Global Market Highlights
DJIA weakened -0.46% on Tuesday (14/02), followed by S&P500 (-0.03%) while Nasdaq (+0.57%). Wall Street closed mixed as investors grew concerned about the Fed's hawkish stance, after the release of Jan-2023 inflation data which slowed to +6.4% YoY (+6.5% YoY in Dec-2022) but was still above the consensus of +6.2% YoY. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM Jan; 2) UK Core Inflation Rate YoY Jan; 3) UK Inflation Rate YoY Jan.
Domestic Update
• Bank Indonesia reported that Indonesia's external debt (ULN) position in 4Q22 reached USD396.8 billion, down -4.1% YoY. MNCS Comment: The external debt position continued its downward trend (3Q22: -6.7% YoY) mainly due to the weakening of the USD exchange rate, as well as payment of trade debt, debt securities and loans to private external debt. Meanwhile, the position of foreign exchange reserves as of Jan-2020 was still solid at USD139.4 billion, equivalent to 6.0 months of imports and government external debt payments.
Company News
1. ARNA IJ posted +1.24% YoY revenue growth in FY22 to IDR2.58 trillion. Meanwhile, net profit increased +22.36% YoY to IDR576.21 billion (Investor ID). MNCS Comment: Limited revenue growth in line with declining revenue in 4Q22 by -12.8% YoY, which we assess is influenced by the increased DSO. However, COGS fell -6.22% YoY making margins expansive where NPM was 22.3% (vs 18.4% in FY21). Currently, ARNA is traded at the level of 12.36x/3.95x PER/PBV.
2. ASII IJ recorded car sales volume reaching 50,755 units in Jan-2023 (Kontan). MNCS Comment: ASII car sales increased +14.6% YoY (vs 44,308 units in Jan-2022). Meanwhile, with domestic car sales in Jan-2023 reaching 94,087 units, ASII maintained a market share of 53.9% (vs. 52.7% in Jan-2022). Currently, ASII is traded at the level of 7.45x/1.22x PER/PBV.
3. DRMA IJ allocated IDR100 billion capex allocation to build 2 new factories through its entity (Emiten News). MNCS Comment: The capex allocation is equivalent to 20% of the FY23E target of IDR500 billion. The massive expansion is in line with the company's goal to build an EV ecosystem. It is hoped that this expansion will also encourage the company's performance which is targeting growth in revenue and net profit in FY23E of +20%/+10% YoY respectively. Currently, DRMA is traded at the level of 8.33x/2.22x PER/PBV.
IHSG Updates
JCI strengthened +0.60% to 6,941.85 on Tuesday (14/02), followed by net foreign buys reaching IDR 266.55 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the health sector (+1.85%) followed by the energy sector (+1.22%). On the other hand, sectors that experienced weakness were led by the industrial sector (-0.23) followed by the cyclical sector (-0.23%). We view that the strengthening of the index is in line with investor optimism ahead of the announcement of the BI7DRR reference rate which is estimated to be held at 5.75%. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,160/USD. We estimate that the JCI will move in the price range of 6,898-6,953 pending the release of Balance of Trade Jan, Export Jan, and Import Jan data. Today's recommendation: AKRA, ASII, BRPT, PGAS.
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