Global Market Highlights
The DJIA strengthened by +0.13% on Wednesday (21/02), followed by the S&P 500 (+0.13%) while the Nasdaq weakened (-0.32%). Wall Street closed mix, reflecting investors’ concerns of rate cut policy following minutes from the Fed that signalled drawbacks from reducing interest rate in a close time. Today the market will be looking forward to several data releases such as: 1) US Initial Jobless Claims; 2) US S&P Global Manufacturing PMI Feb-2024; 3) JP Jibun Bank Manufacturing PMI Feb-2024.
Domestic Update
Bank Indonesia reported that the Term Deposit of Foreign Exchange Proceeds from Exports (TD DHE) as of 20 February 2024 reached USD 1.95 billion, a decrease from USD 2.36 billion recorded at the end of the week of 2023. MNCS Comment: As of Feb-2024 there has been an increase in the number of participating exporters TD DHE became 158 exporters, with the majority of exporters (98.8%) preferring TD placement with a tenor of 3 months. We see that TD DHE still plays an important role as an instrument to support the rupiah exchange rate by optimizing foreign exchange reserves, because there is still a gap between DHE placed abroad. To attract more TD participants, BI plans to provide a more attractive tax treatment and various other incentives.
Company News
1. ITMG IJ recorded net profit of USD500.3 million or decreased -58.3% YoY in FY23 vs USD1.2 billion in FY22 (Kontan). MNCS Comment: We note that the company experienced a 35% YoY decline in revenue worth USD2.4 billion in FY23 (vs USD3.6 billion in FY22). We see this in line with the normalization of coal prices and high-base in FY22. Currently ITMG is trading at the level of 3.88x/1.09x PER/PBV.
2. ACES IJ reported a SSSG of +5.6% in Jan-2024 (Kontan). MNCS Comment: ACES kicked off the year with positive results, as the SSSG was driven by outlets outside Java growing by +6.1%, while Java (excluding Jakarta) recorded +5.9%. This resulted in revenue for 1M24 reaching IDR664 billion, a +9.4% YoY increase. We anticipate a continued rise in SSSG, supported by the realization of new store openings in FY23 and the momentum of the festive season. ACES is currently trading at 21.50x/2.33x PER/PBV.
3. SMBR IJ sets a target of +24% YoY sales volume and allocates IDR116 billion capex in FY24E (Kontan). MNCS Comment: We view the management’s optimism in increasing cement sales is justified with several factors, including the potential rate cuts by The Fed and the tax incentive on property purchase under IDR2 billion, which can push people’s buying power up. Meanwhile, the downside potentials are related to fierce market competitions and environmental regulatory changes. The company successfully recorded +9.83% YoY of revenue and +25.02% YoY of net profit in 9M23. SMBR is currently trading at 33.13x/0.76x PER/PBV.
IHSG Updates
The JCI closed flat at -0.05% to 7,349.02 on Wednesday (21/02), followed by a net foreign buy amounting to IDR79.24 billion. Several sectors experienced declines, led by the technology sector (-1.08%) and followed by the basic material sector (-1.05%). On the other hand, sectors that saw gains were led by the consumer cyclical sector (+1.96%) and followed by the healthcare sector (+1.04%). The index remained relatively flat amid mixed movements in Asian markets. Investors tended to wait and see ahead of the FOMC minutes. Additionally, investors observed BI's RDG decision in Feb-2024, maintaining the BI rate at 6.0%. The Rupiah closed higher at IDR15,635/USD. We estimate the IHSG will move within the price range of 7,286-7,370. Today's Recommendations: PGAS, TOWR, UNIQ, PTBA.
Corporate Actions
EGMS: VOKS
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