Global Market Highlights
The DJIA rose by +0.14% on Thursday (28/12), while the S&P500 relatively flat (+0.04%), followed by Nasdaq (-0.03%). Wall Street closed mixed as investors observed the release of initial jobless claims data on December 23, totaling 218k, slightly higher than the consensus estimate of 210k. Additionally, Pending Home Sales in Nov-2023 still registered a contraction of -5.2% YoY. Today, the market will be looking toward several data releases such as: 1) US Chicago PMI Dec-23; 2) China Current Account Final 3Q; 3) UK Nationwide Housing Prices YoY Dec-23.
Domestic Update
The Ministry of Industry reported that the Industrial Confidence Index (IKI) in Dec-2023 stood at 51.32. MNCS Comment: This figure declined from the achievement in Nov-2023 of 52.43 and has been on a downtrend since Jun-2023 at 53.93. However, the position of IKI in Dec-2023 still indicates an expansive level, showing optimism among industry players amid uncertainty. Going forward, we estimate that the IKI will remain at an expansive level (>50), supported by the momentum of the festive season in 2Q24 and the post-election effect.
Company News
1. PTRO IJ recorded a net profit decline of -65.6% YoY to USD10.6 million in 9M23 (Investor ID). MNCS Comment: We see a decline in net profit amid increased revenue (+27.0% YoY), accompanied by a rise in COGS by +38.4% YoY, impacting the gross profit (-17.6% YoY). Furthermore, OPEX also increased by +31.4%, weighing on the company's profitability. Meanwhile, NPM decreased to 2.5% (vs 9.3% in 9M22). Currently, PTRO is traded at a level of 16.75x/1.55x PER/PBV.
2. GOOD IJ plans to acquire a 75% stake in PT Suntory Garuda Beverage (SGB), with renowned brands such as Okky Jelly Drink and Mountea (Market Bisnis). MNCS Comment: We assess positively the company's acquisition efforts that can enhance future revenue streams. We note that the Okky Jelly Drink brand tops the Top Brand Index for the Jelly Drink category at 75.7%. This indicates that the product remains top-of-mind for consumers. Currently, GOOD is traded at a level of 32.56x/4.81x PER/PBV.
3. ANJT IJ targets a capex allocation of USD37.8 million in FY24F, intended for the continuation of the replanting program, lateralization projects, and routine maintenance (Kontan). MNCS Comment: We note that the capex allocation has slightly decreased compared to the FY23E target of USD40 million, with realization reaching 70.0% until 11M23. Meanwhile, we view positively the replanting program and other projects that can maintain the company's yield productivity in the future. This aligns with the company's focus on the upstream business and has the potential to support the target of +5.0% YoY top-line growth in FY24F. Currently, ANJT is traded at a level of 0.39x PBV.
IHSG Updates
The JCI strengthened by +0.80% to 7,303.89 on Thursday (28/12), followed by significant net foreign buy of IDR1.07 trillion. Most sectors increased and moved the index up, led by the properties & real estate sector (+2.38%) and followed by the consumer non-cyclicals sector (+1.28%). Meanwhile some sectors weakened, led by the transportation & logistic sector (-0.74%) and followed by the healthcare sector (-0.35%). The index's growth aligns with the majority of other Asian markets, where investors respond positively to the release of Japan Retail Sales data in Nov-2023, growing expansively by +5.3% YoY (vs a consensus of 5.0% YoY). Additionally, investors are optimistic ahead of the early-year macroeconomic data releases. The Rupiah closed higher at IDR15,420/USD. We estimate the IHSG will move within the price range of 7,271-7,317. Today's Recommendations: ADMR, ASRI, BFIN, MDKA.
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