Global Market Highlights
The DJIA weakened by -0.14% on Friday (09/02), followed by the S&P 500 (+0.57%) and the Nasdaq (+1.25%). Wall Street closed mix after the reading of the US inflation rate shows unchanged growth of +0.2% MoM in Dec-2023, with seasonally adjusted Consumer Price Index (CPI) of 308.74 points in Dec-2023 (vs 308.02 in Nov-2023). Today the market will be looking forward to several data releases such as: 1) US Consumer Inflation Expectations Jan-24; 2) US 3- & 6-Month Bill Bond Yield; 3) RU Balance of Trade Dec-2023.
Domestic Update
Bank Indonesia reported that based on transactions from January 5 to February 6, 2024, non-residents in the domestic financial market recorded a net sell of IDR3.01 trillion, consisting of a net sell of IDR2.79 trillion in SBN, a net buy of IDR270 billion in the stock market, and a net sell of IDR540 billion in the SRBI. MNCS Comment: We note that on a YTD basis up to February 7, 2024, foreign flows have recorded a net buy in the SBN market (IDR250 billion), the stock market (IDR11,64 trillion) and the SRBI (IDR31,52 trillion). The foreign flows have recently reversed on a wait-and-see call due to the Chinese New Year to subdued activity and the general election day on February 14, 2024.
Company News
1. HRTA IJ targets revenue growth of ~30% YoY and net profit of ~15% YoY in FY24E (Kontan). MNCS Comment: We see that this target is plausible, with the company preparing a capex of IDR 45 - IDR 50 billion for its retail outlet expansion of up to ~17 outlets and the purchase of new production machinery units in FY24E. Export market expansion will be carried out (39% of 9M23 revenue), but the company's focus will remain on the domestic segment to maintain net profit margins. HRTA is currently trading at 4.84x/0.87x PER/PBV.
2. INCO IJ recorded net profit growth of +36.9% YoY to USD274.3 million in FY23 (Emiten News). MNCS Comment: INCO's net profit in FY23 beat our estimate of USD221.2 million in FY23. This increase was primarily supported by a revenue growth of +4.5% YoY to USD1.2 billion in FY23, in-line with our estimates (101.9%). Additionally, margin expansion with GPM/OPM rising to 28.2%/24.5% (vs 26.6%/23.1% in FY22) also contributed to the company's profitability. INCO is currently trading at 7.98x/0.94x PER/PBV.
3. ISAT IJ allocates IDR12 tn capex to boost expansion in FY24E (Kontan). MNCS Comment: We view the management’s plan to focus on expanding the network outside Java Island, especially in Eastern regions of Indonesia, will improve the competitive position towards its peers in terms of network coverage experience. Deploying network in the rural area also still has plenty of room to grow, hence will benefit the company’s performance in the long run. The company has released 4Q23’s performance of +9.57% YoY revenue growth. ISAT is currently trading at 17.00x/2.27x PER/PBV.
IHSG Updates
The JCI closed as a commemoration of Isra Mi'raj and the Chinese New Year holiday. Meanwhile, several Asian markets closed mixed last weekend. The market is paying attention to the BoJ governor's statement regarding the possibility of maintaining "ultra-easy monetary" policy if the period of negative interest rates ends. Moreover, domestic investors will wait and see for several macroeconomic data releases this week, such as CCI, 4W sales, and the trade balance for Jan-2024. Investors will also wait and see for the elections this week. The Rupiah closed higher at IDR15,635/USD. We estimate the IHSG will move within the price range of 7,214-7,261. Today's Recommendations: AGII, ARTO, BREN, UNTR.
Corporate Actions
IPO: MEJA (IDR103/Share), LIVE (IDR148/Share)
EGSM: PGEO
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