Global Market Highlights
The DJIA gained +0.43% on Thursday (14/12), followed by S&P500 (+0.26%) and Nasdaq (+0.19%). Wall Street remained solid, supported by The Fed's plan to pivot by 75 bps in FY24F. Additionally, investors positively responded to the release of Nov-2023 retail sales data, which successfully rebounded +0.3% MoM, higher than the consensus of -0.1% MoM and the realization in Oct-2023 at -0.2% MoM. Today, the market will be looking toward several data releases such as: 1) China Retail Sales MoM Nov-23; 2) EU Balance of Trade Oct-23; 3) US Industrial Production MoM Nov-23.
Domestic Update
The government has updated the incentive policy from Perpres No. 55/2019 to Perpres No. 79/2023 regarding the Acceleration of Battery-Based Electric Motor Vehicles (KBLBB). MNCS Comment: We assess that this regulation will contribute to the growth of domestic EVs in the future, especially in the purchase of imported CBU units that will receive incentives. Furthermore, companies that accelerate assembly processes domestically until FY25F will also receive incentives. With strong demand and relatively resilient purchasing power of mid-high consumer classes, we expect solid growth in EV sales ahead.
Company News
1. IPCC IJ will distribute an interim dividend of IDR39.5 billion or equivalent to IDR21.7 per share (Market Bisnis). MNCS Comment: With a net profit of IDR141.9 billion in 9M23 (vs IDR108.9 billion in 9M22), the provided payout ratio is 27.8%. Furthermore, we estimate that IPCC will offer a dividend yield of 3.0%. Currently, IPCC is traded at 6.92x/1.08x PER/PBV.
2. MDKA IJ projects that the Tujuh Bukit mine will contribute to the company's finances in FY26F-FY27F (Investor ID). MNCS Comment: We note that the Tujuh Bukit mine has mineral resources of 1.7 billion tons and contains 8.1 million tons of copper and 27.4 million ounces of gold. With these reserves and expectations of increased exploration, we anticipate better company performance, supported by increased production balanced with manageable cash cost. Currently, MDKA is traded at 3.92x PBV.
3. AGII IJ targets performance growth for FY23E exceeding 1.5x-2x the national economic growth, supported by the potential development of the domestic gas market (Market Bisnis). MNCS Comment: In 9M23, AGII recorded a net profit growth of +57.7% YoY, reaching IDR111.0 billion (vs IDR70.4 billion in 9M22). The increase in net profit was supported by an +8.7% YoY growth in revenue and an expanding margin. With diversified segments, including retail, medical, consumption, infrastructure, and growing manufacturing industries aligned with consumption levels, we anticipate solid company performance in the future. Currently, AGII is traded at 31.50x/1.24x PER/PBV.
IHSG Updates
The JCI strengthened by +1.42% to 7,176.02 on Thursday (14/12), followed by significant net foreign buy of IDR2.32 trillion. Most sectors increased and drove the index up, led by technology sector (+5.93%) and followed by properties & real estate sector (+2.31%). In contrast, some sectors weakened, led by infrastructures sector (-1.91%) and followed by basic materials sector (-1.25%). The index strengthened as investors positively responded to The Fed's statements in the FOMC, indicating the end of the benchmark interest rate hike era and a projected 75 bps FFR cut in FY24F. Meanwhile, the Asian markets mixed as a released report projected China’s economy to slow down in 2024. According to the World Bank report, China’s annual growth is projected to fall from 5.2% to 4.5% this year. The Rupiah closed higher at IDR15,497/USD. We estimate the IHSG will move within the price range of 7,151-7,201. Today's Recommendations: ACES, AKRA, BUKA, PGAS.
Corporate Actions
EGMS : ADCP
Cum Dividend : BYAN (USD0.015/share)
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