Global Market Highlights
The DJIA strengthened by +0.29% on Monday (12/02), amidst the declines of the S&P 500 (-0.05%) and the Nasdaq (-0.33%). Wall Street closed mixed with stable consumer inflation expectations at 3% in Jan-24, which matched the forecast, as the upside incentive. Meanwhile, investors tend to wait and see for the release of US inflation reports and Consumer Price Index (CPI) today that could translate into the expectations of Fed Funds Rate (FFR) cuts. Today the market will be looking forward to several data releases such as: 1) US Inflation Rate Jan-2024; 2) US Consumer Price Index (CPI) Jan-2024; 3) GB Unemployment Rate Dec-2023.
Domestic Update
Indonesia's foreign exchange reserves were recorded at USD146.4 billion for the Dec-2023 period, an increase of USD8.3 billion from the Nov-2023 position of USD138.1 billion. MNCS Comment: We note that the forex reserves position is equivalent to financing 6.5 months of imports and payment of government foreign debt, with its growth supported by tax and service revenues as well as withdrawals of foreign loans by the government. The position of forex reserves still has the potential to grow in FY24E considering the prospect of CPO prices in line with the El-Nino as well as the FDI growth target of +18% YoY, even though a wait-and-see period should sustain until the election results announcement.
Company News
1. BBTN IJ managed to record net profit growth of +15.0% YoY in FY23, reaching IDR3.5 trillion (Emiten News). MNCS Comment: We note that the company's performance in FY23 was supported by credit distribution which grew solid +11.9% YoY (vs. target of +11% YoY) reaching IDR333.7 trillion, dominated by mortgages (subsidized/unsubsidized mortgage distribution grew +10.9%/+9.5% YoY). From a risk standpoint, BBTN also managed to slash its NPL ratio to 3.0% (vs. 3.4% in FY22). BBTN is currently trading at 0.66x PBV.
2. UNVR IJ reported a decline in net profit by -10.5% YoY to IDR4.8 trillion in FY23 (Kontan). MNCS Comment: UNVR's net profit was below our estimate, reflecting 90% of the FY23 target. The decline in net profit, accompanied by a -6.3% YoY decrease in revenue to IDR38.6 trillion (95% of the FY23 target), was primarily influenced by "consumer sentiment" in 4Q23, leading to a -20.6% YoY drop in revenue. Additionally, increased AMP costs and central service agreement also burdened profitability, with OPM decreasing to 16.3% (vs 17.1% in FY22). UNVR is currently trading at 19.95x/20.70x PER/PBV.
3. EXCL IJ hit +15% bottom-line growth in FY23 (Emiten News). MNCS Comment: We view the company successfully achieved operational excellence in FY23, reflected from increasing blended ARPU of IDR41,000 in FY23 (vs IDR 39,000 in FY22) and +21% YoY network traffic in FY23. Additionally, the company manages to penetrate 75% of their services to FMC. Management is aiming for high single digit of revenue growth with capex around ~IDR8 tn in FY24E. EXCL is currently trading at 23.71x/1.15x PER/PBV.
IHSG Updates
The JCI strengthened +0.86% to 7,297.67 on Monday (12/02), followed by a net foreign buy of IDR2.07 trillion. Most sectors experienced gains and driving the index, led by the financial sector (+1.18%), followed by the infrastructure sector (+0.85%). Meanwhile, sectors that experienced losses were led by the transportation and logistics sector (-0.38%), followed by the non-cyclical sector (-0.35%). The index successfully strengthened amid calmness ahead of the general elections, as investors remained optimistic about the upcoming macroeconomic data releases expected to remain robust this week. The Rupiah closed higher at IDR15,595/USD. We estimate the IHSG will move within the price range of 7,262-7,311. Today's Recommendations: ESSA, MEDC, PGAS, SMGR.
Corporate Actions
IPO: HYGN (IDR145/Share)
EGSM: AGRS, MFIN
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