MNCS Morning Navigator

08 Februari 2023

MNCS Morning Navigator February 8, 2023

Global Market Highlights
DJIA rallied +0.78% on Tuesday (07/02), followed by the S&P500 (+1.29%) and the Nasdaq (+1.90%). Wall Street managed to rebound, supported by reduced negative sentiment regarding the Fed's hawkish stance following the release of solid labor market data. Today, the market will be looking toward several data releases such as: 1) US Wholesale Inventories MoM Dec; 2) US MBA 30-Year Mortgage Rate Feb 3; 3) US MBA Mortgage Applications Feb 3.

Domestic Update
• Bank Indonesia reported the position of foreign exchange reserves in Jan-2023 of USD139.4 billion. MNCS Comment: Foreign exchange reserves increased by USD2.2 billion (vs USD137.2 billion in Dec-2022) which was supported by the issuance of government global bonds as well as tax and service revenues. The position of foreign exchange reserves is equivalent to 6.1 months import/6.0 months import financing and government external debt payments.

Company News
1. KLBF IJ targets IDR33 trillion in revenue in FY23E, or grows 10-15% YoY (Market Bisnis). MNCS Comment: The company posted revenue of IDR21.2 trillion in 9M22, or realization reached 72-70% of the FY22 target of IDR29-30 trillion. We view that this target will be supported by the addition of the company's SKUs, especially through the development of biological-based products, which are still dominated by imported products. With a domestic sales contribution of up to 9M22 of 95%, as well as IDR1 trillion capex allocation support, it is expected that the company can achieve this target. Currentl,y KLBF is traded at the level of 31.26x/5.32x PER/PBV.
2. INCO IJ targets a capex allocation of USD110 million in FY23E (Emiten News). MNCS Comment: The capex allocation target in FY23E fell -8.3% YoY from FY22 in line with the 4th furnace project which has been completed and is ready to operate normally in FY23E. Therefore, it is hoped that through the normalization of the production process it can boost nickel in matte production (FY22: -8.1% YoY) with an estimated target of reaching 70k tonnes of nickel in matte in FY23E. Currently, INCO is traded at the level of 21.28x/2.06 PER/PBV.
3. SIDO IJ targets IDR 197 billion capex allocation in FY23E (Kontan). MNCS Comment: Capex allocation fell -6.2% YoY (vs IDR210 billion in FY22). Meanwhile, the purpose of the capex is still intended for greenhouse projects, adding production equipment and research and development equipment. Currently, SIDO is traded at the level of 24.67x/6.72x PER/PBV.

IHSG Updates
JCI strengthened +0.89% to 6,935.30 on Tuesday (07/02), followed by net foreign buy reaching IDR711.11 billion. The majority of sectors experienced strengthening and drove the index rate, led by the energy sector (+3.03%) followed by the industrial sector (+1.18%). On the other hand, sectors that experienced weakness were led by the infrastructure sector (-0.59%) followed by the property sector (-0.22%). We see investors responding positively to the position of foreign exchange reserves in Jan-2023 which rose to USD139.4 billion (vs USD137.2 billion in Dec-2022). On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,145/USD. We estimate that the JCI will move in the price range of 6,920-6,970 pending the release of Consumer Confidence Jan data. Today's recommendation: AGII, ANTM, BUMI, INDY.

Corporate Actions
IPO: VAST (IDR108/share), CHIP (IDR160/share), PACK (IDR162/share)

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