IHSG Updates
JCI rose by +0.38% to 7,159.47 on Tuesday (30/08), followed by net foreign buy which reached IDR921.84 billion. The majority of sectors experienced strengthening and pushed the index rate, led by the technology sector (+1.59%) followed by the industrial sector (+1.33%). On the other hand, the weaker sector was led by the energy sector (-1.03%) followed by the non-cyclical sector (-0.50%). The strengthening of the index was in line with the majority of other Asian bourses. The index managed to rebound as investors' concerns began to subside after the Fed's hawkish tone at the Jackson Hole symposium yesterday. In addition, we see that market participants appear optimistic ahead of the release of economic data at the beginning of Sep-22 such as the Manufacturing PMI Aug-22 and inflation Aug-22, where the consensus forecasts inflation growth Aug-22 to be +4.9% YoY (vs +4.94% YoY in Jul-22). On the other hand, the Rupiah exchange rate closed higher at IDR14,843/USD. We estimate that the JCI will move in the price range of 7,130-7,180. Today's recommendation: ADHI, GOTO, PTPP, TLKM.

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