MNCS Morning Navigator

07 Februari 2023

MNCS Morning Navigator February 7, 2023

Global Market Highlights
DJIA fell -0.10% on Monday (06/02), followed by the S&P500 (-0.82%) and Nasdaq (-1.00%). Wall Street compactly continued to weaken in line with the continuing hawkish sentiment from The Fed, after the release of labor market data that exceeded market expectations, as well as investors who are watching issuer earnings releases. Today, the market will be looking toward several data releases such as: 1) US Balance of Trade Dec; 2) France Balance of Trade Dec; 3) Japan Leading Economic Index Prel Dec.

Domestic Update
Indonesia's GDP grew +5.01%/+5.31% YoY 4Q22/FY22, higher than the MNCS estimate of +4.96%/+5.29% YoY. MNCS Comment: We see economic growth driven by almost all expenditure items except government consumption (-4.77%/-4.51% YoY 4Q22/FY22). Going forward, we see external factors as a determinant of domestic economic growth with inflation trending to slow but higher than pre-pandemic and monetary policy tighter for longer which has the potential to hamper trade & investment flows.

Company News
1. PWON IJ recorded marketing sales in FY22 reaching IDR1.5 trillion (Market Bisnis). MNCS Comment: Realization of marketing sales in FY22 reached 83.3% of the target of IDR1.8 trillion, but managed to grow +4.6% YoY (vs IDR1.4 trillion in FY21). The high rise segment contributes 50% to marketing sales while the remaining 50% is from landed house projects. We anticipate the acquisition of marketing sales which tends to be flat by FY22 as the trend of rising benchmark interest rates pushes up mortgage rates. Currently, PWON is traded at the level of 14.01x/1.31x PER/PBV.
2. PTRO IJ diversified into the non-coal sector by facilitating the production of gold doe bullion at a project owned by PT Santana Rekso Nindhana (Kontan). MNCS Comment: We view positively the company's diversification efforts, especially in non-coal mining projects which are expected to boost the company's performance going forward. The value of the contract with PT Santasa Rekso Nindhana reached IDR 3.6 trillion (duration of 5 years). Currently, PTRO is traded at the level of 8.22x/1.17 PER/PBV.
3. SKRN IJ targets revenue growth of 10-20% YoY in FY23E (Kontan). MNCS Comment: The revenue growth target will be supported by carry over in FY23E as several projects have not been realized in FY22. This target is also supported by a capex allocation of IDR150-250 billion. Currently, SKRN is traded at the level of 31.70x/5.87x PER/PBV.

IHSG Updates
JCI weakened -0.55% to 6,873.79 on Monday (06/02), followed by net foreign buy reaching IDR728.46 billion. The majority of sectors experienced weakness and weighed on the index, led by the technology sector (-1.62%) followed by the property sector (-1.02%). On the other hand, sectors that experienced strengthening were led by the transportation sector (+0.42%) followed by the cyclical sector (+0.28%). The index's weakening was in line with some Asian markets and Wall Street. After the realization of 4Q22/FY22 GDP which was recorded as exceeding consensus, we see investors tend to wait and see ahead of the release of data on foreign exchange reserves for Jan-2023. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,055/USD. We estimate that the JCI will move in the price range of 6,860-6,900 pending the release of Foreign Exchange Reserves Jan data. Today's recommendation: ADRO, BBCA, BRPT, INDF.

Corporate Actions
IPO: IRSX (IDR101/share)

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