Global Market Highlights
The DJIA slipped by -0.25% on Tuesday (27/02), while the S&P 500 strengthened (+0.17%) and followed by the Nasdaq (+0.37%). Wall Street closed mix as investors are still eyeing on key macroeconomic data ahead that could enlighten the possible timing of the Fed interest rate cut. We note that the weakening of US CB consumer confidence to 106.7 bps in Feb-2024 (vs 110.9/115 bps in Jan-2024/forecast) also acted as a pressure point to the index. Meanwhile, the increase of US Dallas Fed Services Revenues Index to 5.20 bps in Feb-2024 from -3.60 bps in Jan-2024, beating the forecast of -2 bps, could act as a strengthening factor. Today the market will be looking forward to several data releases such as: 1) US MBA Purchase Index Feb-2024; 2) US GDP Growth Rate 2nd Est. Q4 2023; 3) CA Current Account Q4 2023.
Domestic Update
The Ministry of Finance reported that the total government debt as of Jan-2024 reached IDR8,253.1 trillion, with the debt to GDP ratio at the level of 38.8%. MNCS Comment: We note that based on instruments, the composition of government debt is mostly in the form of Government Securities (SBN) which reached IDR7,278.03 trillion (88.19%) and loans of IDR975.06 trillion (11.81%). We see that debt management is still prudent and still below the 2024-2027 Medium Term Debt Management Strategy limit of around 40%. Additionally, the government has reached 16.6% of the debt issuance target for the APBN of IDR648.1 trillion in Jan-2024 alone.
Company News
1. UNTR IJ posted a net profit of IDR20.6 trillion in FY23 or down -1.9% YoY from IDR21.0 trillion FY22 (Bisnis). MNCS Comment: We note that although UNTR's revenue increased +4.0% YoY and reached IDR128.6 trillion, production expenses increased 9.0% YoY and weighed on the company's GPM/NPM to the level of 27.8%/16.0% (from 28.1%/17.0% in FY22). UNTR's revenue was supported by the services segment (+17.5% YoY), while the product sales segment (HMCE) decreased -5.7%. UNTR is currently trading at 4.32x/1.12x PER/PBV.
2. RAFI IJ recorded a remarkable net profit growth of +864.9% YoY, reaching IDR106.0 billion in 9M23 (IDX Channel). MNCS Comment: The significant increase in net profit is mainly supported by a surge in revenue by +179.5% YoY to IDR292.4 billion in 9M23 (vs IDR104.6 billion in 9M22). Additionally, there was a revaluation of investment property amounting to IDR89.2 billion, driving the bottom-line performance. Meanwhile, the company's GPM/OPM experienced declines, reaching 19.2%/7.7% in 9M23 (vs 23.1%/12.9% in 9M22). RAFI is currently trading at 1.11x/0.55x PER/PBV.
3. SSIA IJ aims for up to IDR1 trillion or +155% marketing sales growth in FY24E (Kontan). MNCS Comment: Company is optimistic to increase the marketing sales despite a drop of -54.49% YoY value in this segment at 9M23. However, we consider this expectation to be achievable, supported by the land sales in Karawang and Subang. One of the company’s largest projects, Subang Smartpolitan, is expected to fully operate in 3Q24. SSIA is currently trading at 0.62x PBV.
IHSG Updates
The JCI closed flat by +0.02% to 7,285.32 on Tuesday (27/02), followed by a net foreign sell reaching IDR1.18 trillion. Several sectors saw gains, led by the industrial sector (+1.02%) followed by the technology sector (+0.31%). On the other hand, sectors experiencing declines were led by the consumer non-cyclical sector (-0.43%) followed by the property and real estate sector (-0.31%). The index closed relatively flat, concluding a correction phase over the last 4 trading days. Investors were attentive to the inflation rate in Japan for Jan-2024, which successfully slowed to +2.2% YoY (vs +2.6% YoY previously). Additionally, investors remain in a wait-and-see ahead of the earnings releases of several companies. The Rupiah closed lower at IDR15,640/USD. We estimate the IHSG will move within the price range of 7,262-7,308. Today's Recommendations: ARTO, AUTO, AVIA, UNTR.
Corporate Actions
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