Global Market Highlights
The DJIA strengthened by +0.35% on Friday (02/02), followed by the S&P 500 (+1.07%) and the Nasdaq (+1.74%). Wall Street continued to grow, led by the release of macroeconomy dataset that met the market expectations. The US Non-Farm Payrolls increased to 353K jobs in Jan-2024 (vs 333K in Dec-2024) and doubled the market consensus at 180k. This is followed by a stable unemployment rate at 3.7% in Jan-2024 compared to the previous month. Additionally, the US Michigan’s inflation expectations fell from 3.1% in Dec-2023 to 2.9% in Jan-2024, marking the lowest figure for the last three years. Today the market will be looking forward to several data releases such as: 1) S&P Global US Services PMI; 2) US ISM Services Employment Jan-2024; 3) Caixin China General Service PMI Jan-2024.
Domestic Update
Bank Indonesia reported that based on transactions from January 25 to February 1, 2024, non-residents in the domestic financial market recorded a net buy of IDR8.51 trillion, consisting of a net buy of IDR5.51 trillion in the SBN, a net buy of IDR2.46 trillion in the stock market, and a net buy of IDR540 billion in the SRBI. MNCS Comment: We note that the net foreign inflows re-emerged last week after the previous week’s recorded net foreign outflows. In our opinion, this reflects investors’ risk-on stance as the strength in the US labor market and solid consumer confidence fuels anticipation for a soft-landing. This was reflected by notable selloffs in safe haven metals and UST upon last week’s closing.
Company News
1. ANJT IJ recorded crude palm oil (CPO) production growth of 2.9% YoY, reaching 283.65k tons in FY23E (Kontan). MNCS Comment: We note that ANJT's production growth is supported by the high productivity of the Belitung Island plantation which has a relatively young average tree age after replanting. Improvements in infrastructure and the young average tree age in the Southwest Papua plantations have also contributed to the growth in fresh fruit bunch (FFB) production. The company targets production growth of 5 - 6% in FY24E. ANJT is currently trading at 190.54x/0.36x PER/PBV.
2. ESSA IJ recorded a net profit of USD34.6 million in FY23 or plunged by -75.1% YoY (Emiten News). MNCS Comment: The significant decline in net profit is in line with a -52.8% YoY decrease in revenue to USD345 million (vs USD731.5 million in FY22). The drop in revenue is mainly attributed to a -56.0% YoY decline in ammonia sales, in line with the contraction in global prices. Additionally, the shutdown in Feb-Mar 2023 also contributed to operational decline. On the margin side, the company's OPM/NPM contracted to 22.3%/10.0% respectively (vs 41.3%/19.0% in FY22). ESSA is currently trading at a level of 1.36x PBV.
3. KLBF IJ optimists to hit ~10% revenue growth and double-digit net profit in FY24E (Kontan). MNCS Comment: We foresee the target to boost the business growth after performing +6.51% sales growth in 9M23 as positive efforts from the management. As strategic approaches, the company is planning to do appealing expansions this year, such as launching 15-20 new products including 7 new healthcare equipment which will be used by BPJS program. Additionally, the company has just recently established radioisotope and radiopharmaceutical production facilities for cancer’s early detection in Jakarta. A similar facility will also be built in Surabaya. KLBF is currently trading at level 3.20x PBV.
IHSG Updates
The JCI strengthened by +0.52% to 7,238.79 on Friday (02/02), followed by a net foreign buy of Rp1.46 trillion. Several sectors experienced gains and drove the index, led by the healthcare sector (+0.73%), followed by the non-cyclical sector (+0.70%). On the other hand, sectors experiencing declines were led by the energy sector (-0.39%), followed by the technology sector (-0.32%). The index successfully rebounded, along with other Asian markets closing in positive territory. The index's strength was supported by investors scrutinizing company earnings releases. Additionally, investors observed South Korea's manageable rise in January 2023 inflation, which below the consensus, and wait and seeahead of the release of US employment data in Jan-2024. The Rupiah closed higher at IDR15,658/USD. We estimate the IHSG will move within the price range of 7,185-7,240. Today's Recommendations: ANTM, BBNI, ELSA, MDKA.
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