Global Market Highlights
The DJIA fell by -0.37% on Friday (16/02), followed by the S&P 500 (-0.48%) and the Nasdaq (-0.82%). Wall Street experienced a correction after the annual Producer Price Inflation (PPI) Jan-2024 declined slightly to 0.9% YoY from 1% YoY in Dec-2023, but higher than expectations of 0.6% YoY which diminished the optimism of imminent interest rate cuts by the Fed. Additionally, the rise of 10-years US Treasury Yield also added pressure to the index. Today the market will be looking forward to several data releases such as: 1) JP Machinery Orders Dec-2023; 2) CA Production Price Inflation Jan-2024; 3) CA Raw Materials Prices Jan-2024.
Domestic Update
Bank Indonesia reported that based on transactions from February 12 to February 15, 2024, non-residents in the domestic financial market recorded a net buy of IDR4.07 trillion, consisting of a net sell of IDR980 billion in SBN, a net buy of IDR6.03 trillion in the stock market, and a net sell of IDR980 billion in the SRBI. MNCS Comment: We note that on a YTD basis up to February 15, 2024, foreign flows have recorded a net sell in the SBN market (IDR680 billion), accompanied by net purchases in the stock market (IDR15.41 trillion) and the SRBI (IDR29.76 trillion). The recent equities' foreign flow surge was strongly influenced by the elections result expectations and the upcoming governmental prospects.
Company News
1. MPXL IJ targets revenue growth of ~59.0% YoY to reach IDR222 billion in FY24F (Kontan). MNCS Comment: We see that this growth has the potential to be achieved with one of the catalysts for the transportation and logistics sector being the IKN development project. To achieve the projected growth, the company plans to increase its fleet by 50 units, with a prepared capex in FY24F of IDR95 billion. Thus, the company's net profit is projected to reach IDR18.2 billion in FY24F. MPXL is currently trading at the level of 31.45x/3.59x PER/PBV.
2. MTDL IJ targets revenue of IDR25 trillion in FY24E (Investor ID). MNCS Comment: We are optimistic that the company can achieve this target, with the disappearance of post-election uncertainty that could drive industry growth. We also see that the fading global chip shortage can boost sales in the hardware segment, along with the digital solution provider segment continuing to rise amid increased demand. MTDL is currently trading at 12.26x/1.91x PER/PBV.
3. SIDO IJ prepares IDR102 bn capex in FY24E for maintenance, R&D, addition of some production and laboratory equipment (Kontan). MNCS Comment: The management budgets lower capex than last year, while staying optimist for better sales this year. This expectation is supported with the general election event which is likely to increase people’s purchasing power. We view this factor to potentially boost the retail industry in general, after facing a challenging year in FY23 due to the impact of El-Nino. SIDO is currently trading at 4.93x PBV.
IHSG Updates
The JCI rose by +0.44% to 7,335.55 on Friday (16/02), followed by a net foreign buy reaching IDR1.65 trillion. Almost all sectors experienced gains and driving the index, led by the basic materials sector (+2.38%), followed by the consumer non-cyclical sector (+2.08%). On the other hand, the technology sector experienced a decline (-0.91%). The index strengthened in line with the movement of other Asian markets, where investors positively responded to the retail sales performance in Dec-2023. Additionally, investors are optimistic ahead of the release of earnings reports of companies in FY23. The Rupiah closed flat at IDR15,620/USD. We estimate the IHSG will move within the price range of 7,263-7,358. Today's Recommendations: ANTM, BRIS, BRPT, CUAN.
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