Global Market Highlights
DJIA strengthened +0.22% on Monday (27/02), followed by the S&P500 (+0.31%) and the Nasdaq (+0.63%). Wall Street managed to rebound supported by a decrease in UST yields to 3.93%, following the release of data on Non Defense Goods Orders ex air in Jan-2023 which recorded growth of +0.8% MoM, or exceeding the consensus at +0.1% MoM. Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence Feb; 2) US Goods Trade Balance YoY Adv Jan; 3) France Inflation Rate YoY Prel Feb.
Domestic Update
• The IDX and the Minister of SOE signed an MoU to promote capital market development, especially within the scope of SOE, supported by concessions from the OJK that allows SOE’s IPOs with a share percentage of less than 10%. MNCS Comment: We view that this policy can boost the development of the Indonesian capital market, considering the total assets of SOEs is estimated at IDR9,000 trillion in 2021 or contributes 53% to the GDP.
Company News
1. ASII IJ posted net profit growth of +43.3% YoY to IDR28.9 trillion in FY22 (vs IDR20.2 trillion in FY21) (Market Bisnis). MNCS Comment: Net profit growth supported by revenue increase +29.1% YoY to IDR301.4 trillion (vs IDR233.5 trillion in FY21), as heavy equipment sales segment increased +55.6% YoY followed by automotive segment +25.1% YoY. Expansive NPM to 9.6% (vs 8.6% in FY21) despite adjustments to the fair value of investment in GOTO of IDR1.5 trillion. Currently, ASII is traded at the level of 7.81x/1.22x PER/PBV.
2. DRMA IJ realizes cooperation in the development of an EV vehicle battery swap system with Rakata Motorcycle. The operating station is expected to run in 2H23 in the Jabodetabek area (Market Bisnis). MNCS Comment: We see that this cooperation scheme will benefit DRMA which is developing the EV ecosystem, supported by IDR500 billion capex allocation in FY23E. Rakata Motorcycle is a 2W EV manufacturer that has been established since FY10 with 4 different market segments (mini scooter, scooter, maxi scooter and sport). Currently, DRMA is traded at the level of 10.73x/2.86x PER/PBV.
3. SSMS IJ is targeting IDR600 billion to IDR1 trillion capex allocation in FY23E, which will be used mostly for planting activities with a target of +15% increase in production (Investor ID). MNCS Comment: Capex allocation has increased compared to the FY22 target of IDR500-600 billion. Meanwhile, the total area planted reached around 81,168 Ha. We look positively at the company's planting activities which can increase production yields, especially supported by the profile of plants that are still in prime age (~13 years). Currently, SSMS is traded at the level of 7.32x/2.21x PER/PBV.
IHSG Updates
JCI weakened -0.03% to 6,854.78 on Monday (27/02), followed by net foreign buy reaching IDR3.39 trillion. The majority of sectors experienced weakening and weighed on the index, led by the health sector (-2.18%) followed by the infrastructure sector (-1.43%). On the other hand, sectors that experienced strengthening were led by the property sector (+1.01%) followed by the industrial sector (+0.24%). The weakening of the index was in line with most Asian stock exchanges, in line with increasing investor concern over the hawkish expectations of The Fed, to raise the FFR benchmark rate again by 3x by 25 bps at the FOMC going forward. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,270/USD. We estimate that the JCI will move in the price range of 6,837-6,884. Today's recommendation: ADRO, HRUM, MDKA, RALS.
Corporate Actions
RUPS: GTSI, PKPK
Public Expose: PKPK
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