MNCS Morning Navigator

09 Agustus 2022

MNCS Morning Navigator August 9, 2022

Global Market Highlights
The DJIA strengthened by +0.09% on Monday (08/08), while S&P 500 (-0.12%) and Nasdaq (-0.10%). Wall Street closed mixed. Investors tended to wait and see ahead of the release of the Jul-22 inflation data. In addition, negative sentiments came from rising geopolitical tensions between China and Taiwan, where the Chinese military will again hold military exercises in a new area close to Taiwan. Meanwhile, the decline in the yield of US T-notes 10Y to the level of 2.75% became a positive catalyst that boosted the performance of the Dow Jones. Today, the market will be looking toward several data releases such as: 1) US Redbook YoY; 2) US IBD/TIPP Economic Optimism; 3) US Consumer Inflation Expectations.

Domestic Update
Consumer Confidence Index (CCI) was reported at 123.2 on Jul-22, lower than the previous month at 128.2. MNCS Comment: Consumers remain optimistic despite the decline in the Current Economic Condition Index (IKE) and the Economic Condition Expectation Index (IEK). This is in line with the increasing risk of a global economic slowdown and rising domestic inflationary pressures.
• Furthermore, the national Covid-19 daily rate had increased by 4,425 active cases (08/08).

Company News
1. RALS IJ targeted a +20% YoY sales growth in FY22E, supported by the addition of 2 new outlets (Kontan). MNCS Comment: The revenue has the potential to grow to IDR3.11 trillion in FY22E, but has not been able to match the pre-pandemic level in FY19, where the company booked a revenue of IDR5.60 trillion. One of the factors came from the number of outlets, where in FY19 the number of Ramayana outlets reached 112, while in 1H22 the number of outlets was only 101 units. Currently, RALS is traded at the level of 7.19/1.13x PER/PBV.
2. MAPI IJ posted a +34.08% YoY revenue growth in 1H22 to IDR12.24 trillion (vs IDR9.13 trillion in 1H21). Meanwhile, net profit grew +279.51% YoY to IDR1.03 trillion (vs IDR271.70 billion in 1H21) (Bisnis Indonesia). MNCS Comment: The increase in revenue was supported by growth in all MAPI business segments, where the retail sales segment which contributed 75.90% grew +37.26% YoY. Net profit growth was in line with Burger King Indonesia's divestment. However, without including the divestment, MAPI's net profit continued to grow +175.45% YoY. Currently, MAPI is traded at the level of 7.93x/2.55x PER/PBV.
3. INDY IJ will distribute an interim cash dividend of USD40 million or IDR595.52 billion (BI middle rate 3-Aug'22), cum date on the regular market and negotiations on 15-Aug'22 (CNBC Indonesia). MNCS Comment: With 5.21 billion shares outstanding, it is estimated that the interim cash dividend will be IDR114.30 per share, offering a dividend yield of 4.08%. INDY is currently traded at the level of 3.39x/1.20x PER/PBV.

IHSG Updates
JCI strengthened by +0.03% to 7,086.85 on Monday (08/08), followed by net foreign buy which reached IDR1.19 trillion. The majority of sectors experienced strengthening and boosted the index rate, led by the transportation sector (+1.77%) followed by the raw materials sector (+0.98%). On the other hand, the weakening sectors were led by the technology sector (-1.48%) followed by the infrastructure sector (-0.06%). Investors were watching the release of consumer confidence index (IKK) data for Jul-22 at 123.2 points, down 5 points from Jun-22 at 128.2 points but remaining at the optimistic level of >100. On the other hand, the Rupiah exchange rate closed higher at IDR14,878/USD. We estimate the JCI will move in the price range of 7,030-7,100 pending the release of Retail Sales YoY JUN data. Today's recommendation: ANTM, ASII, INDF, PTPP.

Corporate Action
IPO: BUAH (IDR388/share), KLIN (IDR100/share), TOOL (IDR127/share)

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