MNCS Morning Navigator

03 Februari 2023

MNCS Morning Navigator February 3, 2023

Global Market Highlights
DJIA fell -0.11% on Thursday (02/02), while the S&P500 (+1.47%) and Nasdaq (+3.25%). Wall Street closed mixed, where investors responded positively to a slowdown in the FFR increase of +25 bps to 4.50% -4.75%. Apart, a positive catalyst also came from the initial jobless claims as of January 28, 2023, which amounted to 183k, or down 3k from the previous. Today, the market will be looking toward several data releases such as: 1) US Non Farm Payrolls Jan; 2) US Unemployment Rate Jan; 3) US ISM Non-Manufacturing PMI Jan.

Domestic Update
• The government is preparing to implement a zero ODOL policy for goods transportation in early 2023. MNCS Comment: The implementation of zero ODOL will have an impact on increasing the cost of shipping logistics transportation in several sectors such as the cement and ceramics industry, while increasing costs are feared to create an increase in the inflation rate. Thus, there is a need for additional incentive packages in its implementation.

Company News
1. UNVR IJ targets business growth of up to 5-6% YoY in FY23E (Emiten News). MNCS Comment: We view that this target will be supported by the purchasing power of the people who remain solid amidst a potential slowdown in economic growth, as well as a good product mix in the mid-high segment. However, along with the high global oil price of ~USD78/bbl, it is possible that costs will remain high, potentially burdening margins. Currently, UNVR is traded at the level of 29.35x/31.49x PER/PBV.
2. PANI IJ recorded revenue growth of +91.9% YoY to IDR364.2 billion in 9M22 (vs IDR189.8 billion in 9M21). Meanwhile, net profit grew 5x to IDR8.6 billion (vs IDR1.6 billion in 9M21) (Emiten News). MNCS Comment: The increase in revenue was supported by the emergence of a new revenue segment originating from real estate, which reached IDR127.4 billion. Meanwhile, the significant increase in net profit was in line with expansive margins, where GPM was recorded at 25% (vs 7% in 9M21). Currently, PANI is traded at the level of 375.89x PBV.
3. KRAS IJ targets a capex allocation of USD129.8 million or equivalent to IDR1.93 trillion in FY23E (Market Bisnis). MNCS Comment: The Capex will be intended for the development of Nusantara's IKN. To support product distribution, the company through its entities will also develop a port for a multipurpose terminal. Furthermore, in line with the IKN development budget which is estimated to reach IDR466 trillion to FY45F, it is hoped that through the company's participation, it can encourage better performance going forward. Currently, KRAS is traded at the level of 3.76x/0.56x PER/PBV.

IHSG Updates
JCI strengthened +0.41% to 6,890.57 on Thursday (02/02), followed by net foreign sell reaching IDR258.31 billion. The majority of sectors experienced strengthening and drove the index rate, led by the technology sector (+4.48%) followed by the health sector (+1.84%). On the other hand, sectors that experienced weakness were led by the infrastructure sector (-0.56%) followed by the industrial sector (-0.44%). The index's gains were still supported by the slowing Jan-2023 inflation rate which was recorded at +5.28% YoY (vs +5.51% YoY in Dec-2022), and the Fed views that the US inflation rate has started to decline followed by a slowdown in the increase in the benchmark interest rate +25 bps (vs +50 bps previously). On the other hand, the Rupiah exchange rate closed higher at the level of IDR14,880/USD. We estimate that the JCI will move in the price range of 6,860-6,910. Today's recommendation: AKRA, BFIN, MEDC, INKP.

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