MNCS Morning Navigator

07 Februari 2024

MNCS Morning Navigator February 7, 2024

Global Market Highlights
The DJIA strengthened by +0.37% on Tuesday (06/02), followed by the S&P 500 (+0.23%) and the Nasdaq (+0.07%). Wall Street rebounded after several data reading met the market’s expectation. The US ISM Services PMI climbed from 50.5 in Dec-2023 to 53.4 in Jan-2024, beating the estimates of 52. The US ISM Non-manufacturing employment also increased from 43.8 points in Dec-2023 to 50.5 points in Jan-2024. Additionally, the decision from The Fed to keep the FFR unchanged at level 5.25%-5.5% is align with the investors’ conjecture. Today the market will be looking forward to several data releases such as: 1) US balance of trade Dec-2023; 2) FR Balance of Trade Dec-2023; 3) JP Foreign Exchange Reserves Jan-2024.

Domestic Update
S&P Global reported Indonesia's Purchasing Managers’ Index (PMI) to have advanced higher to 52,9 in Jan-2024 from 52,2 in Dec-2023. MNCS Comment: Indonesia’s PMI has maintained its expansive stance for the 29th time in a row, far exceeding regional peers such as Malaysia (49,0), Philippines (50,9), Vietnam (50,3) Thailand (46,7) and China (50,8). We view that this reflects a resilient strength in the nation’s manufacturing industry and the unwavering optimism of the industry participants, despite the typical political year pullback and the high interest rate hurdle. It is likely the industry players perceive accommodative and pro-business policies from the candidacy.

Company News
1. NELY IJ aims for a revenue growth of +15% YoY in FY24E, an increase from the FY23E target of IDR500 billion (Kontan). MNCS Comment: We note that the company's performance during 9M23 grew solidly, with revenue reaching IDR 387.47 billion (+89.51% YoY) and net profit of IDR 117.99 billion (+135.65% YoY) supported by the addition of 5 tug boats and 5 barges. The company's performance is still able to grow this year through higher coal (710 million tons) and nickel production target by the government in FY24E as well as the addition of a fleet of 2 tugboats and 2 barges (via allocated capex of IDR 200 billion). NELY is currently trading at 4.93x/1.64x PER/PBV.
2. PTRO IJ targets coal production to reach 1.2 million tons in FY24E (Market Bisnis). MNCS Comment: We see positively the company's efforts to diversify its business, which can strengthen revenue streams, in addition to its business footprint as a mining contractor. We anticipate improved performance ahead with the additional income from coal production. The coal mine has a total resource of 69.5 million tons and reserves of 49.8 million tons. PTRO is currently trading at 16.68x/1.54x PER/PBV.
3. DMAS IJ aims for IDR1.81 tn of marketing sales in FY24 (Emiten News). MNCS Comment: While management sets moderate target upon the sales drop -21.70% YoY in 9M23, we view the potential of increasing demand for land can support to fulfill this target. There are several industries that drive this demand, such as data centers, automotive, chemical industry, residential and commercial sector. Management also takes the 90 ha of land demand in their pipeline into consideration when setting the FY24’s target. DMAS is currently trading at level 12.76x/1.33x PER/PBV.

IHSG Updates
The JCI strengthened by +0.68% to 7,247.41 on Tuesday (06/02), followed by a net foreign buy of IDR764.81 billion. Almost all sectors experienced gains and drove the index, led by the property sector (+1.02%), followed by the infrastructure sector (+1.01%). Meanwhile, sectors experiencing declines were led by the technology sector (-1.13%), followed by the transportation and logistics sector (-0.48%). The index successfully rebounded amid a mixed Asian market, as investors optimistic ahead of the expected solid release of foreign exchange reserve data for Jan-2024. The Rupiah closed lower at IDR15,730/USD. We estimate the IHSG will move within the price range of 7,200-7,250. Today's Recommendations: BFIN, BRMS, ITMG, TLKM.

Corporate Actions
IPO: ALII (IDR272/share), UNTD (IDR240/share), TOSK (IDR125/share)

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